In an echo of recent news for Washington Mutual, Citigroup just received $12 Billion cash from a sale of loan assets. Sort of.
It sounds like a mortage backed security what they did, except this wasn't for subprime mortgages. It was a rather messy sale: loans were sold at 90 cents on the dollar, then Citigroup agreed to accept the first 20% of loses, should there be loses, AND Citigroup helped to finance the deal. That does not sound like a strong bargaining position. Nor is this the rabid securitized debt market of years past. On the other hand, $12 billion is a lot of money for what may be toxic waste.
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