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Citi debt protection costs almost halve: CMA
LONDON |
LONDON (Reuters) - The cost of protecting Citigroup Inc's debt with credit default swaps almost halved on Monday after the bank was rescued by the U.S. government.
Five-year CDS on Citigroup tightened by around 230 basis points 257.5 basis points, or $257,500 a year to protect $10 million of debt, according to data from CMA DataVision.
Under the deal the U.S. government will shoulder most of Citi's potential losses on $306 billion of high-risk assets, inject $20 billion of new capital on top of $25 billion it just put into the bank, and receive preferred shares with an 8 percent dividend.
(Reporting by Natalie Harrison)
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