Citigroup, Merrill Seek More Foreign Capital

Discussion in 'Wall St. News' started by ASusilovic, Jan 10, 2008.

  1. Two of the biggest names on Wall Street are going hat in hand, again, to foreign investors.

    Citigroup Inc. and Merrill Lynch & Co., two companies that just named new chief executives after being burned by the troubles in the U.S. housing market, recently raised billions of dollars from outside investors. Now, they are in discussions to get additional infusions of capital from investors, primarily foreign governments.

    Merrill is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund. Citi could get as much as $10 billion, likely all from foreign governments.

    Such large investments would be the latest sign big banks are undergoing a rapid recapitalization to stabilize their shaky financial foundations. Already, foreign governments have invested about $27 billion in Merrill, Citi, UBS AG and Morgan Stanley.

    The new investments are sure to complicate the so-far successful efforts of Wall Street firms to keep these purchases below the Washington radar screen. Multiple investments from government funds will get closer scrutiny from regulators for signs the funds could work together and exercise control. Any questions will lengthen the time regulators need to review the deals. And federal lawmakers, who've given the string of government investments a pass, will take another look in this election year.

    "The goal is to get a [page] B6 story in the Wall Street Journal and have no one mention it," said a Washington lobbyist who has shepherded a number of foreign-government investments in Wall Street through Congress.

    We shall rename Wall Street into "Sovereign Wealth Fund" Street....:D :D :D