Treasury to auction Citigroup warrants

WASHINGTON - The government says it will sell 465.1 million warrants it holds from Citigroup Inc. in an auction Tuesday. It is the latest effort to recoup costs from the $700-billion financial bailout.

Sale of the warrants gives the holder the right to buy Citigroup common stock at a fixed price. The sales will add to the $12-billion profit the Treasury says the government has realized from its $45-billion rescue of Citigroup. The Treasury released that estimate last month when it completed sales of Citigroup common stock the government held.

The Citigroup warrants were divided into two groups reflecting the different types of bailout support the government supplied to the giant bank in the financial crisis.

For 255 million warrants classified as "A warrants" the minimum bid price will be 60 cents. The second group of "B warrants" will have a minimum bid price of 15 cents.

For the A warrants, the fixed purchase price is $10.61, and for the B warrants, the fixed purchase price is $17.85.

Both of those prices are significantly higher than where Citigroup stock has been trading. Over the past year shares have traded in a range of $3.11 to $5.15. Citi shares closed at $4.86 Monday. - AP