Citigroup Inc. is acquiring the banking operations of the troubled firm Wachovia Corp. in another transaction facilitated by the Federal Deposit Insurance Corp.

Under the terms of the deal, Citigroup will acquire the bulk of Wachovia’s assets and liabilities, including five depository institutions and it will assume its senior and subordinated debt. Wachovia will continue to own AG Edwards and Evergreen.

Also, the FDIC has entered into a loss sharing arrangement on a pre-identified pool of loans. Under the agreement, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk.

The deal, which comes just days after the FDIC facilitated a similar transaction between JP Morgan Chase and Washington Mutual, is also supported by the Board of Governors of the U.S. Federal Reserve and the U.S. Treasury Secretary.

“On the whole, the commercial banking system in the United States remains well capitalized. This morning’s decision was made under extraordinary circumstances with significant consultation among the regulators and Treasury,” said FDIC chairman Sheila Bair. “This action was necessary to maintain confidence in the banking industry given current financial market conditions.”