NEW YORK -
Citigroup Inc. plans to assume control of the seven "structured investment vehicles" the bank advises to help them repay their debts.
Citigroup will provide a "support facility" for its seven SIVs with investments totaling $49 billion and incorporate them onto its balance sheet, the bank said Thursday. The bank previously said it had no plans to bring the SIVs onto its books.
SIVs are complex investment funds established by banks like Citigroup and sold to investors. SIVs borrow money by selling short-term debt like term notes and commercial paper, then using the borrowed money to buy bank, mortgage and credit card debt that yield higher returns.
The funds profit off management fees and the spread between how much they collect on the investments and how much it costs them to borrow.
Citigroup Inc. plans to assume control of the seven "structured investment vehicles" the bank advises to help them repay their debts.
Citigroup will provide a "support facility" for its seven SIVs with investments totaling $49 billion and incorporate them onto its balance sheet, the bank said Thursday. The bank previously said it had no plans to bring the SIVs onto its books.
SIVs are complex investment funds established by banks like Citigroup and sold to investors. SIVs borrow money by selling short-term debt like term notes and commercial paper, then using the borrowed money to buy bank, mortgage and credit card debt that yield higher returns.
The funds profit off management fees and the spread between how much they collect on the investments and how much it costs them to borrow.
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The bank said it expects its SIVs to be able to meet their liquidity needs, which total $35 billion, through the end of next year. Citigroup expects to provide "little or no" financing.
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