Citigroup Downgraded

Bloomberg-Nov. 19 (Bloomberg) -- Citigroup Inc., the largest U.S. bank by assets, was lowered to ``sell'' by a Goldman Sachs Group Inc. analyst who predicted that the lender's writedowns of collateralized debt obligations will total $15 billion over the next two quarters.
''Given the dislocations in the credit markets, we have become more pessimistic,'' New York-based analyst William F. Tanona wrote to investors today, downgrading New York-based Citigroup from ``neutral.'' ``Citigroup will likely face an increasingly challenging operating environment which is likely to pressure results in many of their businesses.''
Citigroup's CDOs account for 25 percent of book value and 50 percent of tangible book value, compared with 20 percent for both those measures at Lehman Brothers Holdings Inc., Bear Stearns, JPMorgan, and Morgan Stanley, Tanona said. The bank's retail banking and credit card business may suffer as consumer-credit conditions worsen, he said.
Citigroup also may be hurt by a continued slowdown in the short-term debt market as investors steer clear of commercial paper issued by structured investment vehicles, Bank of America analyst John McDonald wrote in a note to clients today.
``SIVs face the possibility of selling assets at distressed values thereby exacerbating potential losses,'' wrote McDonald, who rates Citigroup shares as ``neutral.'' Citigroup said this month it provided $7.6 billion of financing to SIVs it runs after they were unable to pay maturing debt.