Citigroup Inc. (C) Sells Off More Assets
Citigroup Inc. has sold off 20 percent of the assets in its structured investment vehicles in the last two months, the bank said Friday.
Assets in the SIVs declined to $66 billion as of Nov. 30 from $83 billion as of Sept. 30, Citigroup confirmed after a report from Moody's Investors Services detailed the falling asset values of several SIVs.
SIVs are complex funds selling short-term debt, like unsecured commercial paper, to investors such as hedge funds. The SIVs then use the proceeds to buy longer-term assets, like mortgage-backed securities, that yield higher returns.
The vehicles normally generate money through fees and the difference between short-term and long-term rates. But demand for short-term assets has dried up due to plummeting home prices, and that has led to liquidity problems for SIVs.
Assets in the SIVs declined to $66 billion as of Nov. 30 from $83 billion as of Sept. 30, Citigroup confirmed after a report from Moody's Investors Services detailed the falling asset values of several SIVs.
SIVs are complex funds selling short-term debt, like unsecured commercial paper, to investors such as hedge funds. The SIVs then use the proceeds to buy longer-term assets, like mortgage-backed securities, that yield higher returns.
The vehicles normally generate money through fees and the difference between short-term and long-term rates. But demand for short-term assets has dried up due to plummeting home prices, and that has led to liquidity problems for SIVs.
Labels: C, Citigroup Inc.
posted by Stock Administrator @ 1:29 PM
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