E*Trade Gets Help From Citadel
Wall Street Journal:
E*Trade Financial Corp., which is ensnared in the mortgage crisis, said it is getting a $2.55 billion cash infusion from Citadel Investment Group, in a bid to restore confidence and liquidity in the discount brokerage.
The plan was put together in consultation with the Office of Thrift Supervision, Citadel will make a two-part investment in E*Trade, which is based in New York. The first component is the purchase of E*Trade's entire $3 billion portfolio of asset-backed securities for a value of around $800 million. The second component is the purchase of $1.75 billion worth of 10-year notes, paying an annual interest rate of about 12.5%.