Washington — Wachovia Insurance Services, previously the insurance brokerage arm of Charlotte, N.C.-based bank holding company Wachovia Corp., will become a stand-alone operation after the absorption of the company's banking assets by Citigroup Inc., New York, a company spokeswoman confirmed.
The news comes following a deal facilitated by the Federal Deposit Insurance Corp. (FDIC) for Citigroup to take control of Wachovia's five depository institutions, paying $2.16 billion in stock and assuming roughly $53 billion of Wachovia's senior and subordinated debt. The deal includes a loss-sharing agreement with the FDIC in which Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans, and the FDIC absorbing any losses beyond that.
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