Sep 29 2008
Citigroup Buying Wachovia Banking Assets
For the last several days, Citigroup and Wells Fargo had been engaged in a bidding war for Wachovia’s Banking Assets. It looks like Citigroup won out in a deal orchestrated by the FDIC.
Wachovia didn’t fail.
FDIC will share Wachovia loan losses with Citi. Citi will absorb up to $42B with the Fed absorbing any amount over.
Wachovia will keep A.G. Edwards and Evergreen Operations.
Citi will absorb Wachovia’s Senior Subordinated Debt.
The banking crisis is spreading globally, with news of large bailouts announced in England and Iceland this morning.
A Congressional vote on the ”Emergency Economic Stabilization Act” is scheduled for today around noon.
The Dow is set to open sharply down, within the triple digit range and Congress is set to vote on the rescue plan. No one knows yet whether the bill will pass or whether it will be effective in the short or long term.
Ken
