Davis Polk & Wardwell is advising Citigroup Inc. on its agreement with the US Treasury, the Federal Reserve Board and the Federal Deposit Insurance Corp. pursuant to which the US government will provide a package of guarantees, liquidity access and capital.

Under the agreement, the US Treasury will invest $20 billion in Citi preferred stock under the Troubled Asset Relief Program. Additionally, Citi will issue an incremental $7 billion in preferred stock to the US Treasury and the FDIC as payment for a government guarantee on $306 billion of securities, loans and commitments backed by residential and commercial real estate and other assets. Citi will also issue warrants to the US Treasury and the FDIC for approximately 254 million shares of Citi’s common stock.

The Davis Polk corporate team included partners George R. Bason Jr. and Louis L. Goldberg and associates Ashleigh S. Kyle, H. Oliver Smith and David L. Portilla. Partner Randall D. Guynn and associates Cristina Diaz and Pengyu Jeff He are providing financial regulatory advice. Partners Lawrence E. Wieman and Joseph P. Hadley and associates Norberto E. Quintana and Molly C. Breyfogle are providing credit advice. Partners Avishai Shachar and Neil Barr are providing tax advice. All members of the Davis Polk team are based in the New York office.