The Wall Street Journal, 23 Feb 2009, COSTAS PARIS and NISHA GOPALAN
SINGAPORE -- Talks over a bigger U.S. government stake in Citigroup Inc. could put Singapore's sovereign wealth fund in the difficult position of having to decide whether to convert its beaten-down Citi stake into common stock and wind up owning more of the troubled bank than it might want.
For Singapore's GIC, which earns an annual coupon of 7% on its preferred stock, converting its holding into common stock doesn't remove the risk of being diluted or wiped out if Citigroup needs another capital injection or is nationalized by the U.S. government.
GIC has no current plans to convert the preferred shares it owns in Citigroup Inc. into common stock, two people familiar with the situation said Monday.
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