From the September 2010 issue of Treasury & Risk magazine

Citi's Balance Sheet Makeover

In the midst of the financial crisis, Eric Aboaf stepped in to transform the bank's liquidity and funding profile.

What a difference a year makes. On Aug. 2, Citigroup Treasurer Eric Aboaf led a $3 billion offering of senior unsecured debt in the form of $2.25 billion in 10-year bonds at 5.375% and a $750 million reopening of Citi's outstanding 4.75% notes. The offering was about three times oversubscribed, with a book approaching $8 billion. It was a far cry from just over a year ago in April 2009 when Aboaf stepped into the role of the bank's treasurer in the midst of the credit crisis.

Now Aboaf is ready to talk about the defining moments of crisis treasury management and how Citi has transformed its balance sheet, liquidity and funding profile.

Seeing reality in near real time was essential, but Citi also needed what Aboaf calls "headlights" to see where it was going in the financial murk. Developing forecasts became a top priority. "We ran our liquidity according to 30- to 90-day forecasts, which we updated daily," he recalls. "We needed to look ahead to what would need to be funded and when, and to what resources would become available and when.

"We built those forecasting tools in the heat of the crisis. Now we're starting to automate and embed them in our systems as we continue to reshape our balance sheet," Aboaf says.

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