Citigroup to sell $3 billion of shares

Citigroup Inc. said Tuesday that it planned to sell $3 billion of common stock to bolster its capital levels, sending its shares down in after-hours trading.

The largest U.S. bank is raising capital after suffering a $15-billion net loss over the last two quarters and reporting more than $45 billion in write-downs and credit losses since June 30.

Chief Financial Officer Gary Crittenden said Citigroup had received “strong� interest in the public offering. The company said the issue might grow in size.

Since late last year, Citigroup has raised more than $36 billion, including last week’s sale of $6 billion of preferred stock. The bank also is selling assets, such as a $12-billion leveraged loan portfolio sold this month to private investors.

Analysts said selling shares made sense after Citigroup stock rose 46% from the low of $18 on March 17, a level not seen since October 1998, on optimism that the worst of the write-downs has passed. The offering is the first in Citigroup’s recent capital-raising to involve common stock.

“Obviously it’s dilutive, but it’s smarter than going out and having to pay a high premium for a preferred issuance,� said William Smith, chief executive of Smith Asset Management.

Citigroup plans to sell the stock today, people briefed on the matter said.

Shares of Citigroup fell 80 cents, or 3%, to $25.52 in after-hours electronic trading. They had fallen 49 cents during regular trading to close at $26.32.

Other U.S. banks to raise capital this month include Bank of America Corp., Wachovia Corp., Washington Mutual Inc. and National City Corp.