NEW YORK TIMES: Citigroup reached an agreement early Monday morning to acquire the banking operations of the Wachovia Corporation after making a daring bid that pulled the deeply troubled company from the brink of collapse. Federal regulators worked around the clock this weekend to orchestrate the sale, finally reaching an agreement at 4 a.m. on Monday morning. In the end, the government agreed to provide Citigroup with a financial guarantee on Wachovia’s most risky assets. It is similar to the deal that the Federal Reserve established with JP Morgan Chase’s emergency takeover of Bear Stearns. Citigroup will assume the first $42 billion on losses tied to Wachovia’s riskiest mortgages and will pay the Federal Insurance Deposit Corporation $12 billion in preferred stock and warrants. In exchange, the F.D.I.C. will absorb all losses above that amount. Federal regulators said the move was necessary to stave off what could have been the second big bank failure in less than a week. On Thursday, the government seized Washington Mutual and sold the bulk of its operations to JPMorgan Chase. MORE
PHAWKER: Hey, That’s MY Bank! WTF?
UPDATE: Astute reader Moshe Loternik points out that Wachovia is one of the three prime corporate sponsors of Thursday’s vice presidential debate, along with Emerson and AT&T. File this under FASCINATING, CAPTAIN.