Citigroup, the multinational financial services corporation, has recently announced its plans to redeem $1.5 billion worth of Series K Preferred Stock. The redemption is part of Citigroup’s liability management strategy aimed at enhancing its funding and capital structure.
The redemption date for the 6.875% Fixed Rate/Floating Rate Noncumulative Preferred Stock, Series K is scheduled for November 15, 2023. The cash redemption price for the stock is set at $25, and any quarterly dividend declared but not paid prior to the redemption date will be paid on or before that date.
This decision by Citigroup reflects various considerations, including economic value, regulatory changes, potential impact on net interest margin and borrowing costs, overall tenor of the debt portfolio, capital impact, and market conditions. The bank stated that the redemption is part of its efforts to optimize funding and capital structure.
Once the redemption date arrives, the depositary shares representing the redeemed preferred stock will cease to be outstanding, and dividends will no longer accrue on these securities. Computershare Trust Company, N.A. has been appointed as the paying agent for the depositary shares.
This move by Citigroup aligns with its broader strategy of fine-tuning its financial operations and streamline its capital structure. By redeeming its Series K Preferred Stock, Citigroup aims to improve its financial flexibility and efficiency.
This news highlights Citigroup’s ongoing commitment to optimize its funding and capital structure to drive sustainable growth and maintain a competitive edge in the dynamic global financial market.
