For all of the angst over the bailout of big American financial institutions, several can claim they haven't cost taxpayers a dime. The Treasury has announced that, via Morgan Stanley, it will sell its remaining 2.4 billion shares in Citigroup, which it bailed out to the tune of $45 billion in 2008.

The bank repaid $20 billion of the money in December 2009. The other $25 billion was converted into 7.7 billion Citi shares via exchange offers in July 2009. Since then, Treasury has sold 5.3 billion shares. The remaining 2.4 billion shares were worth $10.7 billion at the market price.

It's likely that the sale of the 5.3 billion shares previously sold plus dividends fetched enough to ensure the government turns a profit on the bailout. One professor estimates the government will make about $9.4 billion, according to Deal Journal. Those profits could be goosed by warrants Treasury would continue to hold for Citigroup common stock that were also issued as part of Citi's participation in Treasury bailouts.

Treasury is also entitled to receive up to $800 million in TruPS® held by the FDIC. The FDIC is required to turn these securities over to Treasury unless it incurs any losses on debt of Citigroup guaranteed by the FDIC under the Temporary Liquidity Guarantee Program.

So, all in all, this can be seen as a success story for Treasury, which isn't to say the experience was pleasant. The fact is Citigroup remains too big to fail, as do several other institutions.

For more:
- here's a Portfolio.com article

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