Citigroup expects to convert into common stock a total of $58 billion of preferred stock and trust preferred securities, assuming full participation in the swaps.
Citigroup said in late February that it wanted to offer investors the option of exchanging preferred stock into common stock as a way to boost its capital reserves. As such, the government agreed to convert about $25 billion of its $45 billion preferred investment in the bank to common stock, which will give it a 34 percent stake in the New York bank.
The deal boosts Citi's common equity -- a benchmark the government is using to measure a bank's ability to absorb losses.
Citigroup has been one of the most troubled banks throughout the financial crisis. Investors have long criticized its board and management for allowing the bank to make big investments in the risky housing market -- actions that led to Citigroup reporting billions in losses.
Last month, the government determined that it would need to raise an additional $5.5 billion as a buffer against future losses. Citigroup said it would convert an extra $5.5 billion of preferred shares into common stock to meet this capital shortfall.