Well-respected banking analyst, Meredith Whitney of Oppenheimer & Co., predicts that Citigroup may be facing additional writedowns of $13.1 billion on collateralized debt obligations and leveraged loans. In addition, Ms. Whitney now anticipates that Citigroup will lose $.15/share during 2008.
Previously, Citigroup had written down approximately $18 billion on its subprime securities investments and was forced to cut its dividends. As a result, the company has been in a serious cost cutting mode, eliminating 4,200 jobs with plans for additional cuts. Previous estimates have suggested that thousands of additional Citigroup employees are at risk of losing their jobs.
Much uncertainty continues to plague Citigroup as a result of the lack of transparency regarding its overall loss exposure. For example, Citigroup disclosed at the end of last year that off-the-balance sheet entities connected to it had $356 billion in assets and that it reportedly has maximum potential loss exposure of $152 billion associated with those assets. Similarly, Citigroup, in its annual report, disclosed that its trading arm was holding approximately $20 billion of hard-to-value securities that are tied to the commercial real estate market which is beginning to experience problems. These and similar disclosures make it hard to get a grip on Citigroup’s real position.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing individual and institutional investors regarding their subprime problems. For further information, please contact us.