(Adds details, background, shares)
April 7 Citigroup Inc said it would pay
$1.12 billion in cash to settle legacy securities and other
claims and incur a related charge of $100 million in the first
The bank reached the agreement with 18 institutional
investors and said the settlement had resolved a significant
issue left over from the financial crisis..
Citi has offered the settlement to the 68 Citi-sponsored
mortgage securitization trusts that participated in the $59.4
billion residential mortgage-backed securities.
Separately, the institutional investors have asked the
trusts to accept the offer, which they have till June 30 to
Established by Citi's legacy securities and banking business
during 2005-2008, these residential mortgage-backed security
trusts were represented and warranted by Citi affiliates.
The settlement, the latest among a series of similar deals
in the recent past, comes as the U.S. banking industry tries to
manage its way out of the housing bubble that led to the
Last year, a federal judge approved a settlement in which
Citi agreed to pay bondholders $730 million to resolve claims
that the bank concealed its exposure to billions of dollars of
toxic mortgage assets prior to the financial crisis.
Citigroup stock closed down about 1.2 percent at $46.55 on
the New York Stock Exchange on Monday.
(Reporting by Avik Das and Shubhankar Chakravorty in Bangalore;
Editing by Ken Wills)