September 25, 2008 / 10:12 PM / 9 years ago

Citi may sell $79 billion in bailout plan: Fox Pitt

(Reuters) - Fox-Pitt said about $79.4 billion of Citigroup’s (C.N) troubled assets may be eligible for sale under the government’s proposed bail out plan, adding the company need not raise capital to remain “well-capitalized.”

Analyst David Trone noted Citi may however raise capital just to appease market concerns about its risk and soundness.

The brokerage estimates that of the $79.4 billion worth assets, $22.4 billion will be in sub-prime and $21.5 billion in residential loans.

The analyst said Citi may have to take a pre-tax charge of $21 billion if assets were to be transferred to Troubled Assets Relief Program (TARP) at market prices.

“However, if assets are transferred at near held-to-maturity price levels, this charge could be significantly lower or possibly, result in a gain,” Fox-Pitt said in a note to clients.

In a pessimistic scenario, the brokerage estimates asset valuations at 10 percent below its clear the market prices resulting in a $27.0 billion pre-tax charge.

Fox-Pitt’s rating and price target on Citigroup remained unchanged, it said.

Reporting by Santosh Nadgir in Bangalore; Editing by Dinesh Nair

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