USG share will be allocated as follows:
- Institution absorbs all losses in portfolio up to $29 bn (in addition to existing reserves)
- Any losses in portfolio in excess of that amount are shared USG (90%) and institution (10%).
- UST (via TARP) second loss up to $5 bn;
- FDIC takes the third loss up to $10 bn;
In return, US Taxpayers receive:
Institution will issue $7 bn of preferred stock with an 8% dividend rate (under terms described below). $4 bn of preferred will be issued to UST. $3 bn will be issued to the FDIC.Citi shareholders, in return for not getting wiped out, will see their dividend all, but wiped out:
Institution is prohibited from paying common stock dividends, in excess of $.01 per share per quarter, for 3 years without UST/FDIC/FRB consent.And customer's are already hearing "good news" from Citi in a mass email sent just this morning (hat tip Dom):
Good news! Citibank is participating in the FDIC's Temporary Liquidity Guarantee Program. Through December 31, 2009, all of your non-interest and interest bearing checking deposit account balances are fully guaranteed by the FDIC for the entire amount in your account.