Citadel Ups Stake In E*Trade, Agrees To Debt Swap

Jun 19 2009 | 1:04pm ET

Citadel Investment Group has bought nearly $100 million in new E*Trade Financial Shares, bringing its stake in the troubled brokerage firm to 17%.

Chicago-based Citadel, which was already the largest shareholder—and creditor—of E*Trade, had committed to buying between $50 million and $100 million of the new shares. It already owned a 16% stake in the firm. E*Trade sold 435 million shares of common stock this week as part of its bid to shore up its financial position.

Federal regulators in April ordered E*Trade, whose banking unit has been battered by the mortgage crisis, to raise more capital and cut its debt. To the latter’s end, the firm also plans a bond exchange program, beginning next week, swapping at least $1 billion in new, zero-coupon convertible bonds for bonds due in 2011 and 2017. Citadel, which owns more than 70% of E*Trade’s outstanding high-yield debt, plans to exchange at least $800 million of its bond holdings, as well.

Last week, Citadel chief Kenneth Griffin joined E*Trade’s board of directors.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...