Published: Monday, 27 Jul 2009 | 4:54 AM ET

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Citigroup said on Sunday some 99 percent of its stock was tendered in an exchange offer for publicly held securities, in a key step toward giving the U.S. government a 34 percent equity stake in the bank.

Citigroup said preliminary results showed about $20.3 billion worth of publicly held convertible and nonconvertible preferred and trust preferred securities were tendered in the exchange offer.

The bank will issue 5.83 billion common shares to the public exchange offer participants, it said. The exchange offer expired at 5 pm New York time on Friday.

The New York-based lender has been conducting a series of exchange offers on $58 billion of securities, as part of a federal bailout designed to bolster the bank's capital.

Public and private investors are exchanging up to $33 billion of securities for common stock, while the government is exchanging up to $25 billion of its own securities.

Citigroup is conducting the exchange offers after heavy losses led to a series of federal bailouts, including $45 billion of taxpayer money, for the third-largest U.S. bank.

The bank is the most troubled of the nation's largest lenders, after credit losses and writedowns led to $37.5 billion of net losses in the 15 months ended in December.

Last week, Citigroup

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[C  Loading...      ()   ] said private holders of $12.5 billion of convertible preferred securities agreed to swap them for securities expected to convert to common stock.

The government matched that by swapping $12.5 billion of its own nonconvertible preferred shares for the securities

The bank said on Sunday it expects to swap another $12.5 billion of its preferred stock with the government after the latest exchange offer.

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