Citigroup Bailout

- Citigroup is one of the world's largest banksAl Jazeera English: Us Unveils $20bn Citigroup Aid Plan (November 24, 2008)
- Federal government will invest $45 billion into Citigroup Inc.
- Deal announced just before midnight on Sunday, November 23, 2008NY Daily News: Taxpayers to Rescue in $20 Billion Citigroup Bailout (November 24, 2008)
- Joint announcement made by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp.NY Daily News: Taxpayers to Rescue in $20 Billion Citigroup Bailout (November 24, 2008)
- The November 2008 bailout is the second time Citigroup has received cash from the Treasury DepartmentLos Angeles Times: U.s. Rescues Giant Citigroup (November 24, 2008)
- The cash will come from the Treasury Department via the $700 billion bailout package
- Will guarantee over $300 billion worth of toxic mortgagesSFGate: Feds OK plan to rescue Citigroup (November 24, 2008)
- Largest rescue effort in the current financial crisis
- As a part of the deal, Citigroup agreed to accept limits on compensation and severance packages for executivesNY Daily News: Taxpayers to Rescue in $20 Billion Citigroup Bailout (November 24, 2008)
- On November 17, 2008, Citigroup announced the layoffs of about 50,000 employeesAl Jazeera English: Us Unveils $20bn Citigroup Aid Plan (November 24, 2008)
- Shares of Citibank fell 87% in 2008SFGate: Feds OK plan to rescue Citigroup (November 24, 2008)

The federal government invested $45 billion in Citigroup late in 2008 in an attempt to stabilize the company and avoid a collapse of one of the largest banks in the world. In return for its investment, the U.S. Treasury received preferred stock in the company.
On February 27, 2009, Citigroup announced a plan to convert preferred shares to common stock. The U.S. Treasury has agreed to participate by matching the amount converted by private investors, up to $25 billion. If the full $25 billion is converted, the U.S. government will own 40% of the company. This is a stock for stock deal; no additional cash will be invested as part of the transaction.The Washington Post: U.S. Plans Bigger Stake in Citigroup (February 27, 2009)
Common Stock

Common stockholders have an ownership interest in a company, and may receive dividends at the discretion of the company's board of directors. Common stockholders are the last ones paid back in the case of liquidation. Investopedia: Common Stock
Debt Financing

Investors who have provided loans (debt financing) to a company have no ownership interest and no voting rights. They receive interest payments and are the investors with the highest claim on the company's assets in case of liquidation.
Preferred Stock

Preferred stock shares features of both debt and common stock. Preferred shareholders have an ownership interest (like common stock), but generally have no voting rights. They receive guaranteed payments (like debt) in the form of dividends. In the case of liquidation, preferred stock comes after debt, but before common stock, when assets are distributed.Investopedia: Preferred Stock