Treasury continues to unwind its stake in Citigroup

The Treasury Department plans to sell trust-preferred securities in Citigroup as it moves ahead with an effort to extricate itself from the banking giant. The government obtained the securities when it entered an agreement to share in losses on some Citi assets. The Treasury did not say how much of its $2.2 billion in securities it will sell or at what price.

By July, the Treasury said it had sold 2.6 billion of the 7.7 billion common shares it owned, in incremental sales usually amounting up to 10% of daily trading volume. But its hope of ridding itself of all its Citi common stock by the end of the year appears to be fading. Trading volume in Citi's stock has been lower over the summer than in the spring, reducing the amount the Treasury can sell without affecting Citi's stock price.

Unless the daily volume of Citi stock jumps considerably, it is unlikely that the Treasury will complete the sale of all its common stock this year, unless it changes course and conducts a block sale of shares.

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