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Tuesday, April 08, 2008

Citi Faces Huge Write-Downs, Nears Sale of Leveraged Loans

by Calculated Risk on 4/08/2008 08:08:00 PM

From Financial Week: Citi may write down another $17 billion for Q1, research firm says

CreditSights estimated that Citigroup will likely report the biggest write-downs for Q1. The write-downs could range from $15.2 billion to $16.8 billion, CreditSights reckons, depending on whether valuation reserves related to financial guarantors are included in the tally....

CreditSights estimates that write-downs at Bank of America could range from $8.8 billion to $9.9 billion. At J.P. Morgan, the hit could be around $7.5 billion.
And from the WSJ: Citi Nears Sale of Leveraged Loans
Citigroup Inc. ... is close to a deal to unload about $12 billion of leveraged loans and bonds to a group of private-equity firms ...

Citigroup originally issued the debt to help finance the leveraged-buyout boom.
Under the planned deal, Citigroup will sell the loans and bonds to buyout firms including Apollo Management, TPG and Blackstone Group, said the people briefed on the deal. The firms are expected to pay an average price of slightly less than 90 cents on the dollar.
Just more good news.