Abu Dhabi to the rescue!

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The Abu Dhabi Investment Authority will invest $7.5 billion in Citigroup, offering the nation's largest bank needed capital to offset big losses from mortgages and other investments.

The cash from the sovereign investment fund of the Gulf Arab state, which has benefited from this year's surge in oil prices, will be convertible into no more than 4.9 percent of Citigroup Inc.'s equity. Citigroup characterized the investment as passive and said the fund will not be able to name any board members to the bank.

...

John McDonald, a Banc of America Securities analyst, said the investment will buy Citi some time, but will not fix the bank's debt troubles. "Capital infusions do not solve problems overnight," he wrote in a research note.

Investors, however, were relieved by the infusion and Citigroup shares rose 98 cents, or 3.3 percent to $30.78 at the open of trading Tuesday.

Citigroup's shares have lost about 45 percent of their value since the beginning of this year, wiping away $124 billion in market capitalization, and touched a five-year low Monday as the drumbeat of bad news about its investment losses has grown more persistent.

http://biz.yahoo.com/ap/071127/citigroup_abu_dhabi.html