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Monday, April 21, 2008

More Dilution for Financial Shareholders

by Calculated Risk on 4/21/2008 06:16:00 PM

From Reuters: Citigroup launches $6 billion preferred share sale: IFR

Citigroup on Monday will sell $6 billion in non-cumulative perpetual preferred shares, said International Financing Review, a Thomson Reuters publication.

The shares are expected to pay a fixed 8.4 percent dividend for 10 years and pay a floating rate after that.
And from the WSJ on CIT Group (a commercial finance company): CIT Plans $1 Billion Stock Offering
CIT Group Inc. said it plans to offer $1 billion in common and convertible preferred shares, in a move that will seriously dilute current shareholders' holdings.
To the shareholders: the good news is your companies might survive, the bad news is you don't own as much of the company as before. But something is better than nothing.