Citi's plans to reorganize itself into two operating firms will not affect its municipal securities division, the company said Friday.

The division - the municipal market's top underwriter - will remain a part of the corporate and investment bank, which will fall under the Citicorp umbrella of the company's core entities, a spokeswoman said.

The company will break off its non-core businesses into Citi Holdings, which will include its brokerage and asset management unit, local consumer finance, and the pool of debt covered under a loss agreement with the federal government.

Citi has been one of the companies hit hardest by the credit crisis, with its stock falling more than 93% in two years. It announced its reorganization plans while reporting a $8.29 billion net loss for the fourth quarter of 2008 and a $18.72 billion net loss for the year.

"Given the economic and market environment, we have decided to accelerate the implementation of our strategy to focus on our core businesses," Citi chief executive officer Vikram Pandit said in a statement. "This will help in our ongoing efforts to reduce our balance sheet and simplify our organization, which will enable us to better serve our clients and customers in both businesses without disruption."

The bank cut about 52,000 jobs in 2008 as part of its restructuring efforts, with a portion of those cuts coming from its municipals unit. Citi laid off about 70 professionals from its tax-exempt group in November, The Bond Buyer reported. It does not appear to have cut the staff since.

Moody's Investors Service yesterday put Citigroup's A2 rating on review for downgrade.

Elsewhere, the federal government last week agreed to help Bank of America Corp. with its acquisition of Merrill Lynch & Co. Merrill's financial condition deteriorated rapidly in December, putting its deal in doubt and prompting the federal government to step in with support. Merrill recorded a preliminary $15.31 billion fourth-quarter net loss, Bank of America said.

Through the assistance, the Treasury Department and the Federal Deposit Insurance Corp. will protect Bank of America against "unusually large losses on an asset pool of approximately $118 billion of loans" - most of which came from Merrill. In addition, Bank of America, which Friday reported a net loss of $1.79 billion for the fourth quarter, will receive a $20 billion capital injection through the Treasury's Troubled Asset Relief Program.

The government agencies will receive preferred stock in return for their assistance. Bank of America has also agreed to restrictions on executive compensation and to a mortgage-loan modification program.

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