Reply #22: Citigroup's Stock Slips on SIV Plan

[ozymandius]

Citigroup's Shares Slip After Bank Unveils Plans to Assume Control of SIVs

NEW YORK (AP) -- Citigroup Inc.'s stock slipped almost 2 percent Friday after the bank said it plans to assume control of the seven "structured investment vehicles" it advises to help them repay lenders.

The world's biggest bank late Thursday said it will incorporate seven SIVs with $49 billion in assets onto the company's balance sheet. Some analysts said committing to helping these funds could imperil the bank's already-stretched finances.

Moody's Investors Service, the credit-rating agency, slashed Citigroup's debt and financial strength ratings on Thursday, saying the bank's cash cushion is diminishing just as its profit weakens.

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CIBC World Markets analyst Meredith Whitney wrote in a client note the SIVs on Citigroup's balance sheet is likely to force Citigroup to raise more cash by selling $100 billion of its assets and cutting its dividend.

http://biz.yahoo.com/ap/071214/citigroup.html