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C » Topics » Asset-Based Financing-Citi Holdings

This excerpt taken from the C 10-Q filed Nov 6, 2009.

Asset-Based Financing—Citi Holdings

        The Company provides loans and other forms of financing to VIEs that hold assets. Those loans are subject to the same credit approvals as all other loans originated or purchased by the Company. Financings in the form of debt securities or derivatives are, in most circumstances, reported in Trading account assets and accounted for at fair value through earnings.

        The primary types of Citi Holdings' asset-based financing, total assets of the unconsolidated VIEs with significant involvement and the Company's maximum exposure to loss at September 30, 2009 are shown below. For the Company to realize that maximum loss, the VIE (borrower) would have to default with no recovery from the assets held by the VIE.

In billions of dollars
Type 		  Total
assets 		  Maximum
exposure 		 

Commercial and other real estate

   $ 36.9   $ 7.0  

Hedge funds and equities

     2.2     0.8  

Corporate loans

     7.9     6.7  

Airplanes, ships and other assets

     6.0     3.4  
           

Total

   $ 53.0   $ 17.9  
           

        The following table summarizes selected cash flow information related to asset-based financing for the three months ended September 30, 2009 and 2008:

 
   Three months ended
September 30, 		 
In billions of dollars   2009   2008  

Cash flows received on retained interests and other net cash flows

   $ 0.4   $ —  
           

 

 
   Nine months ended
September 30, 		 
In billions of dollars   2009   2008  

Cash flows received on retained interests and other net cash flows

   $ 2.4   $ —  
           

        The effect of two negative changes in discount rates used to determine the fair value of retained interests is disclosed below.

In millions of dollars   Asset based financing  

Carrying value of retained interests

  $ 6,882  

Value of underlying portfolio

        
 

Adverse change of 10%

   $ —  
 

Adverse change of 20%

     (436 )
       

146

Table of Contents

This excerpt taken from the C 10-Q filed Aug 7, 2009.

Asset-Based Financing—Citi Holdings

        The Company provides loans and other forms of financing to VIEs that hold assets. Those loans are subject to the same credit approvals as all other loans originated or purchased by the Company. Financings in the form of debt securities or derivatives are, in most circumstances, reported in Trading account assets and accounted for at fair value through earnings.

        The primary types of Citi Holdings' asset-based financing, total assets of the unconsolidated VIEs with significant involvement and the Company's maximum exposure to loss at June 30, 2009 are shown below. For the Company to realize that maximum loss, the VIE (borrower) would have to default with no recovery from the assets held by the VIE.

In billions of dollars
Type 		  Total
assets 		  Maximum
exposure 		 
Commercial and other real estate   $ 45.4   $ 8.9  
Hedge funds and equities     3.2     1.8  
Corporate loans     7.8     6.6  
Airplanes, ships and other assets     2.1     1.5  
           
Total   $ 58.5   $ 18.8  
           

131

Table of Contents

        The following table summarizes selected cash flow information related to asset-based financing for the three months ended June 30, 2009 and 2008:

 
   Three months ended June 30,  
In billions of dollars   2009   2008  
Cash flows received on retained interests and other net cash flows   $ 0.1   $ —  
           

 

 
   Six months ended June 30,  
In billions of dollars   2009   2008  
Cash flows received on retained interests and other net cash flows   $ 2.0   $ —  
           

        The effect of two negative changes in discount rates used to determine the fair value of retained interests is disclosed below.

In millions of dollars   Asset based financing  

Carrying value of retained interests

   $ 6,297  

Value of underlying portfolio

        
 

Adverse change of 10%

   $ (584 )
 

Adverse change of 20%

     (1,215 )
       

EXCERPTS ON THIS PAGE:

10-Q
Nov 6, 2009
10-Q
Aug 7, 2009

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