U.S. banking giant Citigroup Inc. announced that it has commenced an offering of approximately US$3 billion of common stock, as it aims to shore up its capital position.

Citi expects the offering to include an over-allotment option to purchase additional shares of common stock. The firm says that, on a pro forma basis, after giving effect to Citi’s recent issuance of US$6 billion of preferred stock and an assumed issuance of US$3 billion of common stock in this offering, its Tier 1 capital ratio at the latest quarter end (March 31) would have been approximately 8.5%.

“We are issuing common equity at this time as we continue to optimize our capital structure,” said Gary Crittenden, chief financial officer of Citi. “We’re pleased with the strong interest we have already received regarding this issuance.”

Citi Markets & Banking is serving as sole book-running manager of this offering.