Morgan Stanley (NYSE: MS) to Serve as Advisor for U.S. Treasury Sale of Citigroup (NYSE: C) Stock

Morgan Stanley (NYSE: MS) has reached a deal with the government to serve as the underwriter and advisor on the U.S. Treasury’s sale of its 27% stake in Citigroup.

The stock sale, considered one of the largest offerings in history, will be conducted via a “dribble out” process, in which the U.S. Treasury will act as a sales agent, giving the government advice on when and how much stock to sell.

The offering is expected by many to begin after Citigroup reports its first quarter earnings on April 19th.

A CNBC report said that the Treasury’s stock sale will not represent more than 10% of the average daily trading volume in a single day. The stock sale will last an indefinite period of time since the offering’s completion will depend on market forces.

The U.S. Treasury invested $45 billion directly into Citigroup during the height of the financial crisis and has provided backing for $300 billion worth of the bank’s real estate and loans.

With a current price per share of $4.31, the government’s Citigroup shares are worth around $32 billion, which could net the government an $8.2 billion profit.