CITI Selling $12 Bil in LBO Debt – BAD NEWS

Posted on April 8th, 2008 in Daily Stock Market / Economic News - The Real Story

7:30pm PST…THE PUMPERS ARE OUT!!! 90 cents on the dollar my butt – The NY Times just reported it is more like 83-87 cents. This is NOT GOOD AT ALL.

2:30pm PST – News just broke on Fast Money and of course they immediately suggested it was ‘mortgage’ debt, which means ‘write-ups’ will happen because mortgage debt has been written down to nothing. TOTALLY IRRESPONSIBLE! Below is the real news.  – Mr Mortgage

"The Citi
portfolio includes loans used to finance acquisitions by Apollo, Blackstone and
, as well as debt in their rivals’ deals. Apollo would buy about
half the portfolio, with Blackstone and TPG taking the rest. Citi declined

ITS LBO DEBT! Similar debt on others books MUST BE WRITTEN DOWN now. That means everyone that has similar debt. Is this CITI all it has to sell? Is this CITI’s most valuable paper?

Facts are, CITI thought they would get 103-108 for it and it is likely on their books for 100. The only reason CITI would do this is because they need to raise tier capital now and it may be all they have they can sell. They are low on capital like everyone else. It was sure amusing to see the
sheeple jam the market higher on this as the news broke. Now futures are bright red in a 65 point reversal from the highs. How will
bubblevision spin this into something great tomorrow.

The only ones who made out was the LBO firm who are BUYING BACK THEIR OWN DEBT. What a deal.

IMPORTANT NOTE – There is still a
LEH story out there. It is the only financial not screaming higher on this. Made
back 50% of its AH fall but stil down 2%. – Mr Mortgage

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