Gulf funds eyed for further U.S. bank bailouts

(Reuters) - The sovereign funds of Kuwait and other Gulf states were in the spotlight on Monday as Citigroup sought extra emergency funding and its fellow U.S. bank Merrill Lynch was said to want more cash too.

The moves came as one newspaper report raised questions over whether previously agreed Chinese funding for Citigroup may fall through.

Citigroup, the largest U.S. bank by assets, is looking for more funds to help it through losses from the subprime crisis after securing $7.5 billion from the Abu Dhabi Investment Authority in November, a source familiar with the situation told Reuters in New York.

Merrill is seeking about $4 billion from the Kuwait Investment Authority and others as it faces as much as $15 billion in credit market losses, The Financial Times newspaper reported.

The newspaper said a Merrill deal could be announced as soon as midweek, and that other investors could come from Europe.

A public relations official for the KIA, which manages funds for Kuwait, referred calls to Managing Director Bader al-Sa'ad, who could not be reached in his office or on his mobile phone.

In December, Merrill shored up its capital base by as much as $7.5 billion after selling a stake to Singapore state fund Temasek and asset manager Davis Selected Advisers.

 

Read more at Reuters