UPDATE 1-Merrill sees $6 bln writedown at Citigroup in Q3 | Reuters: "July 30 (Reuters) - Merrill Lynch expects Citigroup Inc (C.N: Quote, Profile, Research) to write down about $6 billion in the third quarter and lowered its earnings estimate for the quarter to a loss, but ruled out the possibility of a capital raise.
The brokerage, which has a 'neutral' rating on the stock, cut its third quarter estimate to a loss of 28 cents a share from a profit of 13 cents.
The brokerage said that collateralized debt obligations (CDOs) backed by 2006-2007 vintage subprime mortgages may need to be marked to around 22 cents on the dollar.
Merrill said Citigroup carries its net subprime related CDO super-senior positions at $18.1 billion, which was less than half of its September 2007 valuation of $43 billion."
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