Citi said that the warrants associated with purchasing shares of Citi common stock issued on July 23 to the U.S. government and certain private holders have become "null and void."
The upcoming completion of the exchange "marks the end of a lengthy, complex process and effectively puts [Citi] in a solid capital position," writes Bank of America Merrill Lynch analyst Guy Moszkowski in a note. It provides Citi "with ample room to absorb future losses, even in our worst-case scenario."
While third-quarter earnings results "will include plenty [of] conversion-related noise, we continue to find the risk/reward in [Citi] attractive," he adds. Moszkowski rates the company with a buy.