Citi Increases Debt Reduction Plan

Citigroup Inc. (NYSE: C) is increasing its debt repurchases. The banking giant said that it is upsizing the principal amount of the notes to be accepted for purchase under cash tender offers by Citigroup and its Associates First Capital Corporation subsidiary.

The bump higher will allow it to be raised from $675 million up to $1.65 billion. Citi said that the increase reflects its continued robust liquidity position and that this is consistent with its recent liability management initiatives.

Citi also noted that so far in 2012 it has decreased its outstanding long-term debt by about $11.9 billion, if you include prior trust preferred redemptions and prior debt tender offers. What is more important is that Citi said it plans to consider additional opportunities to repurchase long-term debt and short-term debt based on several factors.

The aim here is rather simple … lower net borrowing costs and a higher net interest margin. Citi shares are up 1.4% at $29.76 so far this morning and the 52-week trading range has been $21.40 to $38.40.

JON C. OGG