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August 12, 2009

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Citigroup approves US$6b in new loan initiatives

CITIGROUP Inc said yesterday it approved US$6 billion in new lending initiatives during the second quarter as part of its programs supported by government bailout funds.

The New York-based bank said it has now approved US$50.8 billion in lending programs tied to receiving money as part of the Troubled Asset Relief Program. The program was launched last fall by the Treasury Department to help stabilize the lending markets at the peak of the credit crisis.

Citigroup has received US$45 billion in TARP money since last October. A portion of that money was recently converted into a 34 percent ownership stake for the government.

Among the money approved for lending, US$15.1 billion has been deployed, the banking giant said in its third quarterly update on how it is expanding lending efforts after receiving government money.

Two new programs, worth up to US$6 billion, were approved by Citigroup in the second quarter. It will provide up to US$4 billion in municipal letters of credit and another US$2 billion for mortgage originators.

The lending initiative for municipalities builds on a US$5 billion program Citigroup approved in the first quarter that provides loans to municipal clients to directly fund capital projects, such as building new infrastructure.

The letters of credit will be available to local governments, municipal agencies, health care groups and other public finance clients for up to three years.

The US$2 billion for mortgage originators will be available as loans known as warehouse lines of credit.


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