Citigroup, Merrill Seek More Foreign Capital

Two of the biggest names on Wall Street are going hat in hand, again, to foreign investors.

Citigroup Inc. and Merrill Lynch & Co., two companies that just named new chief executives after being burned by the troubles in the U.S. housing market, recently raised billions of dollars from outside investors. Now, they are in discussions to get additional infusions of capital from investors, primarily foreign governments.

Merrill is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund. Citi could get as much as $10 billion, likely all from foreign governments.

Such large investments would be the latest sign big banks are undergoing a rapid recapitalization to stabilize their shaky financial foundations. Already, foreign governments have invested about $27 billion in Merrill, Citi, UBS AG and Morgan Stanley.

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