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Thursday, November 05, 2009

Citi to Hold IPO for Primerica

By Kathryn Glass

FOXBusiness

Banking behemoth Citigroup (C) announced Thursday it filed regulatory documentation to hold an initial public offering for Primerica Inc., its life-insurance business.

The spin-off represents another move designed to down-size the too-big-to-fail bank.

“Today's announcement represents an important step in simplifying our organization and demonstrates our continued success in finding solutions for Citi Holdings, our non-core businesses,” said Michael Corbat, Chief Executive Officer of Citi Holdings, in a statement. “We believe this is the best separation alternative for this franchise.”

Citi will divest the remaining interest in Primerica after the offering is completed, and the bank will receive all proceeds from the offering, according to the statement.

Citi said in the release that it would still receive a stream of income that is “significant” from Primerica, as it will continue to cover term life insurance policies in place as of Dec. 31, through reinsurance arrangements.

Shares of Citi rose 9 cents or 2.27%, to close at $4.06 per share in Thursday’s session, before falling 5 cents in trading after hours.

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