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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1998NOVEMBER 20, 2000
REGISTRATION NO. 333-333-49442
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CITIGROUP INC. DELAWARE 52-1568099
CITIGROUP CAPITAL VI DELAWARE 06-6446485
CITIGROUP CAPITAL VII DELAWARE 06-6446486
CITIGROUP CAPITAL VIII DELAWARE 06-1532080
CITIGROUP CAPITAL IX DELAWARE 06-1532083
CITIGROUP CAPITAL X DELAWARE 06-1532084
CITIGROUP CAPITAL XI DELAWARE 06-1532087
CITIGROUP CAPITAL XII DELAWARE 06-1532088
CITIGROUP CAPITAL XIII DELAWARE 06-1532089
(EXACT NAME OF
REGISTRANT AS (STATE OR OTHER JURISDICTION
SPECIFIED IN ITS OF (I.R.S. EMPLOYER
SPECIFIED IN ITS
CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBERS)
153 EAST 53RD STREET399 PARK AVENUE
NEW YORK, NY 10043
(212) 559-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------------(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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STEPHANIE B. MUDICK, ESQ.
DEPUTY GENERAL COUNSEL-CORPORATE LAWCOUNSEL
CITIGROUP INC.
153 EAST 53RD STREET399 PARK AVENUE
NEW YORK, NY 10043
(212) 559-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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COPIES TO:
GREGORY A. FERNICOLA, ESQ. FREDERICK W. KANNER, ESQ.
SKADDEN, ARPS, SLATE, DEWEY BALLANTINE LLP
MEAGHER & FLOM LLP 1301 AVENUE OF THE AMERICAS
919 THIRD AVENUE NEW YORK, NEW YORK 10019
NEW YORK, NEW YORK 10022
GREGORY A. FERNICOLA, ESQ. FREDERICK W. KANNER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP DEWEY BALLANTINE LLP
FOUR TIMES SQUARE 1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036-6522 NEW YORK, NEW YORK 10019
(212) 735-3000 (212) 259-8000
(212) 735-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: At such time (from time to time) after the effective date of this
Registration Statement as agreed upon by Citigroup Inc. and the Underwriters in
light of market conditions.
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If the only securities being registered on this Formform are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
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If any of the securities being registered on this Formform are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
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If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
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CALCULATION OF REGISTRATION FEE
(SEE FOLLOWING PAGE.)
------------------------------[X]
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A)8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A)8(a), MAY DETERMINE.
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING
OF SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(2)(3)
Debt Securities of Citigroup Inc.(5)...............
Index Warrants of Citigroup Inc.(6)................
Preferred Stock of Citigroup Inc.(7)...............
Depositary Shares of Citigroup Inc.(8).............
Common Stock of Citigroup Inc.(9)..................
Capital Securities of the Trusts(10)...............
Junior Subordinated Debt Securities of Citigroup
Inc.(10).........................................
Guarantees of Capital Securities of the Trusts and
certain back-up obligations(11)..................
Common Stock of Citigroup Inc. reserved for
issuance upon conversion or exchange of Debt
Securities, Preferred Stock, Depositary Shares
(12).............................................
Total (13)......................................... $4,150,000,000 $4,150,000,000
TITLE OF EACH CLASS AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTRATION FEE(4)
Debt Securities of Citigroup Inc.(5)...............
Index Warrants of Citigroup Inc.(6)................
Preferred Stock of Citigroup Inc.(7)...............
Depositary Shares of Citigroup Inc.(8).............
Common Stock of Citigroup Inc.(9)..................
Capital Securities of the Trusts(10)...............
Junior Subordinated Debt Securities of Citigroup
Inc.(10).........................................
Guarantees of Capital Securities of the Trusts and
certain back-up obligations(11)..................
Common Stock of Citigroup Inc. reserved for
issuance upon conversion or exchange of Debt
Securities, Preferred Stock, Depositary Shares
(12).............................................
Total (13)......................................... $1,153,700
(1) The proposed maximum offering price per unit will be determined from time2
INTRODUCTORY NOTE
This Registration Statement contains:
- a form of base prospectus relating to time by the relevant Registrant in connection with the issuance by such
Registrant of thedebt securities, registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457 under
the Securities Act of 1933, as amended. The aggregate public offering price
of the Debt Securities, Index Warrants, Preferred Stock, Depositary Sharesindex warrants,
preferred stock, depositary shares and Junior Subordinated Debt Securitiescommon stock of Citigroup Inc. and;
- a form of prospectus supplement to the Capital
Securities of the Trusts registered hereby will not exceed $6,000,000,000 or
the equivalent thereof in one or more foreign currencies, foreign currency
units or composite currencies.
(3) Exclusive of accrued interest, distributions and dividends, if any.
(4) A filing fee aggregating $545,750 was previously paid in connection with
registration statements filed earlierbase prospectus relating to the
registrationoffering by Citigroup of $1,850,000,000 aggregate principal amountits Medium-Term Senior Notes, Series D, and
Medium-Term Subordinated Notes, Series D, in registered form; and
- a form of capital securities which are being
included in this Registration Statement. The filing feeprospectus relating to junior subordinated
debt securities of $1,153,700
relates solelyCitigroup and to the registrationcapital securities of $4,150,000,000 aggregate principal
amount of securities not previously registered.
(5) Subject to note (13) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time. Includes Debt Securities which may be purchased by underwriters to
cover over-allotments, if any.
(6) Subject to note (13) below, there is being registered hereunder an
indeterminate principal amount of Index Warrants representing rights to
receive an amount of cash or number of securities that will be determined by
reference to prices, yields, levels or other specified objective measures or
changes in an index or differences between two or more indices as may be
sold, from time to time.
(7) Subject to note (13) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock of Citigroup Inc. as from
time to time may be issued at indeterminate prices. Includes Preferred Stock
which may be purchased by underwriters to cover over-allotments, if any.
(8) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Depositary Shares as may be issued in the event that
Citigroup Inc. elects to offer fractional interests in the Preferred Stock
registered hereby. Includes Depositary Shares which may be purchased by
underwriters to cover over-allotments, if any.
(9) Subject to note (13) below, there is being registered hereunder an
indeterminate number of shares of Common Stock of Citigroup Inc. as from
time to time may be issued at indeterminate prices. Includes Common Stock
which may be purchased by underwriters to cover over-allotments, if any.
(10) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Capital Securities of Citigroup Capital VI, Citigroup
Capital VII, Citigroup Capital VIII, Citigroup Capital IX, Citigroup
Capital X, Citigroup Capital XI, Citigroup Capital XII and Citigroup
Capital XIII (each a "Trust") and such indeterminate principal
amount of Junior Subordinated Debt Securities of Citigroup Inc. as may from
time to time be issued at indeterminate prices. Includes Capital Securities
which may be purchased by underwriters to cover over-allotments, if any.
Junior Subordinated Debt Securities may be issued and sold to any Trust, in
which event such Junior Subordinated Debt Securities may later be
distributed to the holders of Capital Securities upon a dissolution of such
Trust and the distribution of the assets thereof.
(11) Includes the rights of holders of the Capital Securities under any
Guarantees and certain back-up undertakings, comprised of the obligations of
Citigroup Inc., to provide certain indemnities in respect of, and pay and be
responsible for certain costs, expenses, debts and liabilities of, each
Trust (other than with respect to the Capital Securities) and such
obligations of Citigroup Inc. as set forth in the Amended and Restated
Declaration of Trust of each Trust and the related Indenture, in each case
as further described in the Registration Statement.XIII. The Guarantees, when
taken together with Citigroup Inc.'s obligations under the Junior
Subordinated Debt Securities, the related Indenture and the Amended and
Restated Declaration of Trust, will provide a full and unconditional
guarantee on a subordinated basis by Citigroup Inc. of payments due on the
Capital Securities. No separate consideration will be received for any
Guarantees or such back-up obligations.
(12) Such indeterminate number of shares of Common Stock as may be issued upon
conversion of or in exchange for any Debt Securities, Preferred Stock or
Depositary Shares that provide for such conversion or exchange are being
registered hereby. No separate consideration will be received for the Common
Stock issuable upon such conversion or exchange.
(13) As described in note (4) above and the paragraph below, this Registration
Statement relates to the registration of $4,150,000,000 aggregate principal
amount ofcapital securities being registered hereby and an additional
$1,850,000,000 aggregate principal amount of securities previously
registered. In no event will the aggregate offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$6,000,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units or composite currencies.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectuses and Prospectus Supplement included in this Registration Statement
also relate to the Debt Securities of Citigroup Inc. (formerly Travelers Group
Inc.) and the Trust Preferred Securities of Citigroup Capital VI (formerly
Travelers Capital VI) and Citigroup Capital VII (formerly Travelers Capital
VII), the Junior Subordinated Debt Securities of Citigroup Inc., the Guarantees
of Trust Preferred Securities of such Citigroup Capital Trusts and certain
back-up obligations, the Preferred Stock and the Depositary Shares previously
registered under Registration Statements on Form S-3 (Nos. 333-51201 and
333-42575) of Citigroup Inc. and such Citigroup Capital Trusts, as applicable. A
filing fee of $457,250 was paid in connection with the $1,550,000,000 of
securities that remain eligible to be sold under the Registration Statement on
Form S-3 (No. 333-51201) of Citigroup Inc. as of December 15, 1998. A filing fee
of $88,500 was paid in connection with the $300,000,000 of securities that
remain eligible to be sold under the Registration Statement on Form S-3 (No.
333-42575) of Citigroup Inc. and such Citigroup Capital Trusts as of December
15, 1998.
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INTRODUCTORY NOTE
This Registration Statement contains (i) a form of Prospectus (the "Basic
Prospectus") relating to Debt Securities, Index Warrants, Preferred Stock,
Depositary Shares and Common Stock of Citigroup Inc. (formerly Travelers Group
Inc.) ("Citigroup" or the "Company"), (ii) a form of Prospectus Supplement to
the Basic Prospectus relating to the offering by Citigroup of its Medium-Term
Senior Notes, Series A, and Medium-Term Subordinated Notes, Series A, in
registered form (the "MTN Prospectus Supplement") and (iii) a form of Prospectus
(the "Capital Securities Prospectus") relating to Junior Subordinated Debt
Securities of Citigroup and to the Capital Securities of Citigroup Capital VI
(formerly Travelers Capital VI), Citigroup Capital VII (formerly Travelers
Capital VII), Citigroup Capital VIII (formerly Travelers Capital VIII),
Citigroup Capital IX, Citigroup Capital X, Citigroup Capital XI, Citigroup
Capital XII and Citigroup Capital XIII (each a "Citigroup Trust" or a "Trust"
and collectively the "Citigroup Trusts" or the "Trusts"). The Capital Securities
Prospectusprospectus may be used for one or
more offerings by Citigroup and the respective Citigroup Trusts.trusts. To the
extent required, the information in the Capital
Securities Prospectus,capital securities prospectus,
including financial information, will be updated at the time of such offerings.each
offering.
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SUBJECT TO COMPLETION, DATED DECEMBER 15, 1998
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WECITIGROUP INC. MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 20, 2000
PROSPECTUS
[LOGO][CITIGROUP LOGO]
May Offer--
DEBT SECURITIES
INDEX WARRANTS
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WeOffer --
$25,000,000,000
Debt Securities
Index Warrants
Preferred Stock
Depositary Shares
Common Stock
Citigroup will provide the specific terms of these securities in
supplements to this Prospectus.prospectus. You should read this Prospectusprospectus and anythe
accompanying Prospectus
Supplementprospectus supplement carefully before you invest.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES OR
INSURANCE COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.Neither the Securities and Exchange Commission nor any state securities or
insurance commission has approved or disapproved of these securities or
determined if this prospectus or any accompanying prospectus supplement is
truthful or complete. Any representation to the contrary is a criminal offense.
These securities are not deposits or savings accounts but are unsecured
obligations of Citigroup. These securities are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency or
instrumentality.
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, 19982000
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PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT AND MAY NOT
CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND THE TERMS
OF OUR SECURITIES, YOU SHOULD CAREFULLY READ THIS DOCUMENT AND THE PROSPECTUS
SUPPLEMENT THAT EXPLAINS THE SPECIFIC TERMS OF THE SECURITIES WE ARE OFFERING.
YOU SHOULD ALSO READ THE DOCUMENTS WE HAVE REFERRED TO IN "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE" BELOW FOR INFORMATION ON OUR COMPANY AND OUR
FINANCIAL STATEMENTS. THE PROSPECTUS SUPPLEMENT MAY ALSO ADD, UPDATE OR CHANGE
INFORMATION CONTAINED IN THIS PROSPECTUS. IT IS IMPORTANT FOR YOU TO CONSIDER
THE INFORMATION IN THE PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT, INCLUDING
DOCUMENTS WE HAVE INCORPORATED BY REFERENCE, IN MAKING YOUR INVESTMENT DECISION.
OUR COMPANYThis summary provides a brief overview of the key aspects of Citigroup Inc.'s (formerly Travelers Group Inc.) ("Citigroup" orand
all material terms of the "Company")offered securities which are known as of the date of
this prospectus. For a more complete understanding of the terms of the offered
securities, before making your investment decision, you should carefully read:
- this prospectus, which explains the general terms of the securities that
Citigroup may offer;
- the accompanying prospectus supplement, which (1) explains the specific
terms of the securities being offered and (2) updates and changes
information in this prospectus; and
- the documents referred to in "Where You Can Find More Information" on
page 5 for information on Citigroup, including its financial statements.
CITIGROUP INC.
Citigroup is a diversified holding company whose businesses provide a broad
range of financial services to consumer and corporate customers aroundin more than 100
countries and territories. Citigroup's activities are conducted through Global
Consumer, Global Corporate and Investment Bank, Global Investment Management and
Private Banking, and Investment Activities.
Citigroup's principal executive office is at 399 Park Avenue, New York, NY
10043, and its telephone number is (212) 559-1000.
THE SECURITIES CITIGROUP MAY OFFER
Citigroup may use this prospectus to offer up to $25,000,000,000 of:
- debt securities;
- index warrants;
- preferred stock;
- depositary shares; and
- common stock.
A prospectus supplement will describe the world. Amongspecific types, amounts, prices,
and detailed terms of any of these businessesoffered securities.
DEBT SECURITIES
Debt securities are Citibank,
Commercial Credit, Primerica Financial Services,unsecured general obligations of Citigroup in the form
of senior or subordinated debt. Senior debt includes Citigroup's notes, debt and
guarantees and any other debt for money borrowed that is not subordinated.
Subordinated debt, so designated at the time it is issued, would not be entitled
to interest and principal payments if interest and principal payments on the
senior debt were not made.
The senior and subordinated debt will be issued under separate indentures
between Citigroup and a trustee. Below are summaries of the general features of
the debt securities from these indentures. For a more detailed description of
these features, see "Description of Debt Securities" below. You are also
encouraged to read the indentures, which are incorporated by reference in
Citigroup's registration statement No. 333-49442, Citigroup's most recent annual
report on Form 10-K, Citigroup's quarterly reports on Form 10-Q filed after the
Form 10-K and Citigroup's current reports on Form 8-K filed after the Form 10-K.
You can receive copies of these documents by following the directions on page 5.
General Indenture Provisions that Apply to Senior and Subordinated Debt
- Neither indenture limits the amount of debt that Citigroup may issue or
provides holders any protection should there be a highly leveraged
transaction involving Citigroup, although the senior
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debt indenture does limit Citigroup's ability to pledge the stock of any
subsidiary that meets the financial thresholds in the indenture. These
thresholds are described below under "Description of Debt Securities."
- Each indenture allows for different types of debt securities, including
indexed securities, to be issued in series.
- The indentures allow Citigroup to merge or to consolidate with another
company, or sell all or substantially all of its assets to another
company. If any of these events occur, the other company generally would
be required to assume Citigroup's responsibilities for the debt. Unless
the transaction resulted in an event of default, Citigroup would be
released from all liabilities and obligations under the debt securities
when the other company assumed its responsibilities.
- The indentures provide that holders of 66 2/3% of the principal amount of
the senior debt securities and holders of a majority of the total
principal amount of the subordinated debt securities outstanding in any
series may vote to change Citigroup's obligations or your rights
concerning those securities. However, changes to the financial terms of
that security, including changes in the payment of principal or interest
on that security or the currency of payment, cannot be made unless every
holder of that security consents to the change.
- Citigroup may satisfy its obligations under the debt securities or be
released from its obligation to comply with the limitations discussed
above at any time by depositing sufficient amounts of cash or U.S.
government securities with the trustee to pay Citigroup's obligations
under the particular securities when due.
- The indentures govern the actions of the trustee with regard to the debt
securities, including when the trustee is required to give notices to
holders of the securities and when lost or stolen debt securities may be
replaced.
Events of Default
The events of default specified in the indentures include:
- failure to pay principal when due;
- failure to pay required interest for 30 days;
- failure to make a required scheduled installment payment for 30 days;
- failure to perform other covenants for 90 days after notice; and
- certain events of insolvency or bankruptcy, whether voluntary or not.
Remedies
If there were a default, the trustee or holders of 25% of the principal
amount of debt securities outstanding in a series could demand that the
principal be paid immediately. However, holders of a majority in principal
amount of the securities in that series could rescind that acceleration of the
debt securities.
INDEX WARRANTS
Citigroup may issue index warrants independently or together with debt
securities. Citigroup will issue any series of index warrants under a separate
warrant agreement between Citigroup and a bank or trust company. You are
encouraged to read the standard form of the warrant agreement, which will be
filed as an exhibit to one of Citigroup's future current reports and
incorporated by reference in its registration statement No. 333-49442. You can
receive copies of these documents by following the directions on page 5.
Index warrants are securities that, when properly exercised by the
purchaser, entitle the purchaser to receive from Citigroup an amount in cash or
a number of securities that will be indexed to prices, yields, or other
specified measures or changes in an index or differences between two or more
indices.
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The prospectus supplement for a series of index warrants will describe the
formula for determining the amount in cash or number of securities, if any, that
Citigroup will pay you when you exercise an index warrant and will contain
information about the relevant underlying assets and other specific terms of the
index warrant.
Citigroup will generally issue index warrants in book-entry form, which
means that they will not be evidenced by physical certificates. Also, Citigroup
will generally list index warrants for trading on a national securities
exchange, such as the New York Stock Exchange, the Nasdaq Stock Market's
National Market or the Chicago Board Options Exchange.
The warrant agreement for any series of index warrants will provide that
holders of a majority of the total principal amount of the index warrants
outstanding in any series may vote to change their rights concerning those index
warrants. However, changes to fundamental terms such as the amount or manner of
payment on an index warrant or changes to the exercise times cannot be made
unless every holder affected consents to the change.
Any prospective purchasers of index warrants should be aware of special
United States federal income tax considerations applicable to instruments such
as the index warrants. The prospectus supplement relating to each series of
index warrants will describe the important tax considerations.
PREFERRED STOCK
Citigroup may issue preferred stock with various terms to be established by
its board of directors or a committee designated by the board. Each series of
preferred stock will be more fully described in the particular prospectus
supplement that will accompany this prospectus, including redemption provisions,
rights in the event of liquidation, dissolution or winding up of Citigroup,
voting rights and conversion rights.
Generally, each series of preferred stock will rank on an equal basis with
each other series of preferred stock and will rank prior to Citigroup's common
stock. The prospectus supplement will also describe how and when dividends will
be paid on the series of preferred stock.
DEPOSITARY SHARES
Citigroup may issue depositary shares representing fractional shares of
preferred stock. Each particular series of depositary shares will be more fully
described in the prospectus supplement that will accompany this prospectus.
These depositary shares will be evidenced by depositary receipts and issued
under a deposit agreement between Citigroup and a bank or trust company. You are
encouraged to read the standard form of the deposit agreement, which is
incorporated by reference in Citigroup's registration statement No. 333-49442.
You can receive copies of this document by following the directions on page 5.
COMMON STOCK
Citigroup may issue common stock, par value $.01 per share. Holders of
common stock are entitled to receive dividends when declared by its board of
directors. Each holder of common stock is entitled to one vote per share. The
holders of common stock have no preemptive rights or cumulative voting rights.
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USE OF PROCEEDS
Citigroup will use the net proceeds it receives from any offering of these
securities for general corporate purposes, primarily to fund its operating units
and subsidiaries. Citigroup may also use a portion of the proceeds to finance
possible acquisitions or business expansion and to refinance or extend the
maturity of existing debt obligations. Citigroup may use a portion of the
proceeds from the sale of index warrants and indexed notes to hedge its exposure
to payments that it may have to make on such index warrants and indexed notes as
described below under "Use of Proceeds and Hedging."
PLAN OF DISTRIBUTION
Citigroup may sell the offered securities in any of the following ways:
- to or through underwriters or dealers;
- by itself directly;
- through agents; or
- through a combination of any of these methods of sale.
The prospectus supplement will explain the ways Citigroup sells specific
securities, including the names of any underwriters and details of the pricing
of the securities, as well as the commissions, concessions or discounts
Citigroup is granting the underwriters, dealers or agents.
If Citigroup uses underwriters in any sale, the underwriters will buy the
securities for their own account and may resell the securities from time to time
in one or more transactions, at a fixed public offering price or at varying
prices determined at the time of sale. In connection with an offering,
underwriters and selling group members and their affiliates may engage in
transactions to stabilize, maintain or otherwise affect the market price of the
securities, in accordance with applicable law.
Citigroup expects that the underwriters for any offering will include one
or more of its broker-dealer subsidiaries, including Salomon Smith Barney SSBC
Asset Management, Travelers Life & AnnuityInc.
These broker-dealer subsidiaries, including their successors, also expect to
offer and Travelers Property Casualty.
On October 8, 1998,sell previously issued offered securities as part of their business,
and may act as a principal or agent in such transactions. Citigroup or any of
its subsidiaries may use this prospectus and the Company changed its name from Travelers Group Inc.
to Citigroup Inc.related prospectus supplements
and pricing supplements in connection with these activities.
RATIO OF INCOME TO FIXED CHARGES AND
RATIO OF INCOME TO COMBINED FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
The following table shows (1) the mergerconsolidated ratio of Citicorp into a newly formed,
wholly owned subsidiaryincome to fixed
charges and (2) the consolidated ratio of income to combined fixed charges
including preferred stock dividends of Citigroup for the nine months ended
September 30, 2000 and each of the Company.five most recent fiscal years.
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
2000 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
Ratio of income to fixed charges
(excluding interest on deposits)........ 2.09 2.13 1.57 1.71 1.88 1.65
Ratio of income to fixed charges
(including interest on deposits)........ 1.64 1.64 1.33 1.43 1.51 1.39
Ratio of income to combined fixed charges
including preferred stock dividends
(excluding interest on deposits)........ 2.07 2.09 1.54 1.66 1.80 1.56
Ratio of income to combined fixed charges
including preferred stock dividends
(including interest on deposits)........ 1.63 1.62 1.32 1.41 1.48 1.35
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WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, Citigroup filed a registration
statement (No. 333-49442) relating to the securities offered by this prospectus
with the Securities and Exchange Commission. This prospectus is a part of that
registration statement, which includes additional information.
Citigroup files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document Citigroup
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can also request copies of the documents, upon
payment of a duplicating fee, by writing the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. These SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov.
The CompanySEC allows Citigroup to "incorporate by reference" the information it
files with the SEC, which means that it can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus. Information that
Citigroup files later with the SEC will automatically update information in this
prospectus. In all cases, you should rely on the later information over
different information included in this prospectus or the prospectus supplement.
Citigroup incorporates by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934:
(a) Annual Report on Form 10-K for the year ended December 31, 1999, as
amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000,
June 30, 2000 and September 30, 2000;
(c) Current Reports on Form 8-K filed on January 19, 2000, February 16,
2000, February 28, 2000, April 18, 2000, June 20, 2000, July 20, 2000,
July 20, 2000, July 25, 2000, September 6, 2000, October 11, 2000 and
October 19, 2000; and
(d) Registration Statement on Form 8-B, dated May 10, 1988, describing our
common stock, including any amendments or reports filed for the purpose
of updating such description.
All documents Citigroup files pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the later of
(1) the completion of the offering of the securities described in this
prospectus and (2) the date the broker-dealer subsidiaries of Citigroup stop
offering securities pursuant to this prospectus shall be incorporated by
reference in this prospectus from the date of filing of such documents.
You may request a copy of these filings, at no cost, by writing or
telephoning Citigroup at the following address:
Citigroup Document Services
140 58th Street, Suite 5I
Brooklyn, NY 11220
(877) 936-3737 (toll free)
(718) 765-6460 (outside the U.S.)
You should rely only on the information provided in this prospectus and the
prospectus supplement, as well as the information incorporated by reference.
Citigroup has not authorized anyone to provide you with different information.
Citigroup is not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus, the prospectus supplement or any documents incorporated by reference
is accurate as of any date other than the date on the front of the applicable
document.
5
9
FORWARD-LOOKING STATEMENTS
This prospectus, the accompanying prospectus supplement and the information
incorporated by reference in this prospectus include forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. These forward-looking statements are based on our management's
beliefs and assumptions and on information currently available to our
management. Forward-looking statements include information concerning our
possible or assumed future results of operations and statements preceded by,
followed by or that include the words "believes," "expects," "anticipates,"
"intends," "plans," "estimates" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. Factors that could cause actual results to differ
from these forward-looking statements include, but are not limited to, those
discussed elsewhere in this prospectus, the accompanying prospectus supplement
and the documents incorporated by reference in this prospectus. You should not
put undue reliance on any forward-looking statements. We do not have any
intention or obligation to update forward-looking statements after we distribute
this prospectus.
6
10
CITIGROUP INC.
Citigroup is a diversified holding company whose businesses provide a broad
range of financial services to consumer and corporate customers in more than 100
countries and territories. Citigroup's activities are conducted through Global
Consumer, Global Corporate and Investment Bank, Global Investment Management and
Private Banking, and Investment Activities.
Citigroup is a holding company and services its obligations primarily with
dividends and advances that it receives from subsidiaries. Certain subsidiaries'
dividend paying abilitiesCitigroup's
subsidiaries that operate in the banking, insurance and securities business can
only pay dividends if they are limited by certain covenant restrictions in credit
agreements and/or bycompliance with the applicable regulatory
requirements including those imposed on them by federal and state bank regulatory authorities,
thestate insurance departments of a number of states,
and various capital requirements imposed by securities regulators. The Company
isCitigroup's subsidiaries
may be party to credit agreements that also subjectmay restrict their ability to certainpay
dividends. Citigroup currently believes that none of these regulatory or
contractual restrictions on the ability of its subsidiaries to pay dividends
will affect Citigroup's ability to service its own debt. Citigroup must also
maintain the required capital requirements aslevels of a bank holding company.company before it may pay
dividends on its stock. Each of the Company'sCitigroup's major operating subsidiaries
finances its operations on a stand-alone basis consistent with its
capitalization and ratings.
Under longstanding policy of The Board of Governors of the Federal Reserve
System, a bank holding company is expected to act as a source of financial
strength for its subsidiary banks and to commit resources to support such banks.
As a result of that policy, the CompanyCitigroup may be required to commit resources to its
subsidiary banks in certain circumstances.banks.
The principal office of the CompanyCitigroup is located at 153 East 53rd Street,399 Park Avenue, New York,
NY 10043, and its telephone number is (212) 559-1000.
If you would like
additional information about our Company, please refer to7
11
USE OF PROCEEDS AND HEDGING
General. Citigroup will use the information under
"Available Information" below.
THE SECURITIES WE MAY OFFER
The Company may issue from time to time (i) debt securities ("Debt
Securities"), which may be senior debt securities of the Company or subordinated
to other indebtedness of the Company; (ii) warrants ("Index Warrants")
representing the right to receive, upon exercise, an amount in cash or number of
securities that will be determined by reference to prices, yields, levels or
other specified objective measures, or changes in an index or differences
between two or more indices; (iii) preferred stock ("Preferred Stock") in one or
more series; (iv) fractional shares of Preferred Stock represented by depositary
receipts ("Depositary Shares"); or (v) common stock ("Common Stock"), all having
an aggregate initial public offering price or purchase price of up to
$6,000,000,000, or equivalent amount in one or more foreign or composite
currencies. The Debt Securities, Index Warrants, Preferred Stock, Depositary
Shares and Common Stock are referred to in this Prospectus collectively as the
"Offered Securities." The Offered Securities may be offered separately or as
units with other Offered Securities, in separate series, in amounts, at prices
and on terms to be determined at or prior to the time of sale.
2
The registration statement to which this Prospectus relates also contemplates
the sale of other securities pursuant to separate prospectuses. The sale of
other securities under the registration statement of which this Prospectus forms
a part will reduce the amount of Offered Securities that may be sold hereunder.
The specific terms of the Offered Securities with respect to which this
Prospectus is being delivered will be set forth in an accompanying supplement to
this Prospectus (a "Prospectus Supplement"), together with the terms of the
offering of the Offered Securities and the initial price and the net proceeds to
the Companyit receives from the sale of the
Offered Securities. The Prospectus Supplement
will also contain other applicable information about the Offered Securities such
as certain United States federal income tax considerations or any listing on aoffered securities exchange. This Prospectus may not be used to consummate sales of
Offered Securities unless accompanied by a Prospectus Supplement.
For a description of certain terms that may relate to the Offered
Securities, see "Description of Debt Securities," "Description of Index
Warrants," "Description of Preferred Stock," "Description of Capital Stock" and
"Description of Depositary Shares" below.
See "Description of Index Warrants--Special Considerations Relating to Index
Warrants" for a description of certain risks associated with an investment in
Index Warrants. In addition, prospective investors should see "European Monetary
Union" for a discussion of certain matters that may pertain to Offered
Securities and relate to the introduction of a single currency in Europe.
3
USE OF PROCEEDS AND HEDGING
GENERAL. The proceeds to be received by the Company from the sale of the
Offered Securities will be used for general corporate purposes, principally to
fundwhich may include
- funding the business of its operating units and to fundunits;
- funding investments in, or extensions of credit or capital contributions
to, its subsidiariessubsidiaries;
- financing of possible acquisitions or business expansion; and
to
lengthen- lengthening the average maturity of liabilities, which may include the reduction ofmeans that it
could reduce its short-term liabilities or the refunding ofrefund maturing indebtedness.
In order to
fund its business, the CompanyCitigroup expects to incur additional indebtedness in the future. The Companyfuture to fund
its businesses. Citigroup or an affiliate may enter into a swap agreement with one of
the Company's affiliates or a third party in
connection with the sale of the Offered Securitiesoffered securities and may earn additional
income as a resultfrom that transaction.
Use of payments
pursuantProceeds Relating to such swap or related hedge transactions.
USE OF PROCEEDS RELATING TO INDEX WARRANTS AND INDEXED NOTES. All or a
portion of the proceeds to be received by the Company from the sale of Index Warrants or Debt Securities on which certain or all payments of interest,
principal or premium may be linked to an index ("and Indexed Notes") may be used by
the CompanyNotes. Citigroup or
one or more of its subsidiaries may use all or some of the proceeds received
from the sale of index warrants or indexed notes to purchase or maintain
positions in all or certain of the assets by referencethat are used to whichdetermine the relevant index or
indices are determinedindices. Citigroup or calculated ("Underlying Assets"),one or more of its subsidiaries may also purchase or
maintain positions in options, futures contracts, forward contracts or swaps, or
options on the foregoing,such securities, or other derivative or syntheticsimilar instruments relating
to such Indexthe relevant index or Underlying Assets,
asunderlying assets. Citigroup may also use the case may be, and, if applicable,proceeds
to pay the costs and expenses of hedging any currency, interest rate or other
index-related risk with respectrelating to such Index Warrantsindex warrants and Indexed Notes. From time to time after the initial offering
and prior to the maturity of the Index Warrants and Indexed Notes, depending on
market conditions (including the value of the index and/or the Underlying
Assets), in connection with hedging with respect to such Offered Securities, the
Companyindexed notes.
Citigroup expects that it or one or more of its subsidiaries will increase
or decrease their initial hedging positionsposition over time using dynamic hedging techniques which help
evaluate the size of any hedge based upon a variety of factors affecting the
value of the underlying instrument. These factors may include the history of
price changes in that underlying instrument and the time remaining to maturity.
Citigroup may take long or short positions in the index, the Underlying Assets,underlying assets,
options, futures contracts, forward contracts, swaps, or other derivative or
syntheticsimilar instruments related to the index and such Assets.the underlying assets. These other
hedging activities may occur from time to time before the index warrants and
indexed notes mature and will depend on market conditions and the value of the
index and the underlying assets.
In addition, the CompanyCitigroup or one or more of its subsidiaries may purchase or
otherwise acquire a long or short position in Index Warrantsindex warrants and Indexed Notesindexed notes
from time to time and may, in their sole discretion, hold, resell, exercise,
cancel or retire such Offered
Securities. The Companyoffered securities. Citigroup or one or more of its
subsidiaries may also take hedging positions in other types of appropriate
financial instruments that may become available in the future.
To the extent that the CompanyIf Citigroup or one or more of its subsidiaries has a long hedge position
in, options contracts in, or other derivative or syntheticsimilar instruments related to,
the Underlying Assetsunderlying assets or index, the CompanyCitigroup or one or more of its subsidiaries may
liquidate all or a portion of its holdings at or about the time of the maturity
of the Index Warrantsindex warrants and Indexed Notes. Depending on, among other things, future market conditions, theindexed notes. The aggregate amount and compositiontype of such
positions are likely to vary over time.
Profitstime depending on future market conditions and
other factors. Citigroup is only able to determine profits or losses from any
such position cannot be ascertained until suchwhen the position is closed out and any offsetting position or
positions are taken into account.
Although the CompanyCitigroup has no reason to believe that its hedging activity will have a
material impact on the price of such options, swaps, futures contracts, options
on the foregoing, or other derivative or syntheticsimilar instruments, or on the value of
the index or the Underlying Assets, there can be
no assuranceunderlying assets. However, Citigroup cannot guarantee you that
the Companyits hedging activities will not affect such prices or value as a result
of its hedging activities. Thevalue. Citigroup will use
the remainder of the proceeds from the sale of Index
Warrantsindex warrants and Indexed Notes will be used byindexed notes
for the Company for general corporate purposes as described above.
48
RATIO OF INCOME TO FIXED CHARGES AND
RATIO OF INCOME TO COMBINED FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
The following table sets forth (i) the supplemental consolidated ratio of
income to fixed charges and (ii) the supplemental consolidated ratio of income
to combined fixed charges including preferred stock dividends of the Company for
the nine months ended September 30, 1998 and for each of the five most recent
fiscal years, after giving retroactive effect to the merger with Citicorp on
October 8, 1998 in a transaction accounted for as a pooling of interests.
YEAR ENDED
DECEMBER 31,
NINE MONTHS ENDED ------------------------------------------
SEPTEMBER 30, 1998 1997 1996 1995 1994
--------------------- --------- --------- --------- ---------
Ratio of income to fixed charges (excluding interest on
deposits)............................................... 1.65 1.71 1.88 1.65 1.41
Ratio of income to fixed charges (including interest on
deposits)............................................... 1.39 1.43 1.51 1.39 1.25
Ratio of income to combined fixed charges including
preferred stock dividends (excluding interest on
deposits)............................................... 1.62 1.66 1.80 1.56 1.34
Ratio of income to combined fixed charges including
preferred stock dividends (including interest on
deposits)............................................... 1.37 1.41 1.48 1.35 1.21
1993
---------
Ratio of income to fixed charges (excluding interest on
deposits)............................................... 1.43
Ratio of income to fixed charges (including interest on
deposits)............................................... 1.25
Ratio of income to combined fixed charges including
preferred stock dividends (excluding interest on
deposits)............................................... 1.37
Ratio of income to combined fixed charges including
preferred stock dividends (including interest on
deposits)............................................... 1.22
5
12
EUROPEAN MONETARY UNION
The foreign currencies in which debt securities may be denominated or
payments in respect of index warrants may be due or by which amounts due on the
offered securities may be calculated could be issued by countries participating
in Stage III of the European Economic and Monetary Union ("Union.
Stage III") is
presently scheduled to commenceIII began on January 1, 1999 for thosethe eleven participating member
states of the European Union that satisfysatisfied the economic convergence criteria set forth in
the Treaty on European Union. On March 25, 1998, the European Commission
officially recommended that eleven of the member states of the European Union be
allowed to participate in Stage III; these eleven member states areUnion: Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain (collectively, the "Participating Member States"). It is
possible that additionalSpain. Other member
states of the European Union may participate in
Stage III afterstill become participating member states. It is
anticipated that Greece will become an additional participating member state on
January 1, 1999, in which case each such additional member state
will also become a "Participating Member State." Certain of the foreign
currencies in which Debt Securities may be denominated or payments in respect of
Index Warrants may be due or by which amounts due on the Offered Securities may
be calculated may be issued by Participating Member States (each such country, a
"Relevant Jurisdiction" with respect to such Offered Securities).2001.
Stage III includes the introduction of a single currency (the "Euro")the Euro, which, will be legal
tender in the Participating Member States, existing in parallelalong with the
present national currency of each Participating Member State.participating member state, is legal tender in
the participating member states. It is currently anticipated that on and after
January 1, 2002, the national currencies of Participating Member Statesparticipating member states will
cease to exist and the sole legal tender in such Statesstates will be the Euro. It is anticipated that theThe
European Union will
adopthas adopted regulations or other legislation providing specific rules for the
introduction of the Euro in substitution for the respective current national
currencies of such member states, whichand may adopt additional regulations or
legislation mayin the future relating to the Euro. It is anticipated that these
regulations or legislation will be supplemented by legislation of the individual
member states.
The laws and
regulations of the European Union (and, if any, of such Relevant Jurisdiction)
relating to the Euro implemented pursuant to or by virtue of the Treaty on
European Union may apply to the relevant Offered Securities, Indenture (as
defined below) or Indentures and Index Warrant Agreement (as defined below) or
Agreements. Such laws and regulations, and future market conventions applicable
in the European Union to securities similar to the relevant Offered Securities,
may be inconsistent in varying degrees with the terms and conditions of the
relevant Offered Securities established at their issuance. To the extent that
references in any Indenture or Index Warrant Agreement governing any relevant
Offered Securities or in the terms and conditions of any relevant Offered
Securities to any business day, day-count, day-count fraction or other
convention shall be inconsistent with such European Union laws, regulations or
market conventions that are applicable to securities similar to the relevant
Offered Securities held in international clearing systems, the Company, in its
discretion (but after consultation with the applicable trustee or warrant agent,
and with any principal paying agent located in a European Union member state),
may amend such references and terms and conditions to be in harmony with, or to
otherwise comply with, such laws, regulations and/or market conventions. Any
such amendment shall be effected without the necessity of obtaining the consent
of any Holder of the relevant Offered Securities.
If, following the commencement of Stage III, the Company has the option,
pursuant to applicable law, to make payments of principal of, or interest on or
any other amounts in respect of, the relevant Offered Securities, or to
calculate amounts due thereon, in either the current national currency of a
Relevant Jurisdiction or Euro, the Company will make such payments or
calculations in such national currency or Euro at its sole discretion. To the
extent that the introduction of the Euro necessitates the rounding up or down of
certain amounts or quotations expressed in Euro with respect to the relevant
Offered Securities, such rounding will be made in conformity with prevailing
market conventions in the European Union or, in the absence of an applicable
market convention, to the nearest Euro cent.
The circumstances and consequences described in this section and any
resultant amendment to the terms and conditions of the relevant Offered
Securities will not entitle any Holder of such Offered Securities (i) to any
legal remedy, including, without limitation, redemption, rescission, notice,
repudiation, adjustment or renegotiation of the terms and conditions of the
Offered Securities, Indenture or Indentures and Index Warrant Agreement or
Agreements, or (ii) to raise any defense or make any claim (including, without
limitation, claims of breach, force majeure, frustration of purpose or
impracticability) or any other claim for compensation, damages or any other
relief.
69
13
DESCRIPTION OF DEBT SECURITIES
The Debt Securitiesdebt securities offered by this prospectus will be unsecured
general obligations of the Company.
The Debt SecuritiesCitigroup and will constitutebe either senior or subordinated debt. Senior
debt of the
Company and will be issued in the case of Debt Securities that will be senior
debt, under a senior debt indenture (as amended or supplemented from time to
time, the "Senior Debt Indenture") and, in the case of Debt Securities thatindenture. Subordinated debt will be
subordinated debt,issued under a subordinated debt indenture (as amended or
supplemented from time to time, the "Subordinated Debt Indenture").indenture. The Senior
Debt Indenturesenior debt indenture and the
Subordinated Debt Indenturesubordinated debt indenture are sometimes hereinafter
referred to in this prospectus
individually as an "Indenture""indenture" and collectively as the "Indentures."
The institutions named as trustees under the Indentures are hereinafter referred
to individually as a "Trustee" and collectively as the "Trustees."indentures." Forms of
the Indenturesindentures have been filed with the SEC and are incorporated by reference as
part ofin
the Registration Statementregistration statement on Form S-3 (No. 333- )333-49442) under the Securities Act
of 1933 as amended (the "Securities Act"), that the Company has
filed with the SEC relating to the Offered Securities (such registration
statement, together with all exhibits and amendments, the "Registration
Statement").of which this prospectus forms a part.
The following summaries of certainbriefly summarizes the material provisions of the Indenturesindentures
and the Debt Securities do not purport to be completedebt securities, other than pricing and are subject to, and are
qualified by,related terms disclosed in the
accompanying prospectus supplement. You should read the more detailed provisions
of the applicable Indenture,indenture, including the definitiondefined terms, for provisions that
may be important to you. You should also read the particular terms of certain terms used and for other information regardinga series
of debt securities, which will be described in more detail in the Debt
Securities.applicable
prospectus supplement. Copies of the Indenturesindentures may be obtained from the CompanyCitigroup
or the applicable Trustee. Numerical referencestrustee. So that you may easily locate the more detailed
provisions, the numbers in parentheses below arerefer to sections in the applicable
Indentureindenture or, if no Indentureindenture is specified, to sections in each of the
Indentures.indentures. Wherever particular sections or defined terms of the applicable
Indentureindenture are referred to, such sections or defined terms are incorporated hereininto
this prospectus by reference, as part of the statement made, and the statement isstatements in this prospectus are
qualified in its entirety by suchthat reference.
Unless otherwise provided in the applicable Prospectus Supplement,prospectus supplement, the
Trusteetrustee under the Senior Debt Indenturesenior debt indenture will be The Bank of New York, under an
Indenture dated as of March 15, 1987, as amended or supplemented from time to
time, and the
Trusteetrustee under the Subordinated Debt Indenturesubordinated debt indenture will be Bank One Trust Company,
N.A. (formerly The First National Bank of Chicago under an Indenture datedChicago). Citigroup may, at its
option, appoint Citibank, N.A. to act as of July 17, 1998, as
amended or supplemented from time to time.paying agent.
GENERAL
The Debt Securities will be unsecured senior or subordinated obligations of
the Company. As a holding company, the Company's sources of funds are derived
principally from advances and dividends from subsidiaries, certain of which are
subject to regulatory considerations, and from sales of assets and investments.
The Indenturesindentures provide that the Debt Securities and other unsecured senior or subordinated debt
securities of the Company, without limitation as to aggregate
principal amount,Citigroup may be issued in one or more series, and a single series may
be issued at various times, with different
maturity dates and different interest
rates,terms, in each case as authorized from time to time by Citigroup. Citigroup also
has the Company.
One or moreright to "reopen" a previous issue of a series of the Debt Securities may be issued with the same or
various maturities at par or at a discount.debt securities by
issuing additional debt securities of such series.
Federal income tax consequences and other special considerations applicable
to any Debt Securitiesdebt securities issued by the
CompanyCitigroup at a discount ("Original Issue Discount Securities") will be described in
the applicable Prospectus Supplement.
Referenceprospectus supplement.
Because Citigroup is madea holding company, the claims of creditors of
Citigroup's subsidiaries will have a priority over Citigroup's equity rights and
the rights of Citigroup's creditors, including the holders of debt securities,
to participate in the assets of the subsidiary upon the subsidiary's
liquidation.
The applicable Prospectus Supplementprospectus supplement relating to any series of Debt Securities fordebt
securities will describe the following terms, where applicable:
(1)- the designationtitle of the Debt Securities,debt securities;
- whether such Debt Securitiesthe debt securities will be senior or subordinated debt ofdebt;
- the Company and the Indenture under which
such Debt Securities are being issued;
(2) any limit on the aggregatetotal principal amount of the Debt Securities;
(3)debt securities;
- the percentage of the principal amount representing the price at which the Debt Securitiesdebt securities will
be issuedsold and, if applicable, the method by which such
principal amount will be determined;
7
(4)of determining the price;
- the maturity date or dates on whichdates;
- the principal of the Debt Securities will be
payable;
(5) theinterest rate or rates per annum (which may be fixed or variable) at which the
Debt Securities will bear interest, if any, or the method by which such
rate or rates will be determined;
(6)of computing the interest rate;
- the date or dates from which any interest will accrue, or the method by
whichhow such date
or dates will be determined, and the interest payment date or dates on which
any such interest will be payable and
any related record dates;
(7)- if other than in United States dollars, the currency or currency unit in
which payment of principal of, premium, if any, and interest on the Debt
Securities will be payable;
(8)made;
10
14
- if the amount of payment of principal of, premium, if any or any interest
on the Debt Securitiespayment may be determined with reference to an index
or formula based on a currency or currency unit other than that in which
the Debt Securitiesdebt securities are stated to be payable, the manner in which suchthe amounts will be
determined;
(9) if the principal of, premium,- if any or any interest on the Debt
Securities is topayments may be payablemade at the election of the CompanyCitigroup or a holder thereofof
debt securities in a currency or currency unit other than that in which
the Debt
Securitiesdebt securities are stated to be payable, the periods within which
and the terms upon which such election may be made;
(10)- the place or placeslocation where the principal of, premium, if any, and any
interestpayments on the Debt Securitiesdebt securities will be payable;
(11) the price or prices at which, the period or periods within which andmade;
- the terms and conditions uponon which the Debt Securitiesdebt securities may be redeemed in
whole or in part, at
the option of the Company;
(12) theCitigroup;
- any obligation if any, of the CompanyCitigroup to redeem, purchase or repay the Debt Securities pursuant to any sinking fund or analogous provision ordebt
securities at the option of a holder thereof andupon the period or periods within which, the
price or prices at whichhappening of any event and
the terms and conditions upon which the Debt
Securities will be redeemed, purchasedof redemption, purchase or repaid, in whole or in part,
pursuant to such obligation;
(13)repayment;
- if other than the principal amount, thereof, the portion of the principal amount
of the Debt Securitiesdebt securities payable upon declaration of acceleration ofif the maturity of the Debt Securities;
(14)is accelerated;
- any provisions if any, for the discharge of the Company's indebtedness andCitigroup's obligations or termination of certain of its obligations under the
Indenture with respectrelating to
the Debt Securitiesdebt securities by deposit of funds or United States government
obligations;
(15)- whether the Debt Securitiesdebt securities are to be issuedtrade in whole or in part in thebook-entry form of a Global Security (defined below) and the terms
and any conditions if
any, upon which such Global Security or Securities may be exchangedfor exchanging the global security in whole or in part
for other definitive Securities;
(16)paper certificates;
- the date as of which any Global Security will be datedglobal security if other than the original issuance of
the first Debt Securitydebt security to be issued;
(17)- any material provisions of the applicable Indentureindenture described in this
Prospectusprospectus that do not apply to the Debt Securities;debt securities; and
(18)- any other specific terms of the Debt Securities not inconsistent with the provisions
of the Indentures (SECTIONdebt securities (Section 2.02).
The terms on which a series of Debt Securitiesdebt securities may be convertible into or
exchangeable for Common Stockcommon stock or other securities of the CompanyCitigroup will be set forth
in the Prospectus Supplementprospectus supplement relating thereto.to such series. Such terms will include
provisions as to whether conversion or exchange is mandatory, 8
at the option of
the holder or at the option of the Company, andCitigroup. The terms may include provisions
pursuant to which the number of shares of Common Stockcommon stock or other securities of
the CompanyCitigroup to be received by the holders of such series of Debt
Securities woulddebt securities may be
subject to adjustment.
Under the Indentures, the Company may authorize the issuance and establish
the terms of a series of Debt Securities pursuant to a supplemental indenture or
pursuant to a resolution of its Board of Directors, any duly authorized
committee of the Board or any committee of officers or other representatives of
the Company duly authorized by the Board of Directors for such purpose.adjusted.
The provisions of the Indentures described above provide the Company with the
ability, in addition to the ability to issue Debt Securities with terms
different from those of Debt Securities previously issued, to "reopen" a
previous issue of a series of Debt Securities and to issue additional Debt
Securities of such series.
The Debt Securitiesdebt securities will be issued only in registered form. Debt SecuritiesAs currently
anticipated, debt securities of a series maywill trade in book-entry form, and
global notes will be issuableissued in thephysical (paper) form, of one or more Global Securities, as described below under
"Global Securities."Book-Entry Procedures and Settlement." Unless otherwise provided in the
Prospectus Supplement accompanying this Prospectus, Debt Securitiesprospectus supplement, debt securities denominated in United States
dollars will be issued only in denominations of $1,000 and integralwhole multiples thereof (SECTIONof
$1,000 (Section 2.01). The Prospectus Supplementprospectus supplement relating to Offered Securitiesoffered securities
denominated in a foreign or composite currency will specify the denomination thereof.of
the offered securities.
The Debt Securitiesdebt securities may be presented for exchange, and Debt Securities
(otherdebt securities
other than a Global Security)global security may be presented for registration of transfer, at
the principal corporate trust office of the relevant Trustee in The City of New York. NoYork City.
Holders will not have to pay any service charge will be made for any registration of transfer
or exchange of Debt
Securities,debt securities, but the CompanyCitigroup may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. All Debt
Securities presented forwith such registration of transfer or exchange shall (if so
required by the Company or the Trustee) be duly endorsed by, or accompanied by a
written instrument or instruments of transfer (in form satisfactory to the
Company and the Trustee) duly executed by, the registered holder or his attorney
duly authorized in writing (SECTIONtransfer. (Section 2.05).
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any,Distributions on the Debt Securities (otherdebt securities other than a Global Security)those represented by global
notes will be made in the designated currency against surrender of such Debt Securitiesthe debt
securities at the principal corporate trust office of the Trusteerelevant trustee in
The City of New York. Unless otherwise indicated in the Prospectus
Supplement, payment of any installment of interest on SecuritiesYork City. Payment will be made to the person in whose name such Security is registered holder at the close of
business on the Record Daterecord date for such interest. Unless otherwise indicated in the Prospectus
Supplement,payment. Interest payments of such interest will be made at
the principal corporate trust office
11
15
of the Trusteerelevant trustee in The City of New York City, or by a check mailed to the holder at
such holder'shis registered address (SECTIONS(Sections 2.01 ANDand 5.02). GLOBAL SECURITIES
The Debt Securities of a series mayPayments in any other manner
will be issued in whole or in partspecified in the form of one or more Global Securities that will be deposited with, or on behalf
of, a depository identified in the Prospectus Supplement relating to such series
(SENIOR DEBT INDENTURE, SECTIONS 1.02 AND 2.01; SUBORDINATED DEBT INDENTURE,
SECTIONS 1.02 AND 2.02).
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to such
series. Unless otherwise indicated in any accompanying Prospectus Supplement,
the following provisions will apply to any depository arrangements.
Global Securities will be deposited with, or on behalf of, The Depository
Trust Company ("DTC") and registered in the name of DTC or its nominee. Except
as set forth below or in an accompanying
9
Prospectus Supplement, Global Securities may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any nominee to a successor of DTC or a nominee of
such successor.
DTC has advised the Company that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for persons that have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of certificates. DTC's participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations,
some of which (and/or their representatives) own DTC. Access to DTC's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. Persons who are not participants may
beneficially own interests in securities held by DTC only through participants.
Upon the issuance by the Company of a Global Security, DTC will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the securities represented by such Global Security to the accounts of
participants. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests in Global Securities will be shown on, and the
transfer of such interests will be effected only through, records maintained by
DTC or its nominee (with respect to beneficial interests of participants) or by
participants or persons that may hold interests through participants (with
respect to beneficial interests of indirect participants). The laws of some
states may require that certain purchasers of securities take physical delivery
of such securities in certificated form. Such limits and such laws may impair
the ability to transfer beneficial interests in Global Securities.
So long as DTC or its nominee is the registered owner of the Global
Securities, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the securities represented by such Global Securities for all
purposes under the Indenture. Except as provided in an accompanying Prospectus
Supplement, owners of beneficial interests in Global Securities will not be
entitled to have securities represented by such Global Securities registered in
their names, will not receive or be entitled to receive physical delivery of
such securities in certificated form and will not be considered the owners or
holders thereof under the Indenture.prospectus supplement.
SENIOR DEBT
The Debt Securities that will constitute part of the senior debt of the
Company (the "Senior Debt Securities")securities will be issued under the Senior Debt
Indenturesenior debt indenture
and will rank PARI PASSUon an equal basis with all other unsecured debt of the CompanyCitigroup
except subordinated debt.
Because the Company is a holding company, its rights and the rights of its
creditors, including the holders of Senior Debt Securities, to participate in
the assets of any subsidiary upon the latter's liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors, except to the
extent that the Company may itself be a creditor with recognized claims against
the subsidiary.
SUBORDINATED DEBT
The Debt Securities that will constitute part of the subordinated debt of
the Company ("Subordinated Debt Securities")securities will be issued under the Subordinated Debt Indenturesubordinated debt
indenture and will rank subordinated and junior in right of payment, to the
extent set forth in the Subordinated Debt Indenture,subordinated debt indenture, to all "Senior
Indebtedness" (as defined below) of the Company.
10
Citigroup.
If the Company shall defaultCitigroup defaults in the payment of any principal of, or premium, if
any, or interest on any Senior Indebtedness when the sameit becomes due and payable
after any applicable grace period, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise, then, unless and until suchthe default shall have beenis cured
or waived or shall have ceasedceases to exist, no direct
or indirectCitigroup cannot make a payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made on account of or
redeem or otherwise acquire the principal of, or premium,
if any, or interest on Subordinated Debt Securities, or in respect of any
redemption, retirement or other acquisition of any of the Subordinated Debt
Securities, except thatsubordinated debt securities. Nevertheless,
holders of Subordinated Debt Securitiessubordinated debt securities may still receive and retain (i)retain:
- securities of the CompanyCitigroup or any other corporation provided for by a plan
of reorganization or readjustment the payment of which isthat are subordinate, at least to the
same extent provided inthat the Subordinated Debt Indenture with respectsubordinated debt securities are subordinated to
the indebtedness evidenced by the Subordinated Debt Securities, to the payment
of all Senior Indebtedness at the time outstandingIndebtedness; and
to any securities issued
in respect thereof under any plan of reorganization or readjustment
("Reorganization Securities") and (ii)- payments made from a defeasance trust as set forthdescribed below.
In the event of (a)If there is any insolvency, bankruptcy, receivership,
liquidation reorganization, readjustment, composition or other similar
proceeding relating to the Company,Citigroup, its creditors or its property, (b) any
proceeding for the liquidation, dissolution or other winding-up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (c) any assignment by the Company for the benefit of creditors or
(d) any other marshalling of the assets of the Company,then all Senior
Indebtedness (including any interest thereon accruing after the commencement of any such
proceedings) shall firstmust be paid in full before any payment or distribution,
whether in cash, securities or other property, shallmay be made to any holders
of Subordinated Debt Securities (except as permittedsubordinated debt securities. Holders of subordinated debt securities must
return and deliver any payments received by the next succeeding
sentence). In such event, any paymentthem, other than in a plan of
reorganization or distribution under Subordinated Debt
Securities, whether in cash, securities or other property (other than (i)
Reorganization Securities and (ii) payments made fromthrough a defeasance trust created
pursuant to the Indenture), which would otherwise (but for the subordination
provisions) be payable or deliverable in respect of Subordinated Debt
Securities, shall be paid or deliveredas described below, directly to the
holders of Senior Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall have beenis paid in full.
If,
notwithstanding the foregoing, any payment or distribution under Subordinated
Debt Securities of any character, whether in cash, securities or other property
(other than (i) Reorganization Securities and (ii) payments made from a
defeasance trust created pursuant to the Subordinated Debt Indenture), shall be
received by the Trustee or any holder of any Subordinated Debt Securities in
contravention of any of the terms of the Subordinated(Subordinated Debt Indenture, such
payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding in accordance with the priorities
then existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings) shall
have been paid in full (SUBORDINATED DEBT INDENTURE, SECTIONSection 14.01).
"Senior Indebtedness" means (i)means:
(1) the principal, premium, if any, and interest in respect of (A)
indebtedness of the CompanyCitigroup for money borrowed and (B) indebtedness
evidenced by securities, notes, debentures, bonds or other similar
instruments issued by the Company,Citigroup, including the Senior Debt Securities; (ii)senior debt securities;
(2) all capital lease obligations of the Company; (iii)Citigroup;
(3) all obligations of the
CompanyCitigroup issued or assumed as the deferred purchase
price of property, all conditional sale obligations of the CompanyCitigroup and
all obligations of the CompanyCitigroup under any conditional sale or title
retention agreement, (butbut excluding trade accounts payable in the
ordinary course of business); (iv)business;
(4) all obligations contingent or otherwise, of the CompanyCitigroup in respect of any letters of credit,
bankers acceptance, security purchase facilities and similar credit
transactions;
(v)(5) all obligations of the CompanyCitigroup in respect of interest rate swap, cap or
other agreements, interest rate future or options contracts, currency
swap agreements, currency future or option contracts and other similar
agreements;
(vi)(6) all obligations of the type referred to in clauses (i)(1) through (v)(5) of
other persons for the payment of which the CompanyCitigroup is
11
responsible or
liable as obligor, guarantor or otherwise; and
(vii)(7) all obligations of the type referred to in clauses (i)(1) through (vi)(6) of
other persons secured by any lien on any property or asset of the Company (whetherCitigroup
whether or not such obligation is assumed by the Company), except for (1) Subordinated Debt
Securities, (2)Citigroup;
but Senior Indebtedness does not include:
(a) subordinated debt securities;
(b) any such indebtedness that is by its terms is subordinated to, or PARI PASSUranks on an
equal basis with, Subordinated Debt Securitiessubordinated debt securities; and
(3)12
16
(c) any indebtedness between or among the CompanyCitigroup and its affiliates,
including (x)(1) any Junior Subordinated Debt, (y)(2) any Capital Securities
Guarantees and (z)(3) all other debt securities and guarantees in respect
of those debt securities issued to any other trust, or a trustee of
such trust, partnership or other entity affiliated with the CompanyCitigroup which
is a financing vehicle of the Company (a "Financing Entity")Citigroup in connection with the issuance by
such Financing Entityfinancing vehicle of preferredcapital securities or other securities
guaranteed by the CompanyCitigroup pursuant to an instrument that ranks PARI
PASSUon an
equal basis with, or junior to, the Capital Securities Guarantees.
"Junior Subordinated Debt" means theCitigroup's:
- 6 7/8% Junior Subordinated Deferrable Interest Debentures due March 15,
2029;
- 7% Junior Subordinated Deferrable Interest Debentures due November 15,
2028 of the Company, the2028;
- 6.850% Junior Subordinated Deferrable Interest Debentures due January 22,
2038 of the Company,
the2038;
- 7 5/8% Junior Subordinated Deferrable Interest Debentures due December 1,
2036 of the Company, the2036;
- 7 3/4% Junior Subordinated Deferrable Interest Debentures due December 1,
2036 of the Company, the2036;
- 8% Deferrable Interest Debentures due September 30, 2036 of the Company, all2036;
- other notes or other obligations which may be issued under the Indenture,indenture,
dated as of October 7, 1996, between the CompanyCitigroup and The Chase Manhattan
Bank, as trustee,trustee; and
any- indebtedness that is by its terms subordinated to, or PARI PASSUranks on an equal
basis with, the Junior Subordinated Debt.
"Capital Securities Guarantees" means the guarantees issued by the CompanyCitigroup in
connection withwith:
- the 6 7/8% Capital Securities of Citigroup Capital VI;
- the 7% Trust Preferred Securities of Citigroup Capital V,V;
- the 6.850% Trust Preferred Securities of Citigroup Capital IV,IV;
- the 7 5/8% Trust Preferred Securities of Citigroup Capital III,III;
- the 7 3/4% Trust Preferred Securities of Citigroup Capital II,II;
- the 8% Trust Preferred Securities of Citigroup Capital I,I; and
- any guarantee nowexisting or hereafter entered into by the
Company in respect of anyfuture preferred or preference stock, (includingincluding capital
securities)securities, that is by its terms subordinated to, or PARI PASSUranks on an equal
basis with, the Junior Subordinated Debt.
Because the Company is a holding company, its rights and the rights of its
creditors, including the holders of Subordinated Debt Securities, to participate
in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary.
COVENANTS
LIMITATIONS ON LIENS.Limitations on Liens. The Senior Debt Indenturesenior debt indenture provides that the CompanyCitigroup
will not, and will not permit any Subsidiary to, incur, issue, assume or
guarantee any indebtedness for money borrowed if such indebtedness is secured by
a pledge of, lien on, or security interest in any shares of Voting Stock of any
Significant Subsidiary, (as defined below), whether such Voting Stock is now
owned or is hereafter acquired, without providing that each series of Debt
Securities issued under the Senior Debt Indenture (together with, if the Company
shall so determine,senior debt
securities and, at Citigroup's option, any other senior indebtedness or obligations of the Company or any
Subsidiary ranking
equally with such Debt Securities and then existing or
thereafter created) shall beseries of senior debt securities, is secured equally and
ratably with such indebtedness. The foregoingThis limitation shall not apply to indebtedness
secured by a pledge of, lien on or security interest in any shares of Voting
Stock of any corporation at the time it becomes a Significant Subsidiary (SENIOR DEBT INDENTURE, SECTION(Senior
Debt Indenture, Section 5.04). The Subordinated Debt Indenturesubordinated debt indenture does not contain
a similar provision.
"Significant Subsidiary" means a Subsidiary, including its Subsidiaries,
whichthat meets any of the following conditions:
(i) the Company's- Citigroup's and its other Subsidiaries' investments in and advances to
the Subsidiary exceed 10 percent of the total assets of the CompanyCitigroup and its
Subsidiaries consolidated as of the end of the most recently completed
fiscal year;
(ii) the Company's- Citigroup's and its other Subsidiaries'
12
proportionate share of the total
assets (after intercompany eliminations) of the Subsidiary after intercompany eliminations exceeds 10
percent of the total assets of the CompanyCitigroup and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
(iii) the Company's13
17
- Citigroup's and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of the CompanyCitigroup and its Subsidiaries
consolidated for the most recently completed fiscal year.
"Subsidiary" means any corporation of which securities entitled to elect at
least a majority of the corporation's directors shall at the time be owned,
directly or indirectly, by the Company, Citigroup, and/or one or more Subsidiaries, or by the
Company and one or more Subsidiaries.
"Voting Stock" means capital stock the holders of which have general voting
power under ordinary circumstances to elect at least a majority of the board of
directors of a corporation, provided that, for the purposes of such definition,except capital stock whichthat carries only the right to
vote conditioned on the happening of an event shall not be considered voting stockregardless of whether or not such event
shall have happened (SENIOR DEBT INDENTURE, SECTIONS 1.02 AND 5.04).
LIMITATIONS ON MERGERS AND SALES OF ASSETS. In each of the Senior(Senior Debt Indenture, Sections 1.02 and the Subordinated Debt Indenture, the Company has agreed5.04).
Limitations on Mergers and Sales of Assets. The indentures provide that
itCitigroup will not enter into a mergermerge or consolidationconsolidate with another corporation or sell other
than for cash or lease all or substantially all its assets to another
corporation, or purchase all or substantially all the assets of another
corporation unless (i)unless:
- either the Company(1) Citigroup is the continuing corporation, or (2) the successor
corporation, (ifif other than the Company)Citigroup, expressly assumes by supplemental
indenture the obligations evidenced by the securities issued pursuant to
the Indenture (in which case, except inindenture and
- immediately after the case of such a lease,
the Company will be discharged therefrom) and (ii) immediately thereafter, the
Company or the successor corporation (if other than the Company)transaction, there would not be inany default in the
performance of any covenant or condition of the indenture (Senior Debt
Indenture, (SENIOR
DEBT INDENTURE, SECTIONSSections 5.05 ANDand 14.01; SUBORDINATED DEBT INDENTURE, SECTIONSSubordinated Debt Indenture, Sections
5.04 ANDand 15.01).
Except toOther than the extentrestrictions described above, the Indenturesindentures do not contain
any covenants or provisions that would afford protection toprotect holders of the Debt
Securitiesdebt securities in
the event of a highly leveraged transaction.
MODIFICATION OF THE INDENTURES
The Indentures contain provisions permittingUnder the Companyindentures, Citigroup and the Trustee,
without the consent of the holders of the Debt Securities,relevant trustee can enter into
supplemental indentures to establish among
other things, the form and terms of any series of debt
securities issuable thereunder
by one or more supplemental indentures,without obtaining the consent of any holder of debt securities.
Citigroup and the trustee may, with the consent of the holders of not less thanat least
66 2/3% in aggregate principal amount of the Senior Debt
Securitiessenior debt securities of a series
or at the time outstanding which are affected thereby orleast a majority in aggregate principal amount of the Subordinated Debt Securities (at the time
outstanding) which are affected thereby, tosubordinated debt
securities, modify the applicable Indenture or
any supplemental indenture or the rights of the holders of the
securities of such series to be affected, provided that noaffected.
No such modification will,may, without the consent of the holder of each
Debt Security affected thereby, (i)security so affected:
- extend the fixed maturity of any such securities,
- reduce the rate or extend the time of payment of interest thereon,on such
securities,
- reduce the principal amount thereofof such securities or the premium, if any, thereon,on
such securities,
- reduce the amount of the principal of Original Issue Discount
Securities payable on any date,securities issued originally at
a discount,
- change the currency in which any such securities are payable, or
- impair the right to institute suitsue for the enforcement of any such payment on or
after the maturity thereof, without the consent of the holder
of each security so affected, or (ii)such securities.
In addition, no such modification may:
- reduce the aforesaid percentage of securities of any seriesreferred to above whose holders need
to consent to the consent of the holders of which is required for any
such modification without the consent of the holders of all securities of such series then outstanding,holders; or
(iii) modify,- change, without the written consent of the Trustee,trustee, the rights, duties or
immunities of the Trustee (SECTIONStrustee (Sections 13.01 ANDand 13.02).
1314
18
In addition, the Subordinated Debt Indenturesubordinated debt indenture may not be amended without the
consent of each holder of Subordinated Debt Securitiessubordinated debt securities affected thereby to
modify the subordination of the Subordinated Debt Securitiessubordinated debt securities issued thereunderunder that
indenture in a manner adverse to the holders of the Subordinatedsubordinated debt securities
(Subordinated Debt Securities.
(SUBORDINATED DEBT INDENTURE, SECTIONIndenture, Section 13.02).
DEFAULTS
Each Indentureindenture provides that events of default with respect toregarding any series of Debt Securitiesdebt
securities will be (i) defaultbe:
- failure to pay required interest on any debt security of such series for
30 days in payment of interest upon any
Debt Security of such series; (ii) default in payment ofdays;
- failure to pay principal, (otherother than a sinking fund installment)scheduled installment payment, or
premium, if any, on any Debt Securitydebt security of such series when due;
- failure to make any required scheduled installment payment for 30 days on
debt securities of such series;
(iii) default for 30 days in payment of any sinking fund installment
when due by the terms of the Debt Securities of such series; (iv) default,- failure to perform for 90 days after notice in performance of any other covenant in the
relevant Indenture (otherindenture other than a covenant included in the relevant
Indentureindenture solely for the benefit of a series of Debt Securitiesdebt securities other
than such series);series; and
(v)- certain events of bankruptcy or insolvency, (SECTIONwhether voluntary or not
(Section 6.01).
If an event of default with respect to Debt Securitiesregarding debt securities of any series issued under
the Indenturesindentures should occur and be continuing, either the Trusteetrustee or the holders
of 25% in the principal amount of outstanding Debt Securitiesdebt securities of such series may
declare each Debt Securitydebt security of that series due and payable (SECTION(Section 6.02).
The
CompanyCitigroup is required to file annually with the Trusteetrustee a statement of an
officer as to the fulfillment by the CompanyCitigroup of its obligations under the
Indentureindenture during the preceding year (SENIOR DEBT INDENTURE, SECTION(Senior Debt Indenture, Section 5.06;
SUBORDINATED
DEBT INDENTURE, SECTIONSubordinated Debt Indenture, Section 5.05).
No event of default with respect to a singleregarding one series of Debt Securitiesdebt securities issued under an
Indenture (and any supplemental indenture)indenture is necessarily
constitutes an event of default with respect toregarding any other series of Debt
Securities (SECTIONdebt
securities (Section 6.02).
Holders of a majority in principal amount of the outstanding Debt Securitiesdebt
securities of any series will be entitled to control certain actions of the
Trusteetrustee under the Indenturesindentures and to waive past defaults with respect toregarding such series
(SECTIONS(Sections 6.02 ANDand 6.06). Subject to the provisions of the Indentures relating to the
duties of the Trustee, the TrusteeThe trustee generally will not be under any obligation to exercise
any of the rightsrequested, ordered
or powers vested in itdirected by the respective Indentures at the
request, order or direction of any of the holders of Debt Securities,debt securities, unless one or more of such
holders of Debt Securities shall have offered to the Trusteetrustee reasonable security or indemnity
(SECTION(Section 10.01).
If an event of default occurs and is continuing with respect toregarding a series of Debt Securities,debt
securities, the trustee may use any sums held or received by the Trusteethat it holds under the relevant
Indenture may be applied to reimburse the Trusteeindenture for its own reasonable compensation and expenses incurred prior to
any payments topaying the holders of Debt
Securitiesdebt securities of such series (SECTION(Section 6.05).
The right ofBefore any holder of any series of Debt Securities todebt securities may institute action for
any remedy, (except such holder's right to enforceexcept payment of the principal
of, premium, if any, and interest on such holder's Debt Securitydebt security when due) will
be subject to certain conditions precedent, including a request to the Trustee
bydue, the holders
of not less than 25% in principal amount of the Debt Securitiesdebt securities of that series
outstanding must request the trustee to take action,action. Holders must also offer and
an offergive the satisfactory to the
Trustee of security and indemnity against liabilities incurred by it in so doing
(SECTIONthe
trustee for taking such action (Section 6.07).
DEFEASANCE
SENIOR DEBT INDENTURE. The Senior Debt Indenture provides that, ifIndenture. If so specified with respect towhen the Senior Debt Securitiessenior debt securities of
a particular series are created, after Citigroup has deposited with the Company (a)trustee
cash or government securities in trust for the benefit of the holders sufficient
to pay the principal of, premium, if any, and interest on the senior debt
securities of such series when due, then Citigroup, at its option:
- will be deemed to have paid and discharged the entire indebtednesssatisfied its obligations on all
outstanding Senior Debt Securitiessenior debt securities of such series, ("defeasancewhich is known as
"defeasance and discharge")discharge;" or
(b)15
19
- will cease to be under any obligation, (otherother than to pay when due the
principal of, premium, if any, and interest on such Senior Debt
Securities) with respectsenior debt
securities, relating to the Senior
14
Debt Securitiessenior debt securities of such series, ("which
is known as "covenant defeasance."
In the case of covenant defeasance"), at any time prior to
Maturity, when the Company has deposited with the Trustee, in trust for the
benefit of the holders (i) funds sufficient to pay all sums due for principal
of, premium, if any, and interest on the Senior Debt Securities of such series
as they shall become due from time to time, or (ii) such amount of direct
obligations of, or obligations the payment of which are unconditionally
guaranteed by the full faith and credit of, the United States of America, as
will or will together with the income thereon without consideration of any
reinvestment thereof be sufficient to pay all sums due for principal of,
premium, if any, and interest on the Senior Debt Securities of such series as
they shall become due from time to time. In additiondefeasance, Citigroup must also deliver to the
foregoing, covenant
defeasance, but not defeasance and discharge, is conditioned upon the Company's
delivery to the Trustee oftrustee an opinion of counsel to the effect that the holders of the Senior Debt Securitiessenior debt
securities of such series will have no federal income tax consequences as a
result of such deposit.
UponWhen there is a defeasance and discharge, (1) the Senior Debt Indenturesenior debt indenture
will cease to be of further effect with respect tono longer govern the Senior Debt Securitiessenior debt securities of such series, (2) Citigroup
will no longer be liable for payment and (3) the holders of such Senior Debt
Securities shall looksenior debt
securities will be entitled only to the deposited funds or obligations for payment.
Uponfunds. When there is a
covenant defeasance, however, the CompanyCitigroup will notcontinue to be relieved of its
obligationobligated to paymake
payments when due principal of, premium, if any, and interest on the
Senior Debt Securities of such series if not otherwise paid from such deposited funds or obligations. Notwithstanding the foregoing, certainare not sufficient.
The obligations and rights under the Senior Debt Indenture with respect tosenior debt indenture regarding
compensation, reimbursement and indemnification of the Trustee,trustee, optional
redemption, mandatory and optional sinking fundscheduled installment payments, if any,
registration of transfer and exchange of the Senior Debt Securitiessenior debt securities of such
series, replacement of mutilated, destroyed, lost or stolen Senior Debt Securitiessenior debt
securities and certain other administrative provisions will survivecontinue even if
Citigroup exercises its defeasance and discharge andor covenant defeasance (SENIOR DEBT INDENTURE, SECTIONSoptions
(Senior Debt Indenture, Sections 11.03 ANDand 11.04).
Under current federal income tax law, the defeasance and discharge contemplated in the preceding paragraph wouldshould
probably be treated as a taxable exchange of the Senior Debt Securitiessenior debt securities for an
interest in the trust. As a consequence, each holder of the Senior Debt Securitiessenior debt
securities would recognize gain or loss equal to the difference between the
value of the holder's interest in the trust and holder's tax basis for the
Senior Debt Securitiessenior debt securities deemed exchanged. Thereafter,
eachEach holder would then be required to
include in income his share of any income, gain and loss recognized by the
trust. Although a holder would be subject toEven though federal income tax on the deemed exchange ofwould be imposed on
a holder, the defeased Senior Debt Securities for an
interest in the trust, such holder would not receive any cash until the maturity (oror an earlier
redemption)redemption of such Senior Debt Securities (exceptthe senior debt securities, except for any current interest
payments, if any).payments.
Under current federal income tax law, a covenant defeasance would not be
treated as a taxable exchange of Senior Debt Securities.senior debt securities. Prospective investors
are urged to consult their own tax advisors as to the specific consequences of a
defeasance and discharge, including the applicability and effect of tax laws
other than the federal income tax law.
SUBORDINATED DEBT INDENTURE. The Company may discharge all of its
obligations (except those set forth in the Subordinated Debt Indenture) to
holders of Subordinated Debt Securities of a particular series, which
Subordinated Debt Securities have not already been delivered to the Trustee for
cancellation and which either have become due and payable or are by their terms
due and payable within one year (or are to be called for redemption within one
year), by depositing with the Trustee an amount certified to be sufficient to
pay when due the principal of (and premium, if any) and interest, if any, on all
outstanding Subordinated Debt Securities of such series and to make any
mandatory sinking fund payments thereon when due (SUBORDINATED DEBT INDENTURE,
SECTION 11.01).Indenture. The Company, at its option, (i) will be released from its obligations in
respect of the Subordinated Debt Securities of such series (except for certain
obligations to register the transfer or exchange of Subordinated Debt Securities
and to replace mutilated, defaced, destroyed, lost or stolen Subordinated Debt
Securities)("defeasance and discharge") or (ii) need not comply with certain
covenants with respect to the Subordinated Debt Securities, and the occurrence
of an event described under Events of Default with respect to any defeased
covenant and any such omission shall no longer be an Event of
15
Default ("covenant defeasance" and together with defeasance and discharge a
"defeasance") if,and covenant
defeasance provisions contained in either case, the Company irrevocably deposits withsubordinated debt indenture are
substantially the Trustee, in trust, cash or U.S. Government Obligations (or a combination
thereof) that, throughsame as those described above for the payment of interest thereonsenior debt indenture
(Subordinated Debt Indenture, Sections 11.01, 11.02, 11.03, 11.04 and principal thereof in
accordance with their terms will provide funds in an amount sufficient11.05).
Under the subordinated debt indenture, Citigroup must also deliver to pay
and discharge all the
principal of (and premium, if any) and any interest on the
Subordinated Debt Securities of such series on the dates such payments are due
in accordance with the terms of the Subordinated Debt Securities. Such a trust
may only be established if, among other things, the Company shall have deliveredtrustee an opinion of counsel (which, in the case of a defeasance and discharge, must be
based upon a ruling or administrative pronouncement of the IRS) to the effect that the holders of the Subordinated Debt Securitiessubordinated
debt securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance and discharge or covenant
defeasance and they will be subject tothat federal income tax would be imposed on the holders in the
same manner as if such defeasance and discharge had not occurred. In the event the Company omits to comply with its remaining
obligations under the Indenture aftercase of
a covenant defeasance with respect toand discharge, such opinion must be based upon a particular series of Subordinated Debt Securities and such Subordinated Debt
Securities are declared due and payable becauseruling or
administrative pronouncement of the occurrence of any
undefeased Event of Default, the amount of money and U.S. Government Obligations
on deposit with the Trustee may be insufficient to pay amounts due on the
Subordinated Debt Securities at the time of the acceleration resulting from such
Event of Default. However, the Company will remain liable in respect of such
payments (SUBORDINATED DEBT INDENTURE, SECTIONS 11.02, 11.03, 11.04 AND 11.05).IRS.
CONCERNING THE TRUSTEES
The CompanyCitigroup has had and may in the future from timecontinue to time have banking relationships with the
Trusteestrustees in the ordinary course of business.
16
20
DESCRIPTION OF INDEX WARRANTS
The following description ofbriefly summarizes the terms of the Index Warrants sets forth
certain generalmaterial terms and provisions of the
Index Warrants to which any
Prospectus Supplement may relate. Theindex warrants, other than pricing and related terms disclosed in the
accompanying prospectus supplement. You should read the particular terms of the
Index Warrantsindex warrants that are offered by Citigroup, which will be described in more
detail in a prospectus supplement. The prospectus supplement will also state
whether any Prospectus Supplement andof the extent, if any, to which such general provisions summarized below do not apply to the index
warrants being offered.
Index Warrants so offered will be
described in such Prospectus Supplement.
Index Warrantswarrants may be issued independently or together with Debt Securities
offered by any Prospectus Supplementdebt securities
and may be attached to or separate from any such Offered Securities.offered securities. Each series
of Index Warrantsindex warrants will be issued under a separate index warrant agreement (each, an "Index Warrant Agreement") to be
entered into between the CompanyCitigroup and a bank or trust company, as index warrant
agent
(the "Index Warrant Agent"), all as described in the Prospectus Supplement
relating to such Index Warrants.agent. A single bank or trust company may act as Index
Warrant Agentindex warrant agent for more
than one series of Index Warrants.index warrants. The Index Warrant
Agentindex warrant agent will act solely as
the agent of the CompanyCitigroup under the applicable Index
Warrant Agreementindex warrant agreement and will not
assume any obligation or relationship of agency or trust for or with any owners
of such Index Warrants.index warrants. A copy of the form of Index Warrant Agreement,index warrant agreement, including
the form of certificate or global certificate that will represent the index
warrant certificate, (the
"Index Warrant Certificate," or, if issued in global form, the "Index Warrant
Global Certificate"), iswill be filed as an exhibit to ora document incorporated by
reference in the Registration Statement. The following summariesregistration statement of certainwhich this prospectus forms a part.
You should read the more detailed provisions of the Index Warrantsindex warrant agreement and
the form of Index Warrant Agreement do not purportindex warrant certificate or index warrant global certificate for provisions
that may be important to be
complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Index Warrant Agreement and the Index Warrant
Certificate or Index Warrant Global Certificate.you.
GENERAL
The Index Warrant Agreementindex warrant agreement does not limit the number of Index Warrantsindex warrants
that may be issued thereunder. The Companyissued. Citigroup will have the right to "reopen" a previous series
of Index Warrants and to issueindex warrants by issuing additional Index Warrantsindex warrants of such series.
Each Index Warrantindex warrant will entitle the warrant holder (each, a "Warrant Holder") to receive from
the Company,Citigroup, upon exercise, including any automatic exercise, ancash or securities. The amount in cash or a number of
securities that will be determined by referencereferring to an index calculated by reference toon the basis
of prices, yields, levels or other specified objective measures in respect ofof:
- specified securities or securities indices orindices;
- specified foreign currencies or currency indices, orindices;
- a combination thereof,thereof; or
- changes in such measure or differences between two or more such measures.
The Prospectus Supplementprospectus supplement for a series of Index Warrantsindex warrants will set forthdescribe the
formula or methodology pursuant to whichbe applied to the relevant index or indices to
determine the amount payable or distributable on the Index Warrants will be determined by reference to the relevant index or indices.
Certain Index Warrants will, ifwarrants.
If so specified in the Prospectus Supplement,prospectus supplement, the index warrants will
entitle the Warrant Holderwarrant holder to receive from the Company,Citigroup a minimum or maximum amount
upon automatic exercise at expiration and under certain other circumstances, a minimum or maximum
amount.
The Prospectus Supplement applicable to any series of Index Warrants will
set forth any circumstances in which the payment or distribution or the determinationhappening of the payment or distribution on the Index Warrants may be
postponed and the period for which such payment or distribution or determination
may be postponed. Conversely, the Index Warrants may be subject to early
exercise or cancellation in certain circumstancesany other event
described in the applicable
Prospectus Supplement.prospectus supplement.
The amount due, or the means by which the amount due, on
the Index Warrants may be determined after any such delay or postponement, or
early exercise or cancellation will be set forth in the applicable Prospectus
Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company will be under no obligation to, nor will it, purchase or take delivery
of or sell or deliver any securities or currencies
17
(including the Underlying Assets (defined below)), other than the payment of any
cash or distribution of any securities due on the Index Warrants, from or to
Warrant Holders pursuant to the Index Warrants.
Unless otherwise specified in the applicable Prospectus Supplement, the
Index Warrantsindex warrants will be deemed to be automatically exercised upon
expiration. Upon such automatic exercise, Warrant Holderswarrant holders will be entitled to
receive the cash amount or number of securities due, if any, on such exercise of
the Index
Warrants.
Reference is hereby madeindex warrants.
You should read the prospectus supplement applicable to any series of index
warrants for any circumstances in which the payment or distribution or the
determination of the payment or distribution on the index warrants may be
postponed or exercised early or cancelled. The amount due after any such delay
or postponement, or early exercise or cancellation, will be described in the
applicable prospectus supplement.
Unless otherwise specified in the applicable prospectus supplement,
Citigroup will not purchase or take delivery of or sell or deliver any
securities or currencies, including the underlying assets, other than
17
21
the payment of any cash or distribution of any securities due on the index
warrants, from or to warrant holders pursuant to the Prospectus Supplementindex warrants.
The applicable prospectus supplement relating to the
particularany series of Index Warrants offered thereby forindex
warrants will describe the terms of such Index
Warrants, including, where applicable: (i)following:
- the aggregate number of such Index
Warrants; (ii)index warrants;
- the offering price of such Index Warrants; (iii)index warrants;
- the measure or measures by reference to which payment or distribution on such Index Warrantsindex
warrants will be determined;
(iv)- certain information regarding the underlying securities, foreign
currencies or indices;
(v)- the amount of cash or number of securities due, or the means by which the
amount of cash or number of securities due may be calculated, on exercise
of the Index Warrants,index warrants, including automatic exercise, or upon
cancellation;
(vi)- the date on which the Index Warrantsindex warrants may first be exercised and the date
on which they expire;
(vii)- any minimum number of Index Warrantsindex warrants exercisable at any one time;
(viii)- any maximum number of Index Warrantsindex warrants that may, subject to the Company'sat Citigroup's election,
be exercised by all Warrant Holders (orwarrant holders or by any person or entity)entity on any
day;
(ix)- any provisions permitting a Warrant Holderwarrant holder to condition an exercise of
Index Warrants; (x)index warrants;
- the method by which the Index Warrantsindex warrants may be exercised;
(xi)- the currency in which the Index Warrantsindex warrants will be denominated and in which
payments on the Index
Warrantsindex warrants will be made or the Securitiessecurities that may be
distributed in respect of the Index Warrants; (xii)index warrants;
- the method of making any foreign currency translation applicable to
payments or distributions on the Index Warrants; (xiii)index warrants;
- the method of providing for a substitute index or indices or otherwise
determining the amount payable in connection with the exercise of Index Warrantsindex
warrants if an index changes or is no longer available;
(xiv)- the time or times at which amounts will be payable or distributable in
respect of such Index Warrantsindex warrants following exercise or automatic exercise;
(xv)- any national securities exchange on, or self-regulatory organization with
which, such Index Warrantsindex warrants will be listed;
(xvi)- any provisions for issuing such Index Warrantsindex warrants in certificated form;
(xvii)- if such Index Warrantsindex warrants are not issued in book-entry form, the place or
places at and the procedures by which payments or distributions on the
Index
Warrantsindex warrants will be made; and
(xviii)- any other terms of such Index Warrants.index warrants.
Prospective purchasers of Index Warrantsindex warrants should be aware of special United
States federal income tax considerations applicable to instruments such as the
Index Warrants.index warrants. The Prospectus Supplementprospectus supplement relating to each series of Index
Warrantsindex
warrants will describe suchthese tax considerations. The summary of United States
federal income tax considerations contained in the Prospectus Supplementprospectus supplement will be
presented for informational purposes only, however, and will not be intended as
legal or tax advice to prospective purchasers. Prospective purchasers of Index
WarrantsYou are urged to consult their ownyour tax
advisors prior tobefore purchasing any acquisition of
Index Warrants.
BOOK-ENTRY PROCEDURES AND SETTLEMENT FOR INDEX WARRANTS
Subject to the rules of the Warrant Depositary (as defined below) and unless
otherwise specified in the Prospectus Supplement, the Index Warrants offered
thereby will be issued in the form of a single Index Warrant Global Certificate
that will be deposited with, or on behalf of, a depositary, The Depository Trust
Company ("DTC"), New York, New York ("Warrant Depositary") and registered in the
name of the Warrant Depositary or its nominee. Unless and until it is exchanged
in whole or in part for the individual Index Warrants represented thereby, an
Index Warrant Global Certificate may not be transferred except as a whole by the
Warrant Depositary to a nominee of the Warrant Depositary or by a nominee of the
Warrant Depositary to the Warrant Depositary or another nominee of the Warrantindex warrants.
18
Depositary or by the Warrant Depositary or any such nominee to a successor of
the Warrant Depositary or a nominee of such successor.
The Company anticipates that the following provisions will apply to all
depository arrangements.
Upon the issuance of an Index Warrant Global Certificate, the Warrant
Depositary will credit, on its book-entry registration and transfer system, the
respective numbers of the individual Index Warrants represented by such Index
Warrant Global Certificate to the accounts of participants. The accounts to be
credited shall be designated by the underwriters of such Index Warrants or, if
such Index Warrants are offered and sold directly by the Company or through one
or more agents, by the Company or such agent or agents. Ownership of beneficial
interests in an Index Warrant Global Certificate will be limited to participants
or persons that may hold beneficial interests through participants. Ownership of
beneficial interests in an Index Warrant Global Certificate will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the Warrant Depositary or its nominee (with respect to beneficial
interests of participants) or by participants or persons that may hold interests
through participants (with respect to beneficial interests of indirect
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in certificated form. Such
limits and such laws may impair the ability to transfer beneficial interests in
an Index Warrant Global Certificate.
So long as the Warrant Depositary or its nominee is the registered owner of
an Index Warrant Global Certificate, the Warrant Depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the Index
Warrants for all purposes under the related Index Warrant Agreement. Except as
set forth below, owners of beneficial interests in the Index Warrant Global
Certificate will not be entitled to have any of the individual Index Warrants
represented by such Index Warrant Global Certificate registered in their names,
will not receive or be entitled to receive physical delivery of any such Index
Warrants in certificated form, and will not be considered the holders thereof
under the related Index Warrant Agreement.
Neither the Company nor the Index Warrant Agent will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in the Index Warrant Global
Certificate or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
If the Warrant Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue individual Index Warrant Certificates in exchange
for the Index Warrant Global Certificate. In addition, the Company may at any
time and in its sole discretion determine not to have certain Index Warrants
represented by an Index Warrant Global Certificate and, in such event, will
issue individual Index Warrant Certificates in exchange for such Global
Certificate. Further, if the Company so specifies with respect to any Index
Warrants, an owner of a beneficial interest in an Index Warrant Global
Certificate may, on such terms acceptable to the Company and the Warrant
Depositary, receive individual Index Warrants in exchange for such beneficial
interest. In any such instance, an owner of a beneficial interest in the Index
Warrant Global Certificate will be entitled to have Index Warrants equal in
aggregate number to such beneficial interest registered in its name and will be
entitled to physical delivery of such Index Warrants. The registered owner of
such Index Warrants will be entitled to receive any amounts payable in respect
of such Index Warrants, upon surrender of such Index Warrants to the Index
Warrant Agent in accordance with the procedures set forth in the Prospectus
Supplement.22
LISTING
Unless otherwise indicated in the Prospectus Supplement,prospectus supplement, the Index Warrantsindex warrants
will be listed on a national securities exchange or with a self-regulatory
organization, the rules and regulations of which are filed with the Commission
pursuant to Section 19(b) of the Exchange Act (a "Self-Regulatory
19
Organization"), in each case as specified in the Prospectus Supplement.prospectus supplement. It is
expected that such Self-Regulatory Organizationorganization will ceasestop trading a series of Index Warrantsindex warrants as
of the close of business on the related expiration date of such Index Warrants.index warrants.
MODIFICATION
The Index Warrant Agreementindex warrant agreement and the terms of the related Index Warrantsindex warrants may
be amended by the CompanyCitigroup and the Index Warrant Agent,index warrant agent, without the consent of the
holders of any Index Warrants,index warrants, for any of the purpose offollowing purposes:
- curing any ambiguity or of curing, correcting or supplementing any defective
or inconsistent provision
contained therein,provision;
- maintaining the listing of such Index Warrantsindex warrants on any national securities
exchange or with any other Self-Regulatory Organization or
registration ofself-regulatory organization;
- registering such Index Warrantsindex warrants under the Exchange Act, permitting the
issuance of individual Index Warrantindex warrant certificates to Warrant Holders,warrant holders,
reflecting the issuance by the CompanyCitigroup of additional Index Warrantsindex warrants of the
same series or reflecting the appointment of a successor depository,depository; or
- for any other purpose which the CompanyCitigroup may deem necessary or desirable and
which will not materially and adversely affect the interests of the
Warrant Holders.
The Companywarrant holders.
Citigroup and the Index Warrant Agentindex warrant agent also may modify or amend the Index
Warrant Agreementindex
warrant agreement and the terms of the related Index Warrants,index warrants, with the consent
of the holders of not less than a majority in number of the then outstanding Warrantswarrants
affected by such modification or amendment, for any purposes; provided,
however, thatpurpose. However, no such
modification or amendment thatmay be made without the consent of each holder
affected thereby if such modification or amendment:
- changes the amount to be paid to the Warrant Holderwarrant holder or the manner in
which suchthat amount is to be determined,determined;
- shortens the period of time during which the Index Warrantsindex warrants may be
exercised, orexercised;
- otherwise materially and adversely affects the exercise rights of the
holders of the Index Warrantsindex warrants; or
- reduces the percentage of the number of outstanding Index Warrantsindex warrants the
consent of whose holders is required for modification or amendment of the
Index Warrant Agreementindex warrant agreement or the terms of the related Index Warrants, may be made without the consent of each Holder affected
thereby.index warrants.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION
If at any time there is a merger or consolidation involving the CompanyCitigroup or a
sale, transfer, conveyance, (otherother than by way of lease)lease, or other disposition of all or
substantially all of the assets of the Company,Citigroup, then the successor or assuming corporation will
succeed to and be substituted for the Companyobligations of Citigroup under the Index Warrant Agreementindex warrant agreement and
the related Index Warrants, with the same effect
as if it had been named in such Index Warrant Agreement and Index Warrants as
the Company. The Companyindex warrants. Citigroup will thereuponthen be relieved of any further
obligation under such Index Warrant Agreementthe index warrant agreement and Index Warrantsindex warrants and may at any time
thereafterthen be
dissolved, wound up or liquidated.
ENFORCEABILITY OF RIGHTS BY WARRANT HOLDERS
Any Warrant Holderwarrant holder may, without the consent of the Index Warrant Agentindex warrant agent or
any other Warrant Holder,warrant holder, enforce by appropriate legal action on his own behalf
his right to exercise, and to receive payment for, his Index Warrants.
SPECIAL CONSIDERATIONS RELATING TO INDEX WARRANTS
The Index Warrants involve a high degree of risk, including risks arising
from fluctuations in the values of the underlying securities, foreign currencies
or indexes, risks relating to the relevant index or indices by which payments or
distributions on the Index Warrants are calculated, general risks applicable to
the securities or currency markets on which the underlying securities, foreign
currencies or indices are traded and, in the case of certain Index Warrants,
foreign exchange, interest rate, issuer and other risks. Purchasers should
recognize that their Index Warrants, other than Index Warrants having a minimum
expiration value, may expire worthless. Purchasers should be prepared to sustain
a total loss
20warrants.
19
of the purchase price of their Index Warrants, and are advised to consider
carefully the information set forth herein and in the applicable Prospectus
Supplement. Prospective purchasers of the Index Warrants should be experienced
with respect to options and options transactions and understand the risks of the
relevant index or indices and the underlying securities, foreign currencies or
indices (and, if applicable, foreign currency transactions), and should reach an
investment decision only after careful consideration, with their advisers, of
the suitability of the Index Warrants in light of their particular financial
circumstances, the information set forth herein under "Description of Index
Warrants," and the information regarding the Index Warrants, the relevant index
or indices and the underlying securities, foreign currencies or indices set
forth in the Prospectus Supplement.
21
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain general terms of the
Company's Preferred Stock to which any Prospectus Supplement may relate. Certain
terms of any series of Preferred Stock offered by any Prospectus Supplement will
be described in the Prospectus Supplement relating thereto. If so indicated in
the Prospectus Supplement, the terms of any series may differ from the terms set
forth below. The description of certain provisions of the Company's Preferred
Stock does not purport to be complete and is subject to and qualified in its
entirety by reference to the provisions of the Company's Certificate of
Incorporation (as defined below) and the Certificate of Designation relating to
each particular series of Preferred Stock which will be filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement of
which this Prospectus forms a part at or prior to the time of the issuance of
such Preferred Stock. For a description of the Company's outstanding Preferred
Stock, see "Description of Capital Stock."
GENERAL
The Preferred Stock may be issued in one or more series, with such
designations of titles; dividend rates; any redemption provisions; special or
relative rights in the event of liquidation, dissolution, distribution or
winding up of the Company; any sinking fund provisions; any conversion or
exchange provisions; any voting rights thereof; and any other preferences,
privileges, powers, rights, qualifications, limitations and restrictions, as
shall be set forth as and when established by the Board of Directors of the
Company. The shares of any series of Preferred Stock will be, when issued, fully
paid and nonassessable and holders thereof will have no preemptive rights in
connection therewith.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of Preferred Stock will be specified in the
Prospectus Supplement relating thereto.
RANK
Unless otherwise specified in the Prospectus Supplement relating to the
shares of any series of Preferred Stock, such shares will rank on a parity with
each other series of Preferred Stock and prior to the Common Stock as to
dividends and distributions of assets.
DIVIDENDS
Holders of each series of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors of the Company out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of Preferred Stock.
Such rates may be fixed or variable or both. Dividends will be payable to
holders of record of Preferred Stock as they appear on the books of the Company
(or, if applicable, the records of the Depositary referred to below under
"Description of Depositary Shares") on such record dates as shall be fixed by
the Board of Directors. Dividends on any series of Preferred Stock may be
cumulative or noncumulative.
No full dividends may be declared or paid on funds set apart for the payment
of dividends on any series of Preferred Stock unless dividends shall have been
paid or set apart for such payment on equity securities ranking on a parity with
respect to dividends with such series of Preferred Stock. If full dividends are
not so paid, such series of Preferred Stock shall share dividends PRO RATA with
such other equity securities.
CONVERSION AND EXCHANGE
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into or
exchangeable for shares of the Company's Common Stock.
22
REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise upon terms and at
the redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of Preferred Stock, whether by mandatory
or optional redemption, the shares to be redeemed will be determined by lot or
PRO RATA, as may be determined by the Board of Directors of the Company, or by
any other method determined to be equitable by the Board of Directors.
On and after a redemption date, unless the Company defaults in the payment
of the redemption price, dividends will cease to accrue on shares of Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of each series of Preferred Stock will be entitled to
receive out of assets of the Company available for distribution to shareholders,
before any distribution is made on any securities ranking junior with respect to
liquidation, including Common Stock, distributions upon liquidation in the
amount set forth in the Prospectus Supplement relating to such series of
Preferred Stock, plus an amount equal to any accrued and unpaid dividends. If,
upon any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock of any series
and any other securities ranking on a parity with respect to liquidation rights
are not paid in full, the holders of the Preferred Stock of such series and such
other securities will share ratably in any such distribution of assets of the
Company in proportion to the full liquidation preferences to which each is
entitled. After payment of the full amount of the liquidation preference to
which they are entitled, the holders of such series of Preferred Stock will not
be entitled to any further participation in any distribution of assets of the
Company.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement or certificate of
designation relating to a particular series of Preferred Stock or except as
expressly required by applicable law, the holders of shares of Preferred Stock
will have no voting rights.
23
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of the date of this Prospectus, the Company'sprospectus, Citigroup's authorized capital stock
consists of 610 billion shares of Common Stockcommon stock and 30 million shares of Preferred
Stock.preferred
stock. The following summary contains a description of certain generalbriefly summarizes the material terms of Citigroup's common
stock and outstanding preferred stock. You should read the Company's Common Stock to which any Prospectus Supplement may relate. The
descriptions below of certainmore detailed
provisions of Citigroup's certificate of incorporation and the Company's Common Stock and
Preferred Stock do not purportcertificate of
designation relating to any series of preferred stock for provisions that may be
complete and are subjectimportant to and qualified
in their entirety by reference to the Certificate of Incorporation which is
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus forms a part.you.
COMMON STOCK
As of NovemberSeptember 30, 1998, the Company2000, Citigroup had outstanding approximately 2.34.5
billion shares of its Common Stock.common stock. Each holder of Common Stockcommon stock is entitled to
one vote per share for the election of directors and for all other matters to be
voted on by the Company'sCitigroup's stockholders. Except as otherwise provided by law, the
holders of shares of Common Stockcommon stock vote as one class together with holders of the
shares of Series I Preferred Stock, Series J Preferred Stock andthe outstanding Series K Preferred Stock, (as defined below).which is described below.
Holders of Common Stockcommon stock may not cumulate their votes in the election of
directors, and are entitled to share equally in suchthe dividends asthat may be
declared by the Boardboard of Directors out of funds legally available
therefor,directors, but only after payment of dividends required
to be paid on outstanding shares of Preferred Stock.preferred stock.
Upon voluntary or involuntary liquidation, dissolution or winding up of
the
Company,Citigroup, the holders of the Common Stockcommon stock share pro rataratably in the assets remaining
after payments to creditors and provision for the preference of any Preferred
Stock.preferred
stock. There are no preemptive or other subscription rights, conversion rights
or redemption or sinking fundscheduled installment payment provisions with respectrelating to shares of
Common Stock.common stock. All of the outstanding shares of Common Stockcommon stock are fully paid and
nonassessable. The transfer agent and registrar for the Common Stockcommon stock is
Citibank, N.A. The Common Stockcommon stock is listed on the New York Stock Exchange Inc. (the "NYSE") and Thethe
Pacific Exchange, Inc.Exchange.
PREFERRED STOCK
Under the Company's Restated CertificateThe general terms of Incorporation (as amended, the
"Certificate of Incorporation"), the Board of Directors of the Company is
authorized to issue shares of the Preferred Stock in one or more series, and to
establish from time to time the number of shares to be included in each such
series and to fix the designation, powers, preferences and rights of the shares
of each such series and the qualifications, limitations or restrictions thereof,
as will be stated and expressed in the resolution or resolutions providing for
the issue thereof adopted by the Board of Directors of the Company (except to
the extent stated and expressed in the Certificate of Incorporation). Prior to
the issuance of each seriesCitigroup's preferred stock are described below under
"Description of Preferred Stock, the Board of Directors of the
Company will adopt resolutions creating and designating such series as a series
of Preferred Stock and such resolutions will be filed in a Certificate of
Designation (a "Certificate of Designation") as an amendment to the Certificate
of Incorporation. As used herein the term "Board of Directors of the Company"
means the Board of Directors of the Company and includes any duly authorized
committee thereof.
The rights of holders of the Preferred Stock offered hereby will be subject
to, and may be adversely affected by, the rights of holders of any shares of
Preferred Stock that may be issued in the future. The Board of Directors may
cause shares of Preferred Stock to be issued in public or private transactions
for any proper corporate purpose, which may include issuance to obtain
additional financing in connection with acquisitions or otherwise, and issuance
to officers, directors and employees of the Company and its subsidiaries
pursuant to benefit plans or otherwise. Shares of Preferred Stock issued by the
Company may have the effect, under certain circumstances, alone or in
combination with
24
certain other provisions of the Certificate of Incorporation described below, of
rendering more difficult or discouraging an acquisition of the Company deemed
undesirable by the Board of Directors of the Company.
Under existing interpretations of The Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") and the Office of Thrift
Supervision (the "OTS"), if the holders of the Preferred Stock become entitled
to vote for the election of directors because dividends on the Preferred Stock
are in arrears as described below, Preferred Stock may then be deemed a "class
of voting securities" and a holder of 25% or more of the Preferred Stock (or a
holder of 5% or more of the Preferred Stock that otherwise exercises a
"controlling influence" over the Company) may then be subject to regulation as a
"bank holding company" in accordance with the Bank Holding Company Act (the "BHC
Act"), and a holder of 25% or more of the Preferred Stock (or a holder of 10% or
more of the Preferred Stock that otherwise possesses certain "control factors"
with respect to the Company) may then be subject to regulation as a "savings and
loan holding company" in accordance with the Home Owner's Loan Act of 1933, as
amended. In addition, at such time, (i) any bank holding company or foreign bank
with a U.S. presence generally would be required to obtain the approval of the
Federal Reserve Board under the BHC Act to acquire or retain 5% or more of the
Preferred Stock; (ii) any person other than a bank holding company may be
required to obtain the approval of the Federal Reserve Board and the OTS under
the Change in Bank Control Act to acquire or retain 10% or more of the Preferred
Stock; and (iii) any savings and loan holding company generally could not retain
in excess of 5% of the Preferred Stock. Before exercising its option to redeem
any shares of Preferred Stock, the Company will obtain the approval of the
Federal Reserve Board to the extent then required by applicable law.
No full dividends will be declared or paid or set apart for payment on the
preferred stock of any series ranking, as to dividends, on a parity with or
junior to any other series of Preferred Stock for any period unless full
dividends have been or are contemporaneously declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on such series
of Preferred Stock for (i) all dividend periods terminating on or prior to the
date of payment of such full cumulative dividends (in the case of a series of
cumulative preferred stock) or (ii) the immediately preceding dividend period
(in the case of a series of noncumulative preferred stock).
When dividends are not paid in full upon any series of Preferred Stock and
any other preferred stock ranking on a parity as to dividends with such series
of Preferred Stock, all dividends declared upon shares of such series of
Preferred Stock and any other preferred stock ranking on a parity as to
dividends will be declared pro rata so that the amount of dividends declared per
share on such series of Preferred Stock and such other preferred stock will in
all cases bear to each other the same ratio that accrued dividends per share
(which, in the case of noncumulative preferred stock, will not include any
cumulation in respect of unpaid dividends for prior dividend periods) on the
shares of such series of Preferred Stock and such other preferred stock bear to
each other. Except as provided in the preceding sentence, unless full dividends
on all outstanding shares of any such series of Preferred Stock have been
declared and paid or set apart for payment for all past dividend periods, in the
case of a series of cumulative preferred stock, or for the immediately preceding
dividend period, in the case of a series of noncumulative preferred stock, no
dividends (other than dividends or distributions paid in shares of, or options,
warrants or rights to subscribe for or purchase shares of, the Common Stock or
another stock of the Company ranking junior to the Preferred Stock as to
dividends and upon liquidation) will be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock of the Company ranking junior to or on parity with the Preferred
Stock as to dividends or upon liquidation, nor will any Common Stock nor any
other stock of the Company ranking junior to or on parity with such Preferred
Stock as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by the Company
25
(except by conversion into or exchange for stock of the Company ranking junior
to the Preferred Stock as to dividends and upon liquidation).
All shares of Preferred Stock will rank on a parity on liquidation and as to
dividends (except as otherwise provided with respect to cumulation of dividends)
with each other series. No shares of Preferred Stock have any preemptive or
subscription rights."
As of the date of this Prospectus, the Companyprospectus, Citigroup had outstanding 1,600,000
shares (evidenced by 8,000,000 depositary shares, eachthe following
series of which represents a
one-fifth interest in a share of such stock) of its 6.365% Cumulative Preferred
Stock, Series F ("Series F Preferred Stock"), 800,000 shares (evidenced by
4,000,000 depositary shares, each of which represents a one-fifth interest in a
share of such stock) of its 6.213% Cumulative Preferred Stock, Series G ("Series
G Preferred Stock"), 800,000 shares (evidenced by 4,000,000 depositary shares,
each of which represents a one-fifth interest in a share of such stock) of its
6.231% Cumulative Preferred Stock, Series H ("Series H Preferred Stock"),
140,000 shares of its Series I Cumulative Convertible Preferred Stock ("Series I
Preferred Stock"), 400,000 shares (evidenced by 8,000,000 depositary shares,
each of which represents a one-twentieth interest in a share of such stock) of
its 8.08% Cumulative Preferred Stock, Series J ("Series J Preferred Stock"),
500,000 shares (evidenced by 10,000,000 depositary shares, each of which
represents a one-twentieth interest in a share of such stock) of its 8.40%
Cumulative Preferred Stock, Series K ("Series K Preferred Stock"), 800,000
shares (evidenced by 4,000,000 depositary shares, each of which represents a
one-fifth interest in a share of such stock) of its 5.864% Cumulative Preferred
Stock, Series M ("Series M Preferred Stock"), 625,000 shares of its Graduated
Rate Cumulative Preferred Stock, Series O ("Series O Preferred Stock"), 700,000
shares of its Adjustable Rate Cumulative Preferred Stock, Series Q (the "Series
Q Preferred Stock"), 400,000 shares of its Adjustable Rate Cumulative Preferred
Stock, Series R (the "Series R Preferred Stock"), 500,000 shares of its 8.30%
Noncumulative Preferred Stock, Series S (the "Series S Preferred Stock"),
600,000 shares of its 8 1/2% Noncumulative Preferred Stock, Series T (the
"Series T Preferred Stock"), 500,000 shares of its 7 3/4% Cumulative Preferred
Stock, Series U (the "Series U Preferred Stock"), 250,000 shares of its Fixed
Adjustable Rate Cumulative Preferred Stock, Series V (the "Series V Preferred
Stock"), and 2,262 shares of its Cumulative Adjustable Rate Preferred Stock,
Series Y (the "Series Y Preferred Stock"), all of which shares are fully paid
and nonassessable.preferred stock with the following terms:
NUMBER REDEMPTION DATE NEXT
OF SHARES DIVIDENDS PRICE PER REDEEMABLE GENERAL
TITLE OF SERIES OUTSTANDING PER YEAR SHARE ($) BY CITIGROUP VOTING RIGHTS
- --------------- ----------- ---------------- ---------- --------------------- -------------
6.365% Cumulative Preferred
Stock, Series F........... 1,600,000 6.365% 250 June 16, 2007 No
6.213% Cumulative Preferred
Stock, Series G........... 800,000 6.213% 250 July 11, 2007 No
6.231% Cumulative Preferred
Stock, Series H........... 800,000 6.231% 250 September 8, 2007 No
8.40% Cumulative Preferred
Stock, Series K........... 500,000 $42.00 500 March 31, 2001 Yes (6)
9.50% Cumulative Preferred
Stock, Series L........... --(1) 9.50% 500 June 30, 2001 Yes (6)
5.864% Cumulative Preferred
Stock, Series M........... 800,000 5.864% 250 October 8, 2007 No
Adjustable Rate Cumulative
Preferred Stock, Series
Q......................... 700,000 Variable Rate(2) 250 On any date No
Adjustable Rate Cumulative
Preferred Stock, Series
R......................... 400,000 Variable Rate(2) 250 On any date No
shares of
20
24
NUMBER REDEMPTION DATE NEXT
OF SHARES DIVIDENDS PRICE PER REDEEMABLE GENERAL
TITLE OF SERIES OUTSTANDING PER YEAR SHARE ($) BY CITIGROUP VOTING RIGHTS
- --------------- ----------- ---------------- ---------- --------------------- -------------
7 3/4% Cumulative Preferred
Stock, Series U........... 500,000 7.75% 250 On any date No
Fixed Adjustable Rate
Cumulative Preferred
Stock, Series V........... 250,000 Variable Rate(3) 500 February 15, 2006(5) No
Cumulative Adjustable Rate
Preferred Stock, Series
Y......................... 2,262 Variable Rate(4) 100,000 On any payment date No
5.321% Cumulative Preferred
Stock, Series YY.......... 987 5.321% 1,000,000 December 22, 2018 No
Where the Company's 9.50% Cumulative Preferred Stock,
Series L ("Series L Preferred Stock") are outstanding as ofabove table indicates that the date hereof.
SERIES F PREFERRED STOCK. The Series F Preferred Stock is redeemable, in
whole or in part, at the Company's option at any time on or after June 16, 2007
at a redemption price equal to $250 per share, plus accrued and unpaid
dividends. The Series F Preferred Stock provides for cumulative quarterly
dividends at the rate of 6.365% per year, calculated as a percentage of the $250
per share liquidation value. The holders of the Series F Preferred Stockpreferred stock
have no general voting rights, this means that they do not vote on matters
submitted to a vote of the common stockholders. However, the holders of this
preferred stock do have other special voting rights except (i) as provided(1) that are required by
law, (ii) under certain
circumstances(2) that apply if six quarterlythere is a default in paying dividends are in arrears and (iii) that a
two-thirds vote of all shares of Preferred Stock then outstanding voting as a
class is required for the Companyequivalent
of six calendar quarters, in some cases whether or not consecutive and (3) when
Citigroup wants to (x) create any class of stock having a preference as to dividends
or distributions of assets over the Series F
Preferred Stocksuch series or (y) alter or change the provisions of
the Certificatecertificate of Incorporationincorporation so as to adversely affect the powers,
preferences or rights of the holders of Series F Preferred Stock. Depositary shares, each representing
one-fifth of a share of Series F Preferred Stock, are traded on the NYSE.
SERIES G PREFERRED STOCK. The Series G Preferred Stock is redeemable, in
whole or in part, at the Company's option at any time on or after July 11, 2007
at a redemption price equal to $250 per share, plus accrued and unpaid
dividends. The Series G Preferred Stock provides for cumulative quarterly
dividends at the rate of 6.213% per year, calculated as a percentage of the $250
per share liquidation value. The holders of the Series G Preferred Stock do not
havesuch series. These special voting rights
except (i) as provided by law, (ii) under certain
circumstances if six quarterly dividends are in arrears and (iii) that a
two-thirds vote of all shares of Preferred Stock then outstanding voting as a
class is required for the Company to
26
(x) create any class of stock having a preference as to dividends or
distributions of assets over the Series G Preferred Stock or (y) alter or change
the provisions of the Certificate of Incorporation so as to adversely affect the
powers, preferences or rights of the holders of Series G Preferred Stock.
Depositary shares, each representing one-fifth of a share of Series G Preferred
Stock, are traded on the NYSE.
SERIES H PREFERRED STOCK. The Series H Preferred Stock is redeemable, in
whole or in part, at the Company's option at any time on or after September 8,
2007 at a redemption price equal to $250 per share, plus accrued and unpaid
dividends. The Series H Preferred Stock provides for cumulative quarterly
dividends at the rate of 6.231% per year, calculated as a percentage of the $250
per share liquidation value. The holders of the Series H Preferred Stock do not
have voting rights except (i) as provided by law, (ii) under certain
circumstances if six quarterly dividends are in arrears and (iii) that a
two-thirds vote of all shares of Preferred Stock then outstanding voting as a
class is required for the Company to (x) create any class of stock having a
preference as to dividends or distributions of assets over the Series H
Preferred Stock or (y) alter or change the provisions of the Certificate of
Incorporation so as to adversely affect the powers, preferences or rights of the
holders of Series H Preferred Stock. Depositary shares, each representing
one-fifth of a share of Series H Preferred Stock, are traded on the NYSE.
SERIES I PREFERRED STOCK. The remaining 140,000 shares of Series I
Preferred Stock will be redeemed on October 31, 1999, by a cash payment of
$1,000 per share plus an amount per share equalapply to all accrued and unpaid
dividends, whether declared or undeclared, to the date of redemption. Any shares
of Series I Preferred Stock purchased, redeemed or otherwise acquired by the
Company and not previously credited against its mandatory redemption obligation
may be applied, on a pro rata basis to mandatory redemption payments to be made.
The Series I Preferred Stock provides for quarterly dividends in the amount of
$22.50 per share. On and after the redemption date, dividends will cease to
accrue, provided that the redemption price has been duly paid or provided for.
In addition to any voting rights provided in the Certificate of
Incorporation and any voting rights provided by law, the holders of shares of
Series I Preferred Stock are entitled to 44.60526 votes per share when voting as
a class with the Common Stock, subject to anti-dilution adjustment. The shares
of Series I Preferred Stock are entitled to vote together as a class with the
shares of Common Stock (and any other shares of capital stock of the Company at
the time entitled to vote together as a class) on all matters submitted to a
vote of stockholders of the Company. Holders of Series I Preferred Stock have
additional voting rights under certain circumstances if six quarterly dividends
are in arrears. In addition, holders of Series I Preferred Stock together with
all other series of Preferred Stock, voting as one class, must give their
approval by a two-thirds vote of shares of Preferred Stock then outstanding in
the event that the Company (i) authorizes shares of any class or series ofpreferred stock having a preference or priority as to dividends or liquidation ("Senior Stock")
over the Preferred Stock, (ii) reclassifies any shares of the Company stock into
shares of Senior Stock, (iii) authorizes any security exchangeable for,
convertible into, or evidencing the right to purchase any shares of Senior
Stock, (iv) amends, alters or repeals the Certificate of Incorporation to alter
or change the preferences, rights or powers of Preferred Stock so as to affect
the Preferred Stock adversely, or (v) effects the voluntary liquidation,
dissolution or winding up of the Company, or the sale, lease, exchange of all or
substantially all of the assets, property or business of the Company, or merges
or consolidates the Company with or into another corporation (except a wholly
owned subsidiary of the Company), provided that no separate vote of holders of
Preferred Stock as a class will be required in the case of a merger or
consolidation or a sale, exchange or conveyance of all or substantially all of
the assets, property or business of the Company (any such transaction, a
"transaction") if (A) the resulting, surviving or acquiring corporation will
have after such transaction no stock either authorized or outstanding (except
such stock of the Company as may have been authorized immediately preceding such
transaction, or such stock of the resulting, surviving or acquiring corporation
issued in exchange therefor) ranking prior to, or on a parity with, the
Preferred
27
Stock or the stock of the resulting, surviving or acquiring corporation and (B)
if each holder of shares of Preferred Stock immediately preceding such
transaction will receive in exchange therefor the same number of shares of
stock, with substantially the same preferences, rights and powers, of the
resulting, surviving or acquiring corporation (the events described in clauses
(i) through (v) being referred to herein as the "Preferred Stock Voting
Events"). Finally, without obtaining the approval of a majority of the
outstanding shares of Preferred Stock voting separately as a class, the Company
may not amend the Certificate of Incorporation to increase the authorized amount
of Preferred Stock or to authorize any other stock ranking on a parity with the
Preferred Stock either as to payment of dividends or upon liquidation.
Each share of Series I Preferred Stock is convertible (at the option of the
holder thereof) into 44.60526 shares of Common Stock, subject to anti-dilution
adjustment.
SERIES J PREFERRED STOCK. The Company, at its option, may redeem shares of
Series J Preferred Stock, as a whole or in part, at any time or from time to
time, at a price of $500 per share, plus an amount per share equal to all
accumulated but unpaid dividends thereon, whether or not declared, to the date
fixed for redemption. The Series J Preferred Stock provides for cumulative
quarterly dividends in the amount of $10.10 per share. Depositary shares, each
representing one-twentieth of a share of Series J Preferred Stock, are traded on
the NYSE.
Holders of shares of Series J Preferred Stock are entitled to vote together
as a class with the shares of Common Stock (and any other shares of capital
stock of the Company at the time entitled to vote together as a class) on all
matters submitted to a vote of stockholders of the Company, provided that, when
voting with Common Stock, each share of Series J Preferred Stock is entitled to
three votes. Holders of Series J Preferred Stock have additional voting rights
under certain circumstances if six quarterly dividends are in arrears. In
addition, holders of Series J Preferred Stock together with all other series of
Preferred Stock, voting as one class, must give their approval by a two-thirds
vote of the then outstanding shares of Preferred Stock upon the occurrence of a
Preferred Stock Voting Event. Finally, without obtaining the approval of a
majority of the outstanding shares of Preferred Stock voting separately as a
class, the Company may not amend the Certificate of Incorporation so as to
increase the authorized amount of Preferred Stock or so as to authorize any
other class of stock ranking on a parity with the Preferred Stock either as to
payment of dividends or upon liquidation.
SERIES K PREFERRED STOCK. The Series K Preferred Stock is redeemable, in
whole or in part, at the Company's option at any time on or after March 31,
2001, at a redemption price equal to $500 per share, plus accrued and unpaid
dividends. The Series K Preferred Stock provides for cumulative quarterly
dividends in the amount of $10.50 per share. Depositary shares, each
representing one-twentieth of a share of Series K Preferred Stock, are traded on
the NYSE.
Holders of shares of Series K Preferred Stock are entitled to vote together
as a class with the shares of Common Stock (and any other shares of capital
stock of the Company at the time entitled to vote together as a class) on all
matters submitted to a vote of stockholders of the Company, provided that, when
voting with Common Stock, each share of Series K Preferred Stock is entitled to
three votes. Holders of Series K Preferred Stock have voting rights under
certain circumstances if six quarterly dividends are in arrears. In addition,
holders of Series K Preferred Stock together with all other series of Preferred
Stock, voting as one class, must give their approval by a two-thirds vote of the
then outstanding shares of Preferred Stock upon the occurrence of a Preferred
Stock Voting Event. Finally, without obtaining the approval of a majority of the
outstanding shares of Preferred Stock voting separately as a class, the Company
may not amend the Certificate of Incorporation so as to increase the authorized
amount of Preferred Stock or so as to authorize any other class of stock ranking
on a parity with the Preferred Stock either as to payment of dividends or upon
liquidation.
28
SERIES L PREFERRED STOCK.listed above.
- ---------------
(1) The Series L Preferred Stock will be issuable upon the settlement of certain
purchase contracts issued as a component of the 9 1/2% Trust Preferred
Stock Units of SI Financing Trust I, a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"). Holders must settle the purchase contracts on June 30, 2021;
provided, however, that SSBH mayhas the option to accelerate settlement of the purchase contracts to June 30, 2001.
The Series L Preferred
Stock may not be redeemed prior to the later of June 30, 2001 and the date of
issuance of the Series L Preferred Stock, and will be redeemable on such date
and thereafter at SSBH's option at a redemption price equal to $500 per share
(the liquidation preference), plus accrued and unpaid dividends. The Series L
Preferred Stock will rank on a parity as to dividends and upon liquidation with
the outstanding series of Preferred Stock at the time of issuance. The Series L
Preferred Stock provides for cumulative quarterly dividends at the rate of 9.50%
per annum, calculated as a percentage of the $500 per share liquidation
preference. Holders of Series L Preferred Stock are entitled to three votes per
share when voting together as a class on all matters with the holders of the
Common Stock, the Series C Preferred Stock, the Series I Preferred Stock, the
Series J Preferred Stock and the Series K Preferred Stock. In addition, if six
quarterly dividends are in arrears the holders of the Series L Preferred Stock
will be entitled to certain additional voting rights. The vote of two-thirds of
all shares of Preferred Stock voting as a class will be required for the Company
to create any class of stock having a preference as to dividends or distribution
of assets over the Series L Preferred Stock.
SERIES M PREFERRED STOCK. The Series M Preferred Stock is redeemable, in
whole or in part, at the Company's option at any time on or after October 8,
2007 at a redemption price equal to $250 per share, plus an amount per share
equal to all accrued and unpaid dividends thereon, whether or not declared, to
the date fixed for redemption. The Series M Preferred Stock provides for
cumulative quarterly dividends at the rate of 5.864% per year, calculated as a
percentage of the $250 per share liquidation value. The holders of the Series M
Preferred Stock do not have voting rights except (i) as required by law, (ii)
under certain circumstances if six quarterly dividends are in arrears and (iii)
that a two-thirds vote of all shares of Preferred Stock then outstanding voting
as a class is required for the Company to (x) create any class of stock having a
preference as to dividends or distributions of assets over the Series M
Preferred Stock or (y) alter or change the provisions of the Certificate of
Incorporation so as to adversely affect the powers, preferences or rights of the
holders of Series M Preferred Stock. Depositary shares, each representing
one-fifth of a share of Series M Preferred Stock, are traded on the NYSE.
SERIES O PREFERRED STOCK. The Series O Preferred Stock is redeemable, in
whole or in part, at the Company's option, on August 15, 1999 and at any time
after August 15, 2004, at a redemption price equal to $100 per share, plus an
amount equal to all accrued and unpaid dividends thereon, whether or not
declared, to the date fixed for redemption. The Series O Preferred Stock may
also be redeemed as provided above and in certain other circumstances following
a Change in Tax Law (defined below), in each case at a redemption price equal to
$100 per share, plus an amount equal to accrued and unpaid dividends thereon,
whether or not declared, to the date fixed for redemption. The Series O
Preferred Stock provides for a cumulative dividend at a variable rate. For all
quarterly dividend periods ending on or prior to August 15, 1999, the annual
dividend rate is the Five-Year Treasury Rate (as defined in the Series O
Preferred Stock Certificate of Designation) plus 1.50%. After August 15, 1999
and on or prior to August 15, 2004, the annual dividend rate will be the
Five-Year Treasury Rate plus 2.25%. Prior to August 15, 2004, the above rates
may not be less than 7.00% nor greater than 14.00% per year, and after August
15, 2004, the rates may not be less than 8.00% nor greater than 16.00% per year.
The amount of dividends payable for each full dividend period for the Series O
Preferred Stock is computed by dividing the applicable dividend rate by four and
applying the dividend rate to the amount of $100.00 per share. The dividend rate
will be increased in the event of specified changes in the Internal Revenue Code
that would decrease the dividends received deduction applicable to corporate
stockholders (a "Change in Tax Law"). In the event of a liquidation, dissolution
or winding up of the Company, the holder of shares of the Series O Preferred
Stock will be entitled to receive $100 per
29
share plus accrued and unpaid dividends (whether or not earned or declared) and
such holder will not be entitled to any further payment. The holders of the
Series O Preferred Stock do not have voting rights except (i) as required by
law, (ii) under certain circumstances if dividends are in arrears for such
number of dividend periods, whether or not consecutive, which in the aggregate
contain not less than 540 days, and (iii) that a two-thirds vote of all shares
of Preferred Stock then outstanding voting as a class is required for the
Company to (x) create any class of stock having a preference as to dividends or
distributions of assets over the Series O Preferred Stock or (y) alter or change
the provisions of the Certificate of Incorporation so as to materially and
adversely affect the powers, preferences or rights of the holders of Series O
Preferred Stock.
SERIES Q PREFERRED STOCK. Except as provided below, the Series Q Preferred
Stock is redeemable, in whole or in part, at the Company's option at any time on
or after May 31, 1999 at a redemption price of $250 per share, plus an amount
per share equal to all accrued and unpaid dividends thereon, whether or not
declared, to the date fixed for redemption. The Series Q Preferred Stock
provides for a cumulative dividend at a variable rate.(2) For each dividend period the dividend rate will be equal to 84% of the
Effective Rate, (as defined below), but not less than 4.50% per year or more than 10.50% per
year. The "Effective Rate" for any dividend period will be equal to the
highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Thirty Year Constant Maturity Rate, (eacheach as defined in the Series Q Preferred Stock Certificate of
Designation) for such period. The amount of dividends payable for each full
dividend period for the Series Q Preferred Stock is computed by dividing the
dividend rate per year by four and applying the resulting rate to the amount of
$250 per share. In the event of a liquidation, dissolution or winding uprelevant
part of the Company, the holdercertificate of shares of Series Q Preferred Stock will be entitled to
receive $250 per share plus accrued and unpaid dividends (whether or not
declared) and such holder will not be entitled to any further payment. The
holders of the Series Q Preferred Stock do not have voting rights except (i) as
required by law, (ii) under certain circumstances if dividends are in arrears
for such number of dividend periods, whether or not consecutive, which in the
aggregate contain not less than 540 days, and (iii) that a two-thirds vote of
all shares of Preferred Stock then outstanding voting as a class is required for
the Company to (x) create any class of stock having a preference as to dividends
or distributions of assets over the Series Q Preferred Stock or (y) alter or
change the provisions of the Certificate of Incorporation so as to materially
and adversely affect the powers, preferences or rights of the holders of Series
Q Preferred Stock.
SERIES R PREFERRED STOCK. Except as provided below, the Series R Preferred
Stock is redeemable, in whole or in part, at the Company's option at any time on
or after August 31, 1999, at a redemption price of $250 per share, plus an
amount per share equal to all accrued and unpaid dividends thereon, whether or
not declared, to the date fixed for redemption. The Series R Preferred Stock
provides for a cumulative dividend at a variable rate. The dividend rate for the
Series R Preferred Stock is calculated in the same manner as the dividend rate
is calculated for the Series Q Preferred Stock described above. In the event of
any liquidation, dissolution or winding up of the Company, the holder of shares
of Series R Preferred Stock will be entitled to receive $250 per share plus
accrued and unpaid dividends (whether or not declared) and such holder will not
be entitled to any further payment. The holders of the Series R Preferred Stock
do not have voting rights except (i) as required by law, (ii) under certain
circumstances if dividends are in arrears for such number of dividend periods,
whether or not consecutive, which in the aggregate contain not less than 540
days, and (iii) that a two-thirds vote of all shares of Preferred Stock then
outstanding voting as a class is required for the Company to (x) create any
class of stock having a preference as to dividends or distributions of assets
over the Series R Preferred Stock or (y) alter or change the provisions of the
Certificate of Incorporation so as to materially and adversely affect the
powers, preferences or rights of the holders of Series R Preferred Stock.
SERIES S PREFERRED STOCK. Except as provided below, the Series S Preferred
Stock is redeemable, in whole or in part, at the Company's option at any time on
or after November 15, 1999, at a
30
redemption price of $250 per share, plus an amount per share equal to all
accrued and unpaid dividends thereon, whether or not declared, from the
immediately preceding dividend payment date (but without any cumulation for
unpaid dividends for prior dividend periods). The Series S Preferred Stock
provides for a noncumulative dividend in the amount of 8.30% per year. The
amount of dividends payable for each full dividend period for the Series S
Preferred Stock is computed by dividing the dividend rate of 8.30% per year by
four and applying the resulting rate of 2.075% to the amount of $250 per share.
In the event of a liquidation, dissolution or winding up of the Company, the
holder of shares of the Series S Preferred Stock will be entitled to receive
$250 per share plus accrued and unpaid dividends (whether or not declared) from
the immediately preceding dividend payment date (but without any cumulation for
unpaid dividends for prior dividend periods) and such holder will not be
entitled to any further payment. The holders of the Series S Preferred Stock do
not have any voting rights except (i) as required by law, (ii) under certain
circumstances if dividends are in arrears for such number of dividend periods,
whether or not consecutive, which in the aggregate contain not less than 540
days, and (iii) that a two-thirds vote of all shares of Preferred Stock then
outstanding voting as a class is required for the Company to (x) create any
class of stock having a preference as to dividends or distributions of assets
over the Series S Preferred Stock or (y) alter or change the provisions of the
Certificate of Incorporation so as to materially and adversely affect the
powers, preferences or rights of the holders of Series S Preferred Stock.
SERIES T PREFERRED STOCK. Except as provided below, the Series T Preferred
Stock is redeemable, in whole or in part, at the Company's option at any time on
or after February 15, 2000, at a redemption price of $250 per share, plus an
amount per share equal to all accrued and unpaid dividends, whether or not
declared, from the immediately preceding dividend payment date (but without any
cumulation for unpaid dividends for prior dividend periods). The Series T
Preferred Stock provides for a noncumulative dividend at a rate of 8.50% per
year. The amount of dividends payable for each full dividend period for the
Series T Preferred Stock is computed by dividing the dividend rate of 8.50% per
year by four and applying the resulting rate of 2.125% to the amount of $250 per
share. In the event of any liquidation, dissolution or winding up of the
Company, the holder of the shares of Series T Preferred Stock will be entitled
to receive $250 per share plus accrued and unpaid dividends (whether or not
declared) from the immediately preceding dividend payment date (but without any
cumulation for unpaid dividends for prior dividend periods) and such holder will
not be entitled to any further payment. The holders of the Series T Preferred
Stock do not have any voting rights except (i) as required by law, (ii) under
certain circumstances if dividends are in arrears for such number of dividend
periods, whether or not consecutive, which in the aggregate contain not less
than 540 days, and (iii) that a two-thirds vote of all shares of Preferred Stock
then outstanding voting as a class is required for the Company to (x) create any
class of stock having a preference as to dividends or distributions of assets
over the Series T Preferred Stock or (y) alter or change the provisions of the
Certificate of Incorporation so as to materially and adversely affect the
powers, preferences or rights of the holders of Series T Preferred Stock.
SERIES U PREFERRED STOCK. Except as provided below, the Series U Preferred
Stock is redeemable, in whole or in part, at the Company's option at any time on
or after May 15, 2000, at a redemption price of $250 per share, plus an amount
per share equal to all accrued and unpaid dividends, whether or not declared,
from the immediately preceding dividend payment date (but without any cumulation
for unpaid dividends for prior dividend periods). The Series U Preferred Stock
provides for a cumulative dividend at a rate of 7.75% per year. The amount of
dividends payable for each full dividend period for the Series U Preferred Stock
is computed by dividing the dividend rate of 7.75% per year by four and applying
the resulting rate of 1.9375% to the amount of $250 per share. In the event of
any liquidation, dissolution or winding up of the Company, the holder of shares
of the Series U Preferred Stock will be entitled to receive $250 per share plus
accrued and unpaid dividends (whether or not declared) and such holder will not
be entitled to any further payment. The holders of the Series U
31
Preferred Stock do not have any voting rights except (i) as required by law,
(ii) under certain circumstances if dividends are in arrears for such number of
dividend periods, whether or not consecutive, which in the aggregate contain not
less than 540 days, and (iii) that a two-thirds vote of all shares of Preferred
Stock then outstanding voting as a class is required for the Company to (x)
create any class of stock having a preference as to dividends or distributions
of assets over the Series U Preferred Stock or (y) alter or change the
provisions of the Certificate of Incorporation so as to materially and adversely
affect the powers, preferences or rights of the holders of Series U Preferred
Stock.
SERIES V PREFERRED STOCK. Except as provided below, the Series V Preferred
Stock is redeemable, in whole or in part, at the Company's option at any time on
or after February 15, 2006, at a redemption price of $500 per share, plus an
amount per share equal to all accrued and unpaid dividends, whether or not
declared, to the date fixed for redemption. Prior to February 15, 2006, in the
event of a Change of Tax Law, the Company at its option may redeem all, but not
less than all, of the Series V Preferred Stock at a price declining over time
from $525 per share to $500 per share.incorporation.
(3) The Series V Preferred Stock provides for a cumulative dividend at a rate
that changes over time. For each dividend period up to but not including
February 15, 2006, the dividend rate will be 5.86% per year. The amount of dividends payable for each full Dividend Period for Series V
Preferred Stock is computed by dividing the dividend rate of 5.86% per year by
four and applying the resulting rate of 1.465% to the amount of $500 per share.
For each
dividend period beginning on or after February 15, 2006, the dividend rate
on the shares of Series V Preferred Stock will be equal to 0.50% plus the Effective Rate, (as defined above under "Series Q Preferred Stock"), but not less than 6.00% or
more than 12.00%. The dividend rate will be increased in the event of
a Change in Tax Law. In the event of any liquidation, dissolution or winding
up of the Company, the holder of Series V Preferred Stock will be entitled to
receive $500 per share plus accrued and unpaid dividends thereon (whether or not
declared) and such holder will not be entitled to any further payment. The
holders of the Series V Preferred Stock do not have any voting rights except (i)
as required by law, (ii) under certain circumstances if dividends are in arrears
for such number of dividend periods, whether or not consecutive, whichspecified changes in the aggregate contain not less than 540 days, and (iii)Internal Revenue Code that a two-thirds vote of
all shares of Preferred Stock then outstanding voting as a class is required forwould decrease the
Companydividends received deduction applicable to (x) create any class of stock having a preference as to dividends
or distributions of assets over the Series V Preferred Stock so as to materially
and adversely affect the powers, preferences or rights of the holders of Series
V Preferred Stock.
SERIES Y PREFERRED STOCK. The Series Y Preferred Stock, all of which is
owned by subsidiaries of the Company, is redeemable without premium at the
Company's option on any dividend payment date at a redemption price of $100,000
per share, plus accrued and unpaid dividends thereon to the date fixed for
redemption, and is subject to repurchase at the holder's request on specified
dates at its liquidation value of $100,000 per share, plus accrued and unpaid
dividends, if not redeemed on or prior to March 31, 1999.corporate stockholders.
(4) The holders of the Series Y Preferred Stock are entitled to a cumulative
quarterly dividend at an annual rate equal to the greater of (i)(a) the Short
Term Rate (as defined below)
and (ii)(b) 4.85%. The "Short Term Rate" generally will be equal to
either 85% or 78% of the Money Market Yield, (asas defined in the Certificatecertificate
of Incorporation)incorporation, of the 90-day rate for commercial paper multiplied by the
stock's $100,000 per share liquidation value.
The holders(5) Prior to February 15, 2006, in the event of specified changes in the
Internal Revenue Code that would decrease the dividends received deduction
applicable to corporate stockholders, Citigroup at its option may redeem
all, but not less than all, of the Series YV Preferred Stock do not haveat a price
declining over time from $525 per share to $500 per share.
(6) Holders of shares of Series K and L Preferred Stock are entitled to three
votes per share, when voting rights except (i) as requireda class with the common stock, subject to
anti-dilution adjustment. In addition, holders of Series K Preferred Stock
together with all other series of preferred stock, voting as one class, must
give their approval by law, (ii) under certain circumstances if
six quarterly dividends are in arrears and (iii) that a two-thirds vote of all
shares of preferred stock then
outstanding to some types of liquidation, merger and asset sale
transactions. Finally, without obtaining the approval of a majority of the
outstanding shares of Series K Preferred Stock then outstanding voting separately as a class,
is required forCitigroup may not amend the Companycertificate of incorporation to (x) createincrease the
authorized amount of preferred stock or to authorize any class ofother stock havingranking
on a preferenceparity with the preferred stock either as to payment of dividends or
distributions of assets over the Series Y Preferred Stock or (y) alter or change
the provisions of the Certificate of Incorporation so as to adversely affect the
powers, preferences or rights of the holders of Series Y Preferred Stock.
32upon liquidation.
21
CERTAIN25
IMPORTANT PROVISIONS OF THE COMPANY'SCITIGROUP'S CERTIFICATE OF INCORPORATION AND BY-LAWS
BUSINESS COMBINATIONS.Business Combinations. The Certificatecertificate of Incorporationincorporation generally requires
the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the then outstanding shares of Voting Stock (as defined therein),voting stock, voting together as a
single class, excluding from such number of outstanding
shares and from such required vote Voting Stock beneficially owned by any
Interested Stockholder (defined therein, generally, as a 25% stockholder), to approve any merger or other Business Combination (as defined therein, which term
includes a merger, sale of $25,000,000 of assets, and similar extraordinary
corporate transactions)business combination between
or otherwise involving, the CompanyCitigroup and any Interested Stockholder,interested stockholder, unless (1) the transaction has been
approved by a majority of the Continuing Directors (as defined therein) in the manner described
therein,continuing directors of Citigroup or under some circumstances, unless certain(2) minimum
price, form of consideration and procedural requirements are satisfied. AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BY-LAWS. UnderAn
"interested stockholder" as defined in the certificate of incorporation
generally means a person who owns at least 25% of the voting stock of Citigroup.
Amendments to Certificate of Incorporation the alteration, amendment or repeal of, or
adoption of any provision inconsistent with the provisions of the Certificate of
Incorporation relating to the issuance of Preferred Stock or Common Stock
requires theand By-Laws. The affirmative
vote of the holders of at least 75% of the voting power of the shares entitled
to vote for the election of directors.directors is required to amend the provisions of the
certificate of incorporation relating to the issuance of preferred stock or
common stock. Amendments of provisions of the Certificatecertificate of Incorporationincorporation
relating to Business Combinationsbusiness combinations generally require a vote of the holders of
66 2/3% of the then outstanding shares of Voting Stock, excluding Voting Stock held by Interested Stockholders,voting stock, unless 75% of the Boardboard
of Directorsdirectors recommend such amendment and the directors comprising such 75%
would qualify as Continuing Directors.continuing directors. The Boardboard of Directors,directors, at any meeting,
may alter or amend the By-Lawsby-laws upon the affirmative vote of at least 66 2/3% of
the entire Boardboard of Directors.
VACANCIES.directors. A "continuing director" as defined in the
certificate of incorporation generally means a director who is not related to an
interested stockholder who held that position before an interested stockholder
became an interested stockholder.
Vacancies. Vacancies on the Boardboard of Directorsdirectors resulting from an increase
in the number of directors may be filled by a majority of the Boardboard of Directorsdirectors
then in office, provided thatso long as a quorum is present, and any additional director
elected to fill such a vacancy shall hold office for a term coinciding with the
remaining term of the class to which he was elected.present. Any other vacancies on the Boardboard
of Directorsdirectors may be filled by a majority of the directors then in office, even
if less than a quorum,quorum. Any director elected to fill a vacancy that did not
result from increasing the size of the board of directors shall hold office for
a term coinciding with the predecessor director's remaining term.
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26
DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes the material terms of Citigroup's
preferred stock, other than pricing and related terms disclosed in the
accompanying prospectus supplement. You should read the particular terms of any
series of preferred stock offered by Citigroup which will be described in more
detail in any prospectus supplement relating to such series, together with the
more detailed provisions of Citigroup's restated certificate of incorporation
and the director so elected shallcertificate of designation relating to each particular series of
preferred stock for provisions that may be important to you. The certificate of
incorporation, as amended, is incorporated by reference into the registration
statement of which this prospectus forms a part. The certificate of designation
relating to the particular series of preferred stock offered by the accompanying
prospectus supplement and this prospectus will be filed as an exhibit to a
document incorporated by reference in the registration statement. The prospectus
supplement will also state whether any of the terms summarized below do not
apply to the series of preferred stock being offered. For a description of
Citigroup's outstanding preferred stock, see "Description of Capital Stock."
Under Citigroup's certificate of incorporation, the board of directors of
Citigroup is authorized to issue shares of preferred stock in one or more
series, and to establish from time to time a series of preferred stock with the
following terms specified:
- the number of shares to be included in the series;
- the designation, powers, preferences and rights of the shares of the
series; and
- the qualifications, limitations or restrictions of such series.
Prior to the issuance of any series of preferred stock, the board of
directors of Citigroup will adopt resolutions creating and designating the
series as a series of preferred stock and the resolutions will be filed in a
certificate of designation as an amendment to the certificate of incorporation.
The term "board of directors of Citigroup" includes any duly authorized
committee.
The rights of holders of the preferred stock offered may be adversely
affected by the rights of holders of any shares of preferred stock that may be
issued in the future. The board of directors may cause shares of preferred stock
to be issued in public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to obtain additional
financing in connection with acquisitions or otherwise, and issuances to
officers, directors and employees of Citigroup and its subsidiaries pursuant to
benefit plans or otherwise. Shares of preferred stock issued by Citigroup may
have the effect of rendering more difficult or discouraging an acquisition of
Citigroup deemed undesirable by the board of directors of Citigroup.
Under existing interpretations of The Board of Governors of the Federal
Reserve System, if the holders of the preferred stock become entitled to vote
for the election of directors because dividends on the preferred stock are in
arrears as described below, preferred stock may then be deemed a "class of
voting securities" and a holder of 25% or more of the preferred stock or a
holder of 5% or more of the preferred stock that otherwise exercises a
"controlling influence" over Citigroup may then be regulated as a "bank holding
company" in accordance with the Bank Holding Company Act. In addition, at such
time:
- any bank holding company or foreign bank with a U.S. presence generally
would be required to obtain the approval of the Federal Reserve Board
under the BHC Act to acquire or retain 5% or more of the preferred stock;
and
- any person other than a bank holding company may be required to obtain
the approval of the Federal Reserve Board under the Change in Bank
Control Act to acquire or retain 10% or more of the preferred stock.
Before exercising its option to redeem any shares of preferred stock, Citigroup
will obtain the approval of the Federal Reserve Board if then required by
applicable law.
The preferred stock will be, when issued, fully paid and nonassessable.
Holders of preferred stock will not have any preemptive or subscription rights
to acquire more stock of Citigroup.
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27
The transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of preferred stock will be named in the
prospectus supplement relating to such series.
RANK
Unless otherwise specified in the prospectus supplement relating to the
shares of any series of preferred stock, such shares will rank on an equal basis
with each other series of preferred stock and prior to the common stock as to
dividends and distributions of assets.
DIVIDENDS
Holders of each series of preferred stock will be entitled to receive cash
dividends when, as and if declared by the board of directors of Citigroup out of
funds legally available for dividends. The rates and dates of payment of
dividends will be set forth in the prospectus supplement relating to each series
of preferred stock. Dividends will be payable to holders of record of preferred
stock as they appear on the books of Citigroup or, if applicable, the records of
the depositary referred to below under "Description of Depositary Shares," on
the record dates fixed by the board of directors. Dividends on any series of
preferred stock may be cumulative or noncumulative.
Citigroup may not declare, pay or set apart for payment dividends on the
preferred stock unless full dividends on other series of preferred stock that
rank on an equal or senior basis have been paid or sufficient funds have been
set apart for payment for
- all prior dividend periods of other series of preferred stock that pay
dividends on a cumulative basis; or
- the immediately preceding dividend period of other series of preferred
stock that pay dividends on a noncumulative basis.
Partial dividends declared on shares of preferred stock and any other
series of preferred stock ranking on an equal basis as to dividends will be
declared pro rata. A pro rata declaration means that the ratio of dividends
declared per share to accrued dividends per share will be the same remaining termfor both
series of preferred stock.
Similarly, Citigroup may not declare, pay or set apart for payment
non-stock dividends or make other payments on the common stock or any other
stock of Citigroup ranking junior to the preferred stock until full dividends on
the preferred stock have been paid or set apart for payment for
- all prior dividend periods if the preferred stock pays dividends on a
cumulative basis; or
- the immediately preceding dividend period if the preferred stock pays
dividends on a noncumulative basis.
CONVERSION AND EXCHANGE
The prospectus supplement for any series of preferred stock will state the
terms, if any, on which shares of that series are convertible into or
exchangeable for shares of Citigroup's common stock.
REDEMPTION
If so specified in the applicable prospectus supplement, a series of
preferred stock may be redeemable at any time, in whole or in part, at the
option of Citigroup or the holder thereof and may be mandatorily redeemed.
Any partial redemptions of preferred stock will be made in a way that the
board of directors decides is equitable.
24
28
Unless Citigroup defaults in the payment of the redemption price, dividends
will cease to accrue after the redemption date on shares of preferred stock
called for redemption and all rights of holders of such shares will terminate
except for the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Citigroup, holders of each series of preferred stock will be entitled to receive
distributions upon liquidation in the amount set forth in the prospectus
supplement relating to such series of preferred stock, plus an amount equal to
any accrued and unpaid dividends. Such distributions will be made before any
distribution is made on any securities ranking junior relating to liquidation,
including common stock.
If the liquidation amounts payable relating to the preferred stock of any
series and any other securities ranking on a parity regarding liquidation rights
are not paid in full, the holders of the preferred stock of such series and such
other securities will share in any such distribution of available assets of
Citigroup on a ratable basis in proportion to the full liquidation preferences.
Holders of such series of preferred stock will not be entitled to any other
amounts from Citigroup after they have received their full liquidation
preference.
VOTING RIGHTS
The holders of shares of preferred stock will have no voting rights,
except:
- as thatotherwise stated in the prospectus supplement;
- as otherwise stated in the certificate of his predecessor.
33designation establishing such
series; or
- as required by applicable law.
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29
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below of certainfollowing briefly summarizes the material provisions of the Deposit Agreement (as defined below)deposit
agreement and of the Depositary Sharesdepositary shares and Depositary
Receipts (as defined below) is subject todepositary receipts, other than
pricing and qualifiedrelated terms disclosed in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipt relating toaccompanying prospectus supplement.
You should read the Preferred Stock, which are incorporated by reference as exhibits to the
Registration Statement of which this Prospectus forms a part at or prior to the
issuance of Depositary Shares. The particular terms of any Depositary Shares,
any Depositary Receiptsdepositary shares and any Deposit Agreementdepositary
receipts that are offered by Citigroup and any deposit agreement relating to a
particular series of Preferred Stockpreferred stock which vary from the terms set forth below will be set
forthdescribed in more detail in a
prospectus supplement. The prospectus supplement will also state whether any of
the generalized provisions summarized below do not apply to the depositary
shares or depositary receipts being offered. A copy of the form of deposit
agreement, including the form of depositary receipt, is incorporated by
reference as an exhibit in the applicable Prospectus Supplement.registration statement of which this prospectus
forms a part. You should read the more detailed provisions of the deposit
agreement and the form of depositary receipt for provisions that may be
important to you.
GENERAL
The CompanyCitigroup may, at its option, elect to offer fractional shares of Preferred Stock,preferred
stock, rather than full shares of Preferred Stock.preferred stock. In such event, the
CompanyCitigroup will
issue receipts for Depositary Shares,depositary shares, each of which will represent a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock) of
a share of a particular series of Preferred Stock as described below.preferred stock.
The shares of any series of Preferred Stockpreferred stock represented by Depositary Sharesdepositary
shares will be deposited under a Deposit Agreement (the "Deposit Agreement")deposit agreement between the CompanyCitigroup and a bank
or trust company selected by the CompanyCitigroup having its principal office in the United
States and having a combined capital and surplus of at least $50,000,000, (the "Preferred Stock Depositary"). Subject to the terms
of the Deposit Agreement, eachas
preferred stock depositary. Each owner of a Depositary Sharedepositary share will be entitled to
all the rights and preferences of the underlying preferred stock, including
dividend, voting, redemption, conversion and liquidation rights, in proportion
to the applicable fraction of a share of Preferred Stockpreferred stock represented by such
Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion
and liquidation rights).depositary share.
The Depositary Sharesdepositary shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts").deposit agreement. Depositary Receiptsreceipts will be distributed to
those persons purchasing the fractional shares of Preferred Stockpreferred stock in accordance
with the terms of the applicable Prospectus
Supplement.
Pending the preparation of definitive Depositary Receipts, the Preferred
Stock Depositary may, upon the written order of the Company or any holder of
deposited Preferred Stock, execute and deliver temporary Depositary Receipts
which are substantially identical to, and entitle the holders thereof to all the
rights pertaining to, the definitive Depositary Receipts. Depositary Receipts
will be prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts.prospectus supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositarypreferred stock depositary will distribute all cash dividends or other
cash distributions received in respect of the deposited Preferred Stockpreferred stock to the
record holders of Depositary Sharesdepositary shares relating to such Preferred Stockpreferred stock in
proportion to the number of such Depositary Sharesdepositary shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
DepositaryThe preferred stock depositary will distribute any property received by it
other than cash to the record holders of Depositary Sharesdepositary shares entitled thereto. If
the Preferred Stock Depositarypreferred stock depositary determines that it is not feasible to make such
distribution, it may, with the approval of the Company,Citigroup, sell such property and
distribute the net proceeds from such sale to such holders.
REDEMPTION OF PREFERRED STOCK
If a series of Preferred Stockpreferred stock represented by Depositary Sharesdepositary shares is to be
redeemed, the Depositary Sharesdepositary shares will be redeemed from the proceeds received by
the Preferred Stock Depositarypreferred stock depositary resulting from the redemption, in whole or in
part, of such series of Preferred Stock held by the Preferred Stock
34
Depositary.preferred stock. The Depositary Sharesdepositary shares will be redeemed
by the Preferred Stock
Depositarypreferred stock depositary at a price per Depositary Sharedepositary share equal to the
applicable fraction of the redemption price per share payable in respect of the
shares of Preferred
Stockpreferred stock so redeemed.
Whenever the CompanyCitigroup redeems shares of Preferred Stockpreferred stock held by the Preferred Stock Depositary,preferred
stock depositary, the Preferred Stock Depositarypreferred stock depositary will redeem as of the same date
the number of Depositary Sharesdepositary shares representing shares of Preferred Stockpreferred stock so
redeemed. If fewer than all the Depositary Sharesdepositary shares are to be redeemed, the
Depositary Sharesdepositary shares to be redeemed will be selected by the Preferred
Stock Depositarypreferred stock
depositary by lot or PRO RATAratably or by any other equitable method as the preferred
stock depositary may be
determined by the Preferred Stock Depositary.decide.
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30
WITHDRAWAL OF PREFERRED STOCK
Any holder of Depositary Shares may, upon surrender of the Depositary
Receipts at the corporate trust office of the Preferred Stock Depositary (unlessUnless the related Depositary Sharesdepositary shares have previously been called for
redemption),redemption, any holder of depositary shares may receive the number of whole
shares of the related series of Preferred Stockpreferred stock and any money or other property
represented by such Depositary Receipts.depositary receipts after surrendering the depositary
receipts at the corporate trust office of the preferred stock depositary.
Holders of Depositary Sharesdepositary shares making such withdrawals will be entitled to receive
whole shares of Preferred Stockpreferred stock on the basis set forth in the related Prospectus
Supplementprospectus
supplement for such series of Preferred Stock, butpreferred stock.
However, holders of such whole shares of Preferred Stockpreferred stock will not thereafter be
entitled to deposit such Preferred
Stockpreferred stock under the Deposit Agreementdeposit agreement or to
receive Depositary Receipts therefor.depositary receipts for such preferred stock after such withdrawal. If
the Depositary Sharesdepositary shares surrendered by the holder in connection with such
withdrawal exceed the number of Depositary Sharesdepositary shares that represent the number of
whole shares of Preferred Stockpreferred stock to be withdrawn, the Preferred Stock Depositarypreferred stock depositary
will deliver to such holder at the same time a new Depositary Receiptdepositary receipt evidencing
such excess number of Depositary Shares.depositary shares.
VOTING DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
deposited Preferred Stockpreferred stock are entitled to vote, the Preferred Stock Depositarypreferred stock depositary
will mail the information contained in such notice of meeting to the record
holders of the Depositary Sharesdepositary shares relating to such series of Preferred Stock.preferred stock.
Each record holder of such Depositary Sharesdepositary shares on the record date (which will be
the same date as the record date for the relevant series of Preferred Stock) will be entitled
to instruct the Preferred Stock Depositary aspreferred stock depositary to the exercise
of the voting rights pertaining tovote the amount of the Preferred Stockpreferred
stock represented by such holder's Depositary Shares.depositary shares. The Preferred Stock Depositarypreferred stock
depositary will endeavor, insofar as practicable,try to vote the amount of such series of Preferred
Stockpreferred stock
represented by such Depositary Sharesdepositary shares in accordance with such instructions, and the Companyinstructions.
Citigroup will agree to take all reasonable actions that may
be deemedthe preferred
stock depositary determines as necessary by the Preferred Stock Depositary in order to enable the Preferred Stock Depositarypreferred stock
depositary to do so.vote as instructed. The Preferred Stock Depositarypreferred stock depositary will vote all
shares of any series of Preferred Stockpreferred stock held by it proportionately with
instructions received to the extentif it does not receive specific instructions from the
holders of Depositary Sharesdepositary shares representing such series of Preferred
Stock.preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receiptdepositary receipt evidencing the Depositary Sharesdepositary shares and any
provision of the Deposit Agreementdeposit agreement may at any time be amended by agreement
between the CompanyCitigroup and the Preferred Stock Depositary.preferred stock depositary. However, any amendment
that imposes additional charges or materially and adversely alters any
substantial existing right of the holders of Depositary Sharesdepositary shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the affected Depositary Sharesdepositary shares then outstanding. Every holder of an
outstanding Depositary Receiptdepositary receipt at the time any such amendment becomes effective,
or any transferee of such holder, shall be deemed, by continuing to hold such
Depositary Receipt,depositary receipt, or by reason of the acquisition thereof, to consent and
agree to such amendment and to be bound by the Deposit Agreement asdeposit agreement, which has been
amended thereby. The Deposit Agreementdeposit agreement automatically terminates if (i)if:
- all outstanding Depositary Sharesdepositary shares have been redeemed;
or (ii)- each share 35
of Preferred Stockpreferred stock has been converted into or exchanged for
Common Stock;common stock; or
(iii) there has been- a final distribution in respect of the Preferred Stockpreferred stock has been made to
the holders of depositary shares in connection with any liquidation,
dissolution or winding up of the Company and
such distribution has been distributed to the holders of Depositary Shares.Citigroup.
The Deposit Agreementdeposit agreement may be terminated by the CompanyCitigroup at any time and the
Preferred
Stock Depositarypreferred stock depositary will providegive notice of such termination to the record
holders of all outstanding Depositary Receiptsdepositary receipts not less than 30 days prior to
the termination date, in whichdate. In such event, the Preferred Stock Depositarypreferred stock depositary will deliver
or make available for delivery to holders of Depositary Shares,depositary shares, upon surrender
of such Depositary Shares,depositary shares, the number of whole or fractional shares of the
related series of Preferred Stockpreferred stock as are represented by such Depositary Shares.depositary shares.
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31
CHARGES OF PREFERRED STOCK DEPOSITARY; TAXES AND OTHER GOVERNMENTAL CHARGES
No fees, charges and expenses of the Preferred Stock Depositarypreferred stock depositary or any
agent of the Preferred Stock Depositarypreferred stock depositary or of any registrar shall be payable by
any person other than the Company,Citigroup, except for any taxes and other governmental
charges and except as provided in the Deposit Agreement.deposit agreement. If the Preferred Stock
Depositarypreferred stock
depositary incurs fees, charges or expenses for which it is not otherwise liable
hereunder at the election of a holder of a Depositary Receiptdepositary receipt or other person,
such holder or other person will be liable for such fees, charges and expenses.
All other fees, charges, and expenses of the Preferred Stock Depositary and any
agent of the Preferred Stock Depositary under the Deposit Agreement and of any
registrar (including, in each case, fees and expenses of counsel) incident to
the performance of their respective obligations hereunder will be paid from time
to time upon consultation and agreement between the Preferred Stock Depositary
and the Company as to the amount and nature of such fees, charges and expenses.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositarypreferred stock depositary may resign at any time by delivering to
the
CompanyCitigroup notice of its intent to do so, and the CompanyCitigroup may at any time remove
the Preferred Stock Depositary,preferred stock depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositarypreferred stock depositary and its
acceptance of such appointment. Such successor Preferred Stock Depositarypreferred stock depositary must
be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositarypreferred stock depositary will forward all reports and communications
from the CompanyCitigroup which are delivered to the Preferred Stock Depositarypreferred stock depositary and which
the CompanyCitigroup is required to furnish to the holders of the deposited Preferred
Stock.preferred
stock.
Neither the Preferred Stock Depositarypreferred stock depositary nor the CompanyCitigroup will be liable if it
is prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the Deposit Agreement.deposit agreement. The obligations of
the
CompanyCitigroup and the Preferred Stock Depositarypreferred stock depositary under the Deposit Agreementdeposit agreement will be
limited to performance in good faithwith honest intentions of their duties thereunder and
they will not be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Shares, Depositary Receiptsdepositary shares, depositary receipts or shares of Preferred Stockpreferred
stock unless satisfactory indemnity is furnished. The CompanyCitigroup and the Preferred Stock
Depositarypreferred
stock depositary may rely upon written advice of counsel or accountants, or upon
information provided by holders of Depositary Receiptsdepositary receipts or other persons believed
to be competent and on documents believed to be genuine.
3628
32
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Most series of debt securities and index warrants will be book-entry
securities. Upon issuance, all book-entry securities of the same issue will be
represented by one or more fully registered global securities, without interest
coupons. Each global security will be deposited with, or on behalf of, The
Depository Trust Company, a securities depository, and will be registered in the
name of DTC or a nominee of DTC. DTC will thus be the only registered holder of
these debt securities or index warrants and will be considered the sole owner of
the securities for purposes of the indenture or index warrant agreement.
Purchasers may only hold interests in the global notes or index warrants
through DTC if they are a participant in the DTC system. Purchasers may also
hold interests through a securities intermediary -- banks, brokerage houses and
other institutions that maintain securities accounts for customers -- that has
an account with DTC or its nominee. DTC will maintain accounts showing the
securities holdings of its participants, and these participants will in turn
maintain accounts showing the securities holdings of their customers. Some of
these customers may themselves be securities intermediaries holding debt
securities or index warrants for their customers. Thus, each beneficial owner of
a book-entry security will hold that security indirectly through a hierarchy of
intermediaries, with DTC at the "top" and the beneficial owner's own securities
intermediary at the "bottom."
The securities of each beneficial owner of a book-entry security will be
evidenced solely by entries on the books of the beneficial owner's securities
intermediary. The actual purchaser of the securities will generally not be
entitled to have the securities represented by the global securities registered
in its name and will not be considered the owner under the indenture or index
warrant agreement. In most cases, a beneficial owner will also not be able to
obtain a paper certificate evidencing the holder's ownership of securities. The
book-entry system for holding securities eliminates the need for physical
movement of certificates and is the system through which most publicly traded
common stock is held in the United States. However, the laws of some
jurisdictions require some purchasers of securities to take physical delivery of
their securities in definitive form. These laws may impair the ability to
transfer book-entry securities.
A beneficial owner of book-entry securities represented by a global
security may exchange the securities for definitive (paper) securities only if:
(a) DTC is unwilling or unable to continue as depositary for such global
security and Citigroup is unable to find a qualified replacement for
DTC within 90 days;
(b) at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934; or
(c) Citigroup in its sole discretion decides to allow some or all
book-entry securities to be exchangeable for definitive securities in
registered form.
Unless we indicate otherwise in the applicable prospectus supplement, any
global security that is exchangeable will be exchangeable in whole for
definitive securities in registered form, with the same terms and of an equal
aggregate principal amount, in denominations of $1,000 and whole multiples of
$1,000. Definitive notes or index warrants will be registered in the name or
names of the person or persons specified by DTC in a written instruction to the
registrar of the securities. DTC may base its written instruction upon
directions it receives from its participants.
In this prospectus and the accompanying prospectus supplement, for
book-entry securities, references to actions taken by security holders will mean
actions taken by DTC upon instructions from its participants, and references to
payments and notices of redemption to security holders and notices of redemption
to DTC as the registered holder of the securities for distribution to
participants in accordance with DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New York
banking law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered under section 17A of the Securities Exchange Act of 1934. The
rules applicable to DTC and its participants are on file with the SEC.
Citigroup will not have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests in the book-entry securities or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
29
33
PLAN OF DISTRIBUTION
The CompanyCitigroup may offer the Offered Securitiesoffered securities in one or more of the following
ways from time to time:
(i)- to or through underwriters or dealers;
(ii)- by itself directly;
(iii)- through agents; or
- through a combination of any of these methods of sale.
Any such underwriters, dealers or agents may include any broker-dealer
subsidiary of the Company (each, a "Broker-Dealer Subsidiary").Citigroup.
The Prospectus
Supplement with respectprospectus supplement relating to an offering of Offered Securitiesoffered securities
will set forth (i) the terms of such offering, includingincluding:
- the name or names of any underwriters, dealers or agents, (ii)agents;
- the purchase price of the Offered Securitiesoffered securities and the proceeds to
the CompanyCitigroup from such sale, (iii)sale;
- any underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation, (iv)compensation;
- the initial public offering price, (v)price;
- any discounts or concessions to be allowed or reallowed or paid to
dealersdealers; and
(vi)- any securities exchanges on which such Offered Securitiesoffered securities may be listed.
Any initial public offering prices, discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in an offering of Offered Securities,offered securities, such Offered
Securitiesoffered
securities will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The securities may be offered either offered to the public through
underwriting syndicates represented by one or more managing underwriters or by
one or more underwriters without a syndicate. Unless otherwise set forth in the
Prospectus Supplement, the obligations ofprospectus supplement, the underwriters to purchase Offered
Securities will be subject to certain conditions precedent, and the underwriters
willnot be obligated to purchase
offered securities unless specified conditions are satisfied, and if the
underwriters do purchase any offered securities, they will purchase all such Offered Securities if any are purchased.offered
securities.
In connection with underwritten offerings of the Offered Securitiesoffered securities and in
accordance with applicable law and industry practice, underwriters may
over-allot or effect transactions whichthat stabilize, maintain or otherwise affect
the market price of the Offered Securitiesoffered securities at levels above those whichthat might
otherwise prevail in the open market, including by entering stabilizing bids,
effecting syndicate covering transactions or imposing penalty bids.bids, each of
which is described below.
- A stabilizing bid means the placing of any bid, or the effecting of any
purchase, for the purpose of pegging, fixing or maintaining the price of
a security.
- A syndicate covering transaction means the placing of any bid on behalf
of the underwriting syndicate or the effecting of any purchase to reduce
a short position created in connection with the offering.
- A penalty bid means an arrangement that permits the managing underwriter
to reclaim a selling concession from a syndicate member in connection
with the offering when Offered
Securitiesoffered securities originally sold by the
syndicate member are purchased in syndicate covering transactions.
SuchThese transactions may be effected on the New York Stock
Exchange,NYSE, in the over-the-counter
market, or otherwise. Underwriters are not required to engage in any of these
activities. Anyactivities, or to continue such activities if commenced, may be discontinued at any time.commenced.
30
34
If dealers are utilized in the sale of Offered Securities, the Companyoffered securities, Citigroup will
sell such Offered Securitiesoffered securities to the dealers as principals. The dealers may then
resell such Offered Securitiesoffered securities to the public at varying prices to be determined
by such dealers at the time of resale. The names of the dealers and the terms of
the transaction will be set forth in the Prospectus Supplementprospectus supplement relating thereto.to that
transaction.
Offered Securitiessecurities may be sold directly by the CompanyCitigroup to one or more
institutional purchasers, or through agents designated by the CompanyCitigroup from time to
time, at a fixed price or prices, which may be changed, or at varying prices
determined at the time of sale. Any agent involved in the offer or sale of the
Offered Securitiesoffered securities in respect of which this Prospectusprospectus is delivered will be
named, and any commissions payable by the CompanyCitigroup to such agent will be set forth,
in the Prospectus Supplementprospectus supplement relating thereto.to that offering. Unless otherwise
indicated in such Prospectus Supplement,prospectus supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
As one of the means of direct issuance of Offered Securities, the Companyoffered securities, Citigroup may
utilize the services of an entity through which it may conduct an electronic
"dutch auction" or similar offering of the 37
Offered Securitiesoffered securities among potential
purchasers who are eligible to participate in the auction or offering of such
Offered Securities,offered securities, if so described in the applicable Prospectus Supplement.prospectus supplement.
If so indicated in the applicable Prospectus Supplement, the Companyprospectus supplement, Citigroup will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Offered Securitiesoffered securities from the CompanyCitigroup at the public
offering price set forth in such Prospectus Supplementprospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
Prospectus Supplementprospectus supplement and the Prospectus Supplementprospectus supplement will set forth the
commission payable for solicitation of such contracts.
The Broker-Dealer Subsidiariesbroker-dealer subsidiaries of Citigroup, including Salomon Smith Barney
Inc., are members of the National Association of Securities Dealers, Inc. (the "NASD") and subsidiaries of the Company, and
may participate in distributions of the Offered Securities.offered securities. Accordingly,
offerings of Offered Securitiesoffered securities in which Broker-Dealer SubsidiariesCitigroup's broker-dealer subsidiaries
participate will conform with the requirements set forth in Rule 2720 of the
Conduct Rules of the NASD.
This Prospectusprospectus, together with anany applicable Prospectus Supplementprospectus supplement may
also be used by any Broker-Dealer Subsidiarybroker-dealer subsidiary of Citigroup in connection with
offers and sales of the Offered Securitiesoffered securities in market-making transactions,
including block positioning and block trades, at negotiated prices related to
prevailing market prices at the time of sale. Any Broker-Dealer
Subsidiaryof Citigroup's broker-dealer
subsidiaries, including Salomon Smith Barney Inc., may act as principal or agent
in such transactions. No Broker-Dealer
Subsidiary hasNone of Citigroup's broker-dealer subsidiaries have any
obligation to make a market in any of the Offered Securitiesoffered securities and may discontinue
any market-making activities at any time without notice, at its sole discretion.
Underwriters, dealers and agents may be entitled, under agreements with
the
Company,Citigroup, to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act.Citigroup relating to material misstatements
and omissions. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for, the
CompanyCitigroup and affiliates of
the CompanyCitigroup in the ordinary course of business.
Each series of Offered Securitiesoffered securities will be a new issue of securities and
will have no established trading market. Any underwriters to whom Offered Securitiesoffered
securities are sold for public offering and sale may make a market in such
Offered
Securities,offered securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Offered Securitiesoffered securities
may or may not be listed on a national securities exchange. No assurance can be
given that there will be a market for the Offered Securities.offered securities.
31
35
ERISA MATTERS
By virtue of the Company's affiliation with certain of itsCitigroup has subsidiaries, including insurance company subsidiaries and
the Broker-Dealer Subsidiaries,broker-dealer subsidiaries, that provide services to many employee benefit
plans, including investment
advisory and asset management services, the Companyplans. Citigroup and any direct or indirect subsidiary of the CompanyCitigroup may each be
considered a "party in interest" within the meaning of the Employee Retirement
Income Security Act of 1974, as amended
("ERISA"), and a "disqualified person" under corresponding
provisions of the Internal Revenue Code of 1986, (the "Code"), with respectrelating to many employee
benefit plans. "Prohibited transactions" within the meaning of ERISA and the
Code may result if any Offered Securitiesoffered securities are acquired by an employee benefit
plan with respectas to which the CompanyCitigroup or any direct or indirect subsidiary of the CompanyCitigroup is
a party in interest, unless such Offered Securitiesoffered securities are acquired pursuant to an
applicable exemption. Any employee benefit plan or other entity subject to which such
provisions of ERISA or the Code apply proposing to acquire the Offered
Securitiesoffered
securities should consult with its legal counsel.
38
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by
Stephanie B. Mudick, Esq., Deputy General Counsel-Corporate LawCounsel of the Company, 153
East 53(rd) Street,Citigroup, 399 Park
Avenue, New York, NYNew York 10043 and/or Skadden, Arps, Slate, Meagher & Flom
LLP, New York, New York, or by counsel to be identified in the applicable
Prospectus Supplement.prospectus supplement, will act as legal counsel to Citigroup. Ms. Mudick General Counsel-Corporate Law and Assistant
Secretary of the Company,
beneficially owns, or has rights to acquire under the
Company'sCitigroup's employee benefit
plans, an aggregate of less than 1% of the Company's
Common Stock. Certain legal matters will be passed upon for the underwriters or
agents byCitigroup's common stock. Dewey
Ballantine LLP, New York, New York, or byother counsel to be identified in the
applicable Prospectus Supplement.prospectus supplement, will act as legal counsel to the underwriters.
Dewey Ballantine LLP has from time to time acted as counsel for the CompanyCitigroup and certain of
its subsidiaries and may do so in the future. Kenneth J. Bialkin, a partner of
Skadden, Arps, Slate, Meagher & Flom LLP, is a director of the Company,Citigroup, and he and
other attorneys in such firm beneficially own an aggregate of less than one
percent1% of
the Common Stockcommon stock of the Company.Citigroup. A member of Dewey Ballantine LLP participating in
this matter is the beneficial owner of sharesan aggregate of the Company's
Common Stock.less than 1% of
Citigroup's common stock.
EXPERTS
The consolidated financial statements and schedules of Travelers GroupCitigroup Inc.
("Travelers") as of December 31,
19971999 and 1996,1998, and for each of the years in the three-year period ended December
31, 1997, incorporated by reference or included
in Travelers' Annual Report on Form 10-K, as amended, for the year ended
December 31, 1997, and incorporated by reference herein,1999, have been audited by KPMG Peat Marwick LLP, independent certified public accountants, as set forth in
their reports thereon (also incorporated by reference herein), which reports
state that KPMG Peat Marwick LLP did not audit the consolidated financial
statements of Salomon Inc and its subsidiaries, appearing in Salomon Inc's
Annual Report on Form 10-K for the year ended December 31, 1996 (the "Salomon
Financials"), as of December 31, 1996, and for each of the two years in the
period ended December 31, 1996 and that their opinion with respect to any
amounts derived from the Salomon Financials is based on the report of Arthur
Andersen LLP. The consolidated financial statements of Travelers referred to
above are incorporated by reference herein in reliance upon such reports and
upon the authority of said firms as experts in accounting and auditing.
The consolidated financial statements of Citicorp and its subsidiaries as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997, and the related consolidated balance sheets of
Citibank, N.A. and subsidiaries as of December 31, 1997 and 1996, included in
the 1997 Citicorp Annual Report and Form 10-K, have been incorporated by
reference herein, in reliance upon the report (also incorporated by reference
herein) of KPMG Peat Marwick LLP, independent certified public accountants, and
upon the authority of said firm as experts in accounting and auditing.
The supplemental consolidated financial statements and schedule of Citigroup
Inc. (formerly Travelers Group Inc.) ("Citigroup") as of December 31, 1997 and
1996, and for each of the years in the three-year period ended December 31,
1997, included in Citigroup's Current Report on Form 8-K dated October 26, 1998,
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants, as set forth in their report thereon,on the consolidated financial
statements. The consolidated financial statements are included thereinin Citigroup's
annual report on Form 10-K for the year ended December 31, 1999, as amended, and
incorporated herein by reference which report states that KPMG Peat Marwick LLP
did not audit the Salomon Financials (as defined above) and that their opinion
with respect to any amounts derived from the Salomon Financials is based on thein this prospectus. The report of Arthur Andersen LLP. Generally acceptedKPMG LLP also is
incorporated by reference in this prospectus. The report of KPMG LLP covering
the December 31, 1999 consolidated financial statements refers to changes, in
1999, in Citigroup's methods of accounting principles
proscribe giving effect to a consummated business combination accounted for by
the pooling of interests method in financial statementsinsurance-related assessments,
accounting for insurance and reinsurance contracts that do not includetransfer
insurance risk, and accounting for the datecosts of consummation.start-up activities. The supplemental consolidated financial statements do not
extend through the date of consummation. However, they will become the
historical
consolidated financial statements of Citigroup after financial
statements covering the date of
39
consummation of the business combination are issued. The supplemental
consolidated financial statements referred to above are
incorporated by reference hereinin this prospectus in reliance upon such reports givenreport and
upon the authority of said firmsthat firm as experts in accounting and auditing. To the
extent that KPMG Peat Marwick LLP audits and reports on consolidated financial statements of
Citigroup issued at future dates, and consents to the use of their report
thereon, such consolidated financial statements also will be incorporated by
reference in the registration statement in reliance upon their report and said
authority.
AVAILABLE INFORMATION
Our Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the SEC. You can inspect and
copy such reports and other information at the public reference facilities
maintained by the SEC at: Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549; Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and Seven World Trade Center, New York, New York 10048. You can also
obtain copies of such material from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC
also maintains a site on the World Wide Web, the address of which is
http://www.sec.gov, that contains reports, proxy and information statements and
other information regarding issuers, such as our Company, that file
electronically with the SEC. The Company's common stock is listed on the NYSE
and The Pacific Exchange, Inc., and such reports, proxy statements, and other
information can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, and The Pacific Exchange, Inc.,
301 Pine Street, San Francisco, California 94104, and 233 South Beaudry Avenue,
Los Angeles, California 90012.
We have filed with the SEC a Registration Statement on Form S-3 (the
"Registration Statement," which term shall include all amendments, exhibits,
annexes and schedules thereto) pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Offered Securities. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company and
the Offered Securities, reference is made to the Registration Statement and
exhibits thereto. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete, and in each
instance reference is made to the copy of such contract or document filed as an
exhibit to the Company's Registration Statement, each such statement being
qualified in all respects by such reference.
4032
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Our Company incorporates by reference into this Prospectus the following
documents previously filed with the SEC pursuant to the Exchange Act:
1. Annual Report on Form 10-K, as amended, of the Company for the fiscal year
ended
December 31, 1997;
2. Quarterly Reports on Form 10-Q of the Company for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998;
3. Current Reports on Form 8-K of the Company, dated January 6, 1998, January
26, 1998, February 17, 1998, April 6, 1998, April 8, 1998, April 20, 1998,
June 1, 1998, July 20, 1998, August 18, 1998, August 31, 1998, October 8,
1998, October 21, 1998, October 26, 1998, October 29, 1998, November 1, 1998
and November 13, 1998; and
4. Registration Statement on Form 8-B, dated May 10, 1988, describing the
Common Stock, including any amendments or reports filed for the purpose of
updating such description.
Any documents we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the later of
(i) the termination of the offering of Offered Securities hereby and (ii) the
date on which any Broker-Dealer Subsidiary ceases offering and selling Offered
Securities pursuant to this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such document.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed to constitute a part of
this Prospectus except as so modified or superseded.
We will provide without charge to each person to whom this Prospectus is
delivered, on the written or oral request of any such person, a copy of any or
all of the documents incorporated by reference in the Registration Statement of
which this Prospectus forms a part other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents.
Requests should be directed to Citigroup Inc., 153 East 53(rd) Street, New York,
NY 10043; Attention: Treasurer; telephone (212) 559-1000.
41
SUBJECT TO COMPLETION, DATED DECEMBER 15, 1998
PROSPECTUS SUPPLEMENT
(To Prospectus Dated , 1998)36
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. WECITIGROUP INC. MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
IS EFFECTIVE. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
$6,000,000,000
[LOGO]SUBJECT TO COMPLETION, DATED NOVEMBER 20, 2000
PROSPECTUS SUPPLEMENT
(To prospectus dated , 2000)
$25,000,000,000
CITIGROUP LOGO
MEDIUM-TERM SENIOR NOTES, SERIES AD
MEDIUM-TERM SUBORDINATED NOTES, SERIES AD
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
GENERAL TERMS OF SALE
The following terms will generally apply to the medium-term senior and
subordinated notes that we will sell from time to time using this Prospectus
Supplementprospectus
supplement and the attached Prospectus. Weprospectus. Citigroup will include information on
the specific terms for each note in a Pricing Supplementpricing supplement to this Prospectus
Supplementprospectus
supplement that weCitigroup will deliver to prospective buyers of any note. The
maximum amount that we expectCitigroup expects to receive from the sale of the notes is
between $5,820,000,000$24,968,750,000 and $5,992,500,000$24,750,000,000 after paying the agent commissions
of between $7,500,000$31,250,000 and $180,000,000.$250,000,000.
MATURITY: 9 months or more from the INTEREST RATES: Fixed, floating, or zero
date of issue. INTEREST RATES: Fixed, Floating, or Zero Coupon.
BASE FLOATING
RATES: Floating Interest Rates may be based,
among others, on:
- LIBOR
- Commercial Paper Rate
- Treasury Rate
- CD Rate
- Prime Rate
- J.J. Kenny Rate
- Eleventh District Cost of Funds Rate
- Federal Funds Ratecoupon.
INDEXED NOTES: Payments of interest or RANKING: Senior notes are part of our
principal may be linked to senior indebtedness; and
the price of one or more subordinated notes are part
securities, currencies, of our subordinated
commodities or other goods. PAYMENT DATES: Generally semi-annually for Fixed Rate
Notes.
Interest on Floating Rate or Indexed
Notesindebtedness.
REDEMPTION: Terms of specific notes may be paid monthly, quarterly,
semi-annually or annually.
FORM: Certificated or book-entry form.
CURRENCIES: U.S. Dollars and other currencies. OTHER TERMS: YOU SHOULD REVIEW "DESCRIPTION OF NOTES" AND
THE PRICING SUPPLEMENT FOR FEATURES THAT APPLY TO YOUR
NOTES. TERMS OF SPECIFIC NOTES MAY PERMIT ONE OR MORE OF
THESE FEATURES:
- May be redeemableYou should review
permit or repurchasable by
us;
- May be repayable at your option;
- May be renewable at your optionrequire redemption "Description of the Notes"
or extendible at our option;
- Interest rate may be resetrepurchase at our option from timeand the pricing supplement
or your option. for features that apply to
time and be
redeemable by you at the time of any
reset;
- May be issued with Original Issue
Discount for tax purposes; or
- Portion of principal may be payable
prior to maturity.
SALES OF NOTES: Notes may be sold through:
- our broker-dealer subsidiary, as the
Agent, or as principal; or
- such other dealers that the Company
may choose.your notes.
RISKS: Notes may be subject to certain
indexationIndex and currency risks.risks may
exist.
------------------------
CONSIDER CAREFULLY THE INFORMATION UNDER
"CURRENCY RISKS" AND "RISKS OF INDEXED
NOTES" BEGINNING ON PAGE S-25 OF THIS
PROSPECTUS SUPPLEMENT.
RANKING: Senior Notes are part of our Senior
Indebtedness; and
Subordinated Notes are part of our
Subordinated Indebtedness.
DENOMINATION: Minimum of $1,000, increased in
multiples of $1,000.
--------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES OR
INSURANCE COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS SUPPLEMENT OR ANY ACCOMPANYING PROSPECTUS OR
PRICING SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE NOTES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE
UNSECURED DEBT OBLIGATIONS OF THE COMPANY AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
, 1998
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS AND IN ANY PRICING SUPPLEMENT. WE
HAVE NOT, AND THE AGENT (AS DEFINED HEREIN) HAS NOT, AUTHORIZED ANY OTHER PERSON
TO PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT
OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELYUNDER "RISK FACTORS" BEGINNING ON IT. WE ARE NOT, AND THE
AGENT IS NOT, MAKING AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE
THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION
APPEARING IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AS WELL AS
INFORMATION WE PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
INCORPORATED BY REFERENCE, IS ACCURATE AS OF THE DATE ON THE FRONT COVERPAGE
S-3 OF THIS PROSPECTUS SUPPLEMENT ONLY (OR, IN THE CASE OF ANY PRICING SUPPLEMENT, AS OF THE
DATE OF SUCH PRICING SUPPLEMENT). OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.
------------------------SUPPLEMENT.
Neither the Securities and Exchange Commission nor any state securities or
insurance commission has approved or disapproved of these securities or
determined if this prospectus supplement or any accompanying prospectus or
pricing supplement is truthful or complete. Any representation to the contrary
is a criminal offense.
These notes are not deposits or savings accounts but are unsecured debt
obligations of Citigroup Inc. These notes are not insured by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality.
SALOMON SMITH BARNEY
, 2000
37
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
---------
Risk Factors................................................ S-3
Important Currency Information....................................................... S-3Information.............................. S-6
Description of Notes................................................................. S-3
Currency Risks....................................................................... S-25
Risks of Indexed Notes............................................................... S-26
Certainthe Notes.................................... S-7
United States Federal Income Tax Considerations.............................. S-27Considerations............. S-31
Plan of Distribution................................................................. S-33Distribution........................................ S-38
Legal Matters............................................... S-39
PROSPECTUS
Prospectus Summary..................................................................... 2Summary.......................................... 1
Forward-Looking Statements.................................. 6
Citigroup Inc. ............................................. 7
Use of Proceeds and Hedging............................................................ 4
Ratio of Income to Fixed Charges and Ratio of Income to Combined Fixed Charges
Including
Preferred Stock Dividends.......................................................... 5Hedging................................. 8
European Monetary Union................................................................ 6Union..................................... 9
Description of Debt Securities......................................................... 7Securities.............................. 10
Description of Index Warrants..........................................................Warrants............................... 17
Description of Preferred Stock......................................................... 22Capital Stock................................ 20
Description of Capital Stock........................................................... 24Preferred Stock.............................. 23
Description of Depositary Shares....................................................... 34Shares............................ 26
Book-Entry Procedures and Settlement........................ 29
Plan of Distribution................................................................... 37Distribution........................................ 30
ERISA Matters.......................................................................... 38Matters............................................... 32
Legal Matters.......................................................................... 39
Experts................................................................................ 39
Available Information.................................................................. 40
Incorporation of Certain Documents by Reference........................................ 41Matters............................................... 32
Experts..................................................... 32
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38
RISK FACTORS
CHANGES IN EXCHANGE RATES AND EXCHANGE CONTROLS COULD RESULT IN A SUBSTANTIAL
LOSS TO YOU.
An investment in foreign currency notes, which are notes denominated in a
specified currency other than U.S. dollars, entails significant risks that are
not associated with a similar investment in a security denominated in U.S.
dollars. Similarly, an investment in an indexed note, on which all or a part of
any payment due is based on a currency other than U.S. dollars, has significant
risks that are not associated with a similar investment in non-indexed notes.
Such risks include, but are not limited to:
- the possibility of significant market changes in rates of exchange
between U.S. dollars and such specified currency;
- the possibility of significant changes in rates of exchange between U.S.
dollars and the specified currency resulting from official redenomination
relating to such specified currency; and
- the possibility of the imposition or modification of foreign exchange
controls by either the United States or foreign governments.
Such risks generally depend on factors over which Citigroup has no control and
which cannot be readily foreseen, such as
- economic events;
- political events; and
- the supply of, and demand for, the relevant currencies.
In recent years, rates of exchange between the U.S. dollar and some foreign
currencies in which Citigroup's notes may be denominated and between these
foreign currencies and other foreign currencies, have been volatile. This
volatility may be expected in the future. Fluctuations that have occurred in any
particular exchange rate in the past are not necessarily indicative, however, of
fluctuations that may occur in the rate during the term of any foreign currency
note. Depreciation of the specified currency of a foreign currency note against
U.S. dollars would result in a decrease in the effective yield of such foreign
currency note below its coupon rate and could result in a substantial loss to
the investor on a U.S. dollar basis.
Governments have imposed from time to time, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a specified currency other than U.S. dollars at the time of payment of
principal, any premium, or interest on a foreign currency note. There can be no
assurance that exchange controls will not restrict or prohibit payments of
principal, any premium, or interest denominated in any such specified currency.
Even if there are no actual exchange controls, it is possible that such
specified currency would not be available to Citigroup when payments on such
note are due because of circumstances beyond the control of Citigroup. In this
event, Citigroup will make required payments in U.S. dollars on the basis
described in this prospectus supplement. You should consult your own financial
and legal advisors as to the risks of an investment in notes denominated in a
currency other than U.S. dollars. See "-- The Unavailability of Currencies Could
Result in a Substantial Loss to You" and "Description of the Notes -- Payment of
Principal and Interest" below.
The information set forth in this prospectus supplement is directed to
prospective purchasers of notes who are United States residents. Citigroup
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States regarding any matters that may affect
the purchase or holding of, or receipt of payments of principal, premium or
interest on, notes. Such persons should consult their advisors with regard to
these matters. Any pricing supplement relating to notes having a specified
currency other than U.S. dollars will contain a description of any material
exchange controls affecting such currency and any other required information
concerning such currency.
S-3
39
THE UNAVAILABILITY OF CURRENCIES COULD RESULT IN A SUBSTANTIAL LOSS TO YOU.
Except as set forth below, if payment on a note is required to be made in a
specified currency other than U.S. dollars and such currency is --
- unavailable due to the imposition of exchange controls or other
circumstances beyond Citigroup's control;
- no longer used by the government of the country issuing such currency; or
- no longer used for the settlement of transactions by public institutions
of the international banking community --
then all payments on such note shall be made in U.S. dollars until such currency
is again available or so used. The amounts so payable on any date in such
currency shall be converted into U.S. dollars on the basis of the most recently
available market exchange rate for such currency or as otherwise indicated in
the applicable pricing supplement. Any payment on such note made under such
circumstances in U.S. dollars will not constitute an event of default under the
indenture under which such note shall have been issued.
If the specified currency of a note is officially redenominated, other than
as a result of European Monetary Union, such as by an official redenomination of
any such specified currency that is a composite currency, then the payment
obligations of Citigroup on such note will be the amount of redenominated
currency that represents the amount of Citigroup's obligations immediately
before the redenomination. The notes will not provide for any adjustment to any
amount payable under such notes as a result of
- any change in the value of the specified currency of such notes relative
to any other currency due solely to fluctuations in exchange rates; or
- any redenomination of any component currency of any composite currency,
unless such composite currency is itself officially redenominated.
For a description of European Monetary Union, see "European Monetary Union" in
the prospectus and any disclosure on European Monetary Union in an applicable
pricing supplement.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies, and vice versa. In addition, banks do
not generally offer non-U.S. dollar-denominated checking or savings account
facilities in the United States. Accordingly, payments on notes made in a
currency other than U.S. dollars will be made from an account at a bank located
outside the United States, unless otherwise specified in the applicable pricing
supplement.
JUDGMENTS IN A FOREIGN CURRENCY COULD RESULT IN A SUBSTANTIAL LOSS TO YOU.
The notes will be governed by, and construed in accordance with, the law of
New York State. Courts in the United States customarily have not rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. A 1987 amendment to the Judiciary Law of New York State provides,
however, that an action based upon an obligation denominated in a currency other
than U.S. dollars will be rendered in the foreign currency of the underlying
obligation. Any judgment awarded in such an action will be converted into U.S.
dollars at the rate of exchange prevailing on the date of the entry of the
judgment or decree.
CHANGES IN THE VALUE OF UNDERLYING ASSETS OF INDEXED NOTES COULD RESULT IN A
SUBSTANTIAL LOSS
TO YOU.
An investment in indexed notes may have significant risks that are not
associated with a similar investment in a debt instrument that:
- has a fixed principal amount;
- is denominated in U.S. dollars; and
S-4
40
- bears interest at either a fixed rate or a floating rate based on
nationally published interest rate references.
The risks of a particular indexed note will depend on the terms of such
indexed note. Such risks may include, but are not limited to, the possibility of
significant changes in the prices of:
- the underlying assets;
- another objective price; and
- economic or other measures making up the relevant index.
Underlying assets could include:
- securities;
- currencies;
- intangibles;
- goods;
- articles; and
- commodities.
The risks associated with a particular indexed note generally depend on
factors over which Citigroup has no control and which cannot readily be
foreseen. These risks include:
- economic events;
- political events; and
- the supply of, and demand for, the underlying assets.
In recent years, currency exchange rates and prices for various underlying
assets have been highly volatile. Such volatility may be expected in the future.
Fluctuations in any such rates or prices that have occurred in the past are not
necessarily indicative, however, of fluctuations that may occur during the term
of any indexed note.
In considering whether to purchase indexed notes, you should be aware that
the calculation of amounts payable on indexed notes may involve reference to:
- an index determined by an affiliate of Citigroup; or
- prices that are published solely by third parties or entities which are
not regulated by the laws of the United States.
The risk of loss as a result of linking of principal or interest payments on
indexed notes to an index and to the underlying assets can be substantial. You
should consult your own financial and legal advisors as to the risks of an
investment in indexed notes.
------------------------
You should only rely on the information contained or incorporated by
reference in this prospectus supplement, the prospectus and any pricing
supplement. Citigroup has not, and the agent has not, authorized any other
person to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. Citigroup is
not, and the agent is not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement and the prospectus, as
well as information Citigroup previously filed with the Securities and Exchange
Commission and incorporated by reference, is accurate as of the date of the
applicable document. Citigroup's business, financial condition, results of
operations and prospects may have changed since that date.
S-5
41
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each Note (as defined below)note in thea currency designatedspecified by
Citigroup Inc. (formerly Travelers Group Inc.)
("Citigroup" or the "Company") for such Note (the "Specified Currency").note. If requested by a prospective purchaser of a Notenote
having a Specified Currencyspecified currency other than U.S. dollars, the Agentagent may at its
discretion arrange for the exchange of U.S. dollars into such Specified Currencyspecified currency
to enable the purchaser to pay for such Note.note. Each such exchange will be made by
the Agentagent on suchthe terms, and
subject to such conditions, limitations and charges asthat the Agentagent may
from time to time establish in accordance with its regular foreign exchange
practice. Allpractice shall control the exchange. The purchaser must pay all costs of
exchange will be borne by the purchaser.exchange.
References hereinin this prospectus supplement to "U.S. dollars," "U.S.$,"
"dollar" or "$" are to the lawful currency of the United States.
S-6
42
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Medium-Term Senior
Notes, Series A (the "Senior Notes")D and Medium-Term Subordinated Notes, Series A (the "Subordinated Notes" and, together with the Senior Notes, the "Notes")D supplements and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securitiesdebt securities set forth
in the Prospectus, to which description referenceprospectus. If any specific information regarding the notes in this
prospectus supplement is hereby made.inconsistent with the more general terms of the debt
securities described in the prospectus, you should rely on the information in
this prospectus supplement.
The pricing supplement (the "Pricing Supplement") for each offering of Notesnotes will contain the specific
information and terms for that offering. If any information in the pricing
supplement, including any changes in the method of calculating interest on any
note, is inconsistent with this prospectus supplement, you should rely on the
information in the pricing supplement. The Pricing Supplementpricing supplement may also add,
update or change information contained in the Prospectusprospectus and this Prospectus Supplement.prospectus
supplement. It is important for you to consider the information contained in the
Prospectus,prospectus, this Prospectus Supplementprospectus supplement and the Pricing
Supplementpricing supplement in making your
investment decision.
GENERAL
Introduction. The Company's Senior Notessenior notes are a series of Senior Debt Securitiessenior debt securities
issued under the Senior Debt Indenture, and the Company's Subordinated NotesCitigroup's senior debt indenture. The subordinated notes are a
series of Subordinated Debt Securitiessubordinated debt securities issued under the Subordinated Debt
Indenture.Citigroup's subordinated
debt indenture. At the date of this Prospectus Supplement,prospectus supplement, the Notesnotes offered
pursuant to this Prospectus Supplementprospectus supplement are limited to an aggregate initial
public offering price or purchase price of up to $6,000,000,000$25,000,000,000 or theits
equivalent
thereof in one or more foreign or composite currencies, whichcurrencies. This amount is
subject to reduction as a result of the sale of other securities under the
registration statement of which this Prospectus Supplementprospectus supplement and the accompanying
Prospectusprospectus form a part, or under a registration statement to which this
Prospectus
Supplementprospectus supplement and the accompanying Prospectusprospectus also relate.
The amount of Notesnotes sold of either series will reduce the amount of Notesnotes
of the other series that may be sold. The CompanyCitigroup reserves the right to withdraw,
cancel or modify the offer made herebyby this prospectus supplement without notice.
The aggregate amount of Notesnotes may be increased from time to time to such larger
amount as may be authorized by the Company.Citigroup.
The U.S. dollar equivalent of the public offering price or purchase price
of a Notenote having a Specified Currencyspecified currency other than U.S. dollars will be determined
on the basis of the market exchange rate. This market exchange rate will be the
noon buying rate in New York City for cable transfers in foreign currencies as
certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such
Specified Currencyspecified currency on the applicable issue date. Such determination will be made
by the CompanyCitigroup or its agent, as the exchange rate agent for the applicable series
of Notes (the "Exchange Rate
Agent").notes.
Ranking. The Senior Notessenior notes will constitute part of the Senior Indebtednesssenior indebtedness
of the
CompanyCitigroup and will rank PARI PASSUon an equal basis with all other unsecured debt of
the Company
exceptCitigroup other than subordinated debt. The Subordinated Notessubordinated notes will be
subordinate and junior in the right of payment, to the extent and in the manner
set forth in the Subordinated Debt Indenture,subordinated debt indenture, to all Senior Indebtednesssenior indebtedness of
the Company.Citigroup. See "Description of Debt Securities--SubordinatedSecurities -- Subordinated Debt" in the
Prospectus.prospectus.
On a consolidated basis, after giving effect to
S-3
the merger of Citicorp into a newly formed, wholly owned subsidiary of the
Company as of September 30, 1998, the aggregate principal amount of Senior
Indebtednesssenior
indebtedness of the CompanyCitigroup outstanding as of September 30, 2000 was approximately
$78.1 billion,
consisting$91.6 billion. This senior indebtedness consisted of the following: approximately $42.5$51.4 billion
of term debt, approximately $21.2$26.6 billion of commercial paper and approximately
$14.4$13.6 billion of other short-term borrowings.
Forms of Notes. The Notesnotes will be issued in fully registered form only,
without coupons. Each Notenote will be issued initially as either a Global Securitybook-entry note, which
will be a global security registered in the name of a nominee of The Depository Trust Company,DTC, as
Depositary,depository, or such other depositary as is stateddepository named in the Pricing Supplement, (a "Book-Entry Note") or,pricing supplement.
Alternatively, if specified in the applicable pricing supplement, to this Prospectus Supplement (a
"Pricing Supplement"),each note will
be issued initially as a certificated note, which will be a certificate issued
in temporary or definitive form (a
"Certificated Note").form. Except as set forth in the Prospectusprospectus under
"Description
of Debt Securities--Global Securities,"Book-Entry Procedures and Settlement," Book-Entry Notesbook-entry notes will not be issuable as
Certificated Notes.certificated notes. See "Book-Entry System" below.
S-7
43
Denominations. Unless otherwise specified in the applicable Pricing Supplement,pricing
supplement, the authorized denominations of Notesnotes denominated in U.S. dollars
will be $1,000 and any larger amount that is an integrala whole multiple of $1,000, and the$1,000. The
authorized denominations of Notes havingnotes that have a Specified Currencyspecified currency other than U.S.
dollars will be the approximate equivalents thereof in the Specified Currency.specified currency.
Maturity. Unless otherwise specified in the applicable Pricing Supplement,pricing supplement,
each Notenote will mature on a Business Daystated maturity date. Such stated maturity date will
be a business day more than nine months from its date of issue, as selected by
the purchaser and agreed to by the Company (the "Stated Maturity"),
whichCitigroup. The stated maturity date may be
subject to extensionextended at the option of Citigroup. Each note may also be redeemed at the
option of Citigroup, or repaid at the option of the Company.
Each Note may also be subject to redemption at the option of the Company, or to
repayment at the option of the Holder,holder, prior to its Stated Maturity.stated
maturity. Each Note
havingnote that has a Specified Currencyspecified currency of Pounds Sterlingpounds sterling will mature
in compliance with suchthe regulations as the Bank of England may promulgate from time
to time.
Additional Information. The Pricing Supplementpricing supplement relating to a Notenote will
describe the following terms:
(i)- the Specified Currencyspecified currency for such Note; (ii)note;
- whether such Note bears interest
atnote
(1) is a fixed rate (a "Fixed Rate Note") (which rate may be zero in the case of
certain OID Notes, as defined below),note;
(2) is a floating rate (a "Floating Rate Note"),
and/ornote;
(3) is an amortizing note, on whichmeaning that a portion or all the principal
amount is payable prior to Stated Maturitystated maturity in accordance with a
schedule, by application of a formula, or by reference tobased on an index (an "Amortizing Note")index; and/or
(4) is an indexed note (an "Indexed Note") on which payments of interest or principal may be
linked to the amountprice of any interest payment, inone or more securities, currencies,
commodities or other goods;
- the case of an Indexed Rate Note (as defined below), and/or the principal amount
payableprice at maturity, in the case of an Indexed Principal Note (as defined
below),which such note will be determined by reference to the level of prices, or changes in
prices, or differences between prices, of securities, currencies, intangibles,
goods, articles or commodities or by application of a formula; (iii) the price
(expressedissued, which will be expressed as a
percentage of the aggregate principal amount or face amount
thereof) at which such Note will be issued (the "Issue Price"); (iv)amount;
- the original issue date on which such Notenote will be issued (the "Original Issue Date"); (v)issued;
- the date of the Stated Maturity; (vi)stated maturity;
- if such Notenote is a Fixed Rate Note,fixed rate note, the rate per annum at which such Notenote
will bear any interest, if any, and whether and the manner in which such rate may
be changed prior to its Stated Maturity; (vii)stated maturity;
- if such Notenote is a Floating Rate Note,floating rate note, relevant terms such as:
(1) the Base Rate,base rate;
(2) the Initial Interest Rate,initial interest rate;
(3) the Interest Reset
Periodinterest reset period or the Interest Reset Dates,interest reset dates;
(4) the Interest Payment Dates,interest payment dates;
(5) any index maturity;
(6) any maximum interest rate;
(7) any minimum interest rate;
(8) any spread or spread multiplier; and
if
applicable, the Index Maturity, the Maximum Interest Rate, the Minimum Interest
Rate, the Spread or Spread Multiplier (all as defined below), and(9) any other terms relating to the particular method of calculating the
interest rate for such Notenote and whether and the manner in whichhow such Spreadspread or
Spread Multiplierspread multiplier may be changed prior to Stated Maturity; (viii)stated maturity;
- whether such Notenote is a note issued originally at a discount;
- if such note is an OID Note
(as defined below); (ix) if such Note is an Amortizing Note,amortizing note, the terms for repayment prior to
Stated Maturity; (x)stated maturity;
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44
- if such Notenote is an Indexed Note,indexed note, in the case of an Indexed Rate Note,indexed rate note, the
manner in which the amount of any interest payment will be determined or,
in the case of an Indexed Principal Note,indexed principal note, its Face Amount (as defined below)face amount and the manner
in which the principal amount payable at Stated Maturitystated maturity will be
determined;
(xi)- whether such Notenote may be redeemed at the option of the Company,Citigroup, or repaid
at the option of the Holder,holder, prior to Stated
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Maturitystated maturity as described under
"Optional Redemption, Repayment and Repurchase" below and if so, the provisions relating to such redemption or repayment,
including, in the caseterms of
an OID Note or Indexed Note, the information necessary
to determine the amount due uponits redemption or repayment;
(xii)- whether such Note is subject tonote may have an optional extension beyond its Stated Maturitystated
maturity as described under "Extension of Maturity" below;
(xiii)- whether such Notenote will be represented by a Global Securityglobal security or a
certificate issued in definitive form;
(xiv) certain- any special United States federal income tax consequences of the
purchase, ownership and disposition of certain Notes, if any; (xv)a particular issuance of notes;
- whether such Notenote is a Renewable Note (as defined below),renewable note, and, if so, theits specific terms
thereof; (xvi)terms;
- the use of proceeds, if such use materially differs fromdifferent than that disclosed in the
accompanying Prospectus;prospectus; and
(xvii)- any other terms of such Notenote provided in the accompanying Prospectusprospectus to
be set forth in a Pricing
Supplementpricing supplement or that are otherwise not inconsistentconsistent
with the provisions of the Indentureindenture under which such Notenote will be
issued.
"Business Day" with respect toAs used in this prospectus supplement, business day means:
- for any Note meansnote, any day other thanthat is not a Saturday or Sunday and that, in New
York City, is (i) not a day on which banking institutions generally are
authorized or requiredobligated by law or regulationexecutive order to be closed in (a) The City of New York or (b) if
the Specified Currencyclose;
- for such Note is other than U.S. dollars, the financial
center of the country issuing such Specified Currency (which, in the case of the
Euro,LIBOR notes only, a London business day, which shall be Brussels, Belgium) and (ii) ifany such Note is a LIBOR Note (as
defined below), a London Banking Day. "London Banking Day" with respect to any
Note means any day
on which dealings in deposits in the Specified Currency of
such Notespecified currency are transacted in
the London interbank market.
"OID Note"market;
- for notes having a specified currency other than U.S. dollars only, other
than notes denominated in Euros, any day that, in the principal financial
center (as defined below) of the country of the specified currency, is
defined under "Certain United States Federal Income Tax
Considerations--United States Holders--Original Issue Discount."
A "basis point"not a day on which banking institutions generally are authorized or
"bp" equals one one-hundredthobligated by law to close; and
- for EURIBOR notes and notes denominated in Euros, a TARGET business day,
which shall be any day on which the Trans-European Automated Real-Time
Gross Settlement Express Transfer System is open.
As used above, a principal financial center means the capital city of a percentage point.the
country issuing the specified currency. However, for Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Italian lire and Swiss francs,
the principal financial center will be Sydney, Toronto, Frankfurt, Amsterdam,
Milan and Zurich, respectively.
PAYMENT OF PRINCIPAL AND INTEREST
TheCitigroup will pay the principal of, and any premium and interest on, each
Note are payable by
the Companynote in the Specified Currencyspecified currency for such Note.note. If the Specified Currencyspecified currency for a
Notenote is other than U.S. dollars, the CompanyCitigroup will, (unlessunless otherwise specified in
the applicable Pricing Supplement)pricing supplement, arrange to convert all payments in respect of
such Notenote into U.S. dollars in the manner described in the following paragraph.
The Holderholder of a Notenote having a Specified Currencyspecified currency other than U.S. dollars may, (ifif
stated in the applicable Pricing Supplementpricing supplement and such Note so
indicate)note, elect to receive all
payments in respect ofon such Notenote in the Specified
Currencyspecified currency by delivery ofdelivering a written notice
to the Trusteetrustee for such Notenote not later than fifteen calendar days prior to the
applicable payment date, except under the circumstances described under "Currency Risks--Payment Currency" below."Risk
Factors -- The Unavailability of Currencies Could Result in a Substantial Loss
to You" above. Such election will remain in effect until revoked by a written
notice to such Trusteetrustee that is received not later than fifteen calendar days
prior to the applicable payment date anddate. If an event of default has occurred or
Citigroup has given notice of redemption of a note, no such change of election
may be made with respect to payments on any
Note with respect to which (i) an Event of Default has occurred or (ii) the
Company has given notice of redemption.
In the case of a Note having a Specified Currency other than U.S. dollars,
themade.
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45
The amount of any U.S. dollar payment in respect of such Noteon a note having a specified currency
other than U.S. dollars will be determined by the Exchange Rate Agentexchange rate agent:
- based on the highest firm bid quotation expressed in U.S. dollars
received by the Exchange Rate Agentexchange rate agent at approximately 11:00 a.m., New York
City time, on the second Business Daybusiness day preceding the applicable payment
date, (or,or if no such rate is quoted on such date, the last date on which
such rate was quoted),quoted;
- from three, (or,or if three are not available, then two)two, recognized foreign
exchange dealers in The City of New York (oneCity, one or more of which may be the Agent (as defined herein)agent,
and another of which may be the Exchange Rate Agent)exchange rate agent, that are selected by
the Exchange Rate Agent, for the purchaseexchange rate agent; and
- by the quoting dealer for the purchase.
The exchange rate agent will also determine prior to settlement on such payment date, of the
aggregate amount of such Specified Currencythe specified currency payable on sucha payment date in respect offor all
Notesnotes denominated in such Specified Currency.specified currency. All currency exchange costs will
be borne bydeducted from payments to the Holdersholders of such Notes by deductions from such payments.notes. If no such bid
quotations are available, suchthe payments will be made in such Specified
Currency,the specified currency,
unless such
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Specified Currencythe specified currency is unavailable due to the imposition of exchange
controls or due to other circumstances beyond the Company's control, in whichCitigroup's control. In that case,
such payments will be made as described under "Currency Risks--Payment Currency" below."Risk Factors -- The
Unavailability of Currencies Could Result in a Substantial Loss to You" above.
Unless otherwise specified in the applicable Pricing Supplement,pricing supplement, U.S.
dollar payments of interest on Notes (othernotes, other than interest payable at Stated Maturity)stated
maturity, will be made, except as provided below, by check mailed to the
registered Holdersholders of such Notes (which, innotes. In the case of Global Securitiesglobal securities representing
Book-Entry Notes,book-entry notes, such payments of interest on notes will be made to a nominee
of the Depositary); PROVIDED, HOWEVER, that,depositary. However, in the case of a Notenote issued between a Regular Record Dateregular
record date and the related Interest Payment Date, unless otherwise specified in the related Pricing
Supplement,interest payment date, interest for the period
beginning on the Original Issue Dateoriginal issue date for such Notenote and ending on such Interest Payment Date shallinterest
payment date generally will be paid to the holder on the next succeeding
Interest Payment Date to the registered Holder of such Note on the
related Regular Record Date.interest payment date.
A Holderholder of $10,000,000, (or theor its equivalent thereof in a Specified Currencyspecified currency other
than U.S. dollars)dollars, or more in aggregate principal amount of Notesnotes of like tenor
and term, shallwill be entitled to receive such U.S. dollar payments by wire transfer
of immediately available funds, butfunds. However, such a holder is entitled to receive
such payments only if the trustee receives written appropriate wire transfer
instructions have been received in writing by the
Trustee for such Notesnotes not later than fifteen calendar days prior to the
applicable Interest Payment Date. Simultaneously with the election by any Holder
to receive payments in a Specified Currency other than U.S. dollars (as provided
above), such Holder shall provide appropriate wire transfer instructions to the
Trustee for such Notes.interest payment date. Unless otherwise specified in the applicable
Pricing
Supplement,pricing supplement, principal and any premium and interest payable at the Stated
Maturitystated
maturity of a Notenote will be paid in immediately available funds upon surrender of
such Notenote at the corporate trust office or agency of the Trusteetrustee for such Notenote
in The City of New York.York City.
Unless otherwise specified in this Prospectus Supplementprospectus supplement or the applicable
Pricing Supplement,pricing supplement, any payment required to be made in respect ofon a Notenote on a date,
(includingincluding the day of Stated Maturity)stated maturity date, that is not a Business Daybusiness day for such Notenote
need not be made on such date, butdate. A payment may be made on the next succeeding
Business Daybusiness day with the same force and effect as if made on such date, and nodate. No
additional interest shallwill accrue as a result of such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement,pricing supplement, if the
principal of any OID Note (othernote, other than an Indexed Note (as defined herein))indexed note, is declared to be due and
payable immediately as a result of the acceleration of Stated Maturity, as described under "Description of Debt Securities-- Defaults"
in the Prospectus,stated maturity, the
amount of principal due and payable with respectrelating to such Note shallnote will be limited to the
aggregate principal amount of such Notenote multiplied by the sum of (1) its Issue Price (expressedissue
price, expressed as a percentage of the aggregate principal amount)amount, plus (2) the
original issue discount amortized from the date of issue to the date of
declaration, which amortization shalldeclaration. Amortization will be calculated using the "interest method" (computedinterest method, computed
in accordance with U.S. generally accepted accounting principles in effect on
the date of declaration).declaration.
The Regular Record Date with respect toregular record date for any Interest Payment Dateinterest payment date for a Floating Rate Note, Fixed Rate Notefloating rate
note, fixed rate note or an Indexed Rate Note shallindexed rate note will be the date, (whetherwhether or not a
Business Day)business day, fifteen calendar days immediately preceding such Interest Payment Date.interest payment
date.
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46
FIXED RATE NOTES
Each Fixed Rate Notefixed rate note will bear interest from its Original Issue Date,original issue date, or
from the last Interest Payment Dateinterest payment date to which interest has been paid or duly
provided for, at the rate per annum stated in the applicable Pricing Supplementpricing supplement
until theits principal amount thereof is paid or made available for payment, exceptpayment. However, as
described below under "Subsequent Interest Periods" and "Extension of Maturity,"
and except that if so specifiedor as otherwise may be described in the applicable Pricing Supplement,pricing supplement, the rate
of interest payable on certain Fixed Rate Notesfixed rate notes may be subject to
adjustmentadjusted from time to time as described in such Pricing Supplement.time.
Unless otherwise set forth in the applicable Pricing Supplement,pricing supplement, interest
on each Fixed
Rate Notefixed rate note will be payable semiannually in arrears on such dates as
set forth in the applicable Pricing
S-6
Supplement (eachpricing supplement, with each such day being an
"Interest Payment Date")interest payment date, and at Stated
Maturity.stated maturity. Unless "accrue to pay" is
specified in the applicable pricing supplement or unless otherwise specified in
the applicable Pricing Supplement,pricing supplement, if an Interest Payment Date with respect tointerest payment date for any Fixed Rate Notefixed
rate note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be
postponed; PROVIDED, HOWEVER, thatbusiness day, any payment
required to be made in respect ofon such Note on a date (including the day of Stated Maturity) that is not a
Business Day for such Note need not be madenote on such date, butincluding the stated maturity
date, may be made on the next succeeding Business Daybusiness day with the same force and
effect as if made on such date, and nodate. No additional interest shallwill accrue as a result
of such delayed payment.
However, ifIf in connection with respectany fixed rate note, "accrue to any Fixed Rate Note, "Accrue to Pay"pay" is specified in
the applicable Pricing Supplement,pricing supplement, and any Interest Payment Date
with respect tointerest payment date for such Fixed Rate Notefixed
rate note would otherwise be a day that is not a Business Day,business day, such Interest Payment Date shallinterest
payment date will be postponed to the next succeeding Business Day. Eachbusiness day. Any payment
of interest in respect of an Interest
Payment Date shallon such interest payment date will include interest accrued through
the day before such Interest
Payment Date.interest payment date. Unless otherwise specified in the
applicable Pricing Supplement,pricing supplement, interest on Fixed Rate Notesfixed rate notes will be computed on
the basis of a 360-day year of twelve 30-day months ("30 over 360") or, in the case of an
incomplete month, the number of days elapsed.
FLOATING RATE NOTES
From its Original Issue DateThe initial interest period is the period from the original issue date to,
but not including, the first Interest Reset
Date (as defined below) (the period hereinafter called the "Initial Interest
Period"), each Floating Rate Noteinterest reset date. Each floating rate note will
bear interest at the Initial Interest
Rateinitial interest rate set forth, or otherwise described, in
the Pricing Supplement. Fromapplicable pricing supplement. The interest reset period is the period from
each Interest Reset Dateinterest reset date to, but not including, the following Interest Reset Date
(each suchinterest reset
date. The initial interest period and any interest reset period is an "Interest Reset Period," and together with the Initial
Interest Period, the "Interest Periods"), theinterest
period. The interest rate for each Floating
Rate Notefloating rate note will be determined by reference tobased
on an interest rate basis, (the "Base
Rate"),the base rate, plus or minus the Spread (as defined below), if any spread, or
multiplied by the Spread Multiplier (as defined below), if any.any spread multiplier. A basis point or bp equals one-hundredth of
a percentage point. The "Spread"spread is the number of basis points that may be
specified in the applicable Pricing Supplementpricing supplement as being applicable to such Note, and the "Spread Multiplier"note. The
spread multiplier is the percentage that may be specified in the applicable
Pricing Supplementpricing supplement as being applicable to such Note, except in each case asnote. As described below under
"Subsequent Interest Periods" and "Extension of Maturity," and except that if soor as may otherwise
be specified in the applicable Pricing Supplement,pricing supplement, the Spreadspread or Spread Multiplierspread
multiplier on certain Floating Rate
Notesfloating rate notes may be subject to adjustmentadjusted from time to time as described in such
Pricing Supplement.time.
The applicable Pricing Supplementpricing supplement will designate one of the following Base Ratesbase
rates as applicable to a Floating Rate Note: (i) LIBOR (a "LIBOR
Note"), (ii)floating rate note:
- the CD Rate;
- the Commercial Paper Rate (a "Commercial Paper Rate Note"), (iii)
the Treasury Rate (a "Treasury Rate Note"), (iv)Rate;
- the Federal Funds Rate (a
"Federal Funds Rate Note"), (v)Rate;
- LIBOR;
- the CD Rate (a "CD Rate Note"), (vi)Treasury Rate;
- the Prime Rate (a "Prime Rate Note"), (vii)Rate;
- the J.J. Kenny Rate (a "J.J. Kenny Rate
Note"), (viii)Rate;
- the Eleventh District Cost of Funds Rate (an "Eleventh District
Cost of Funds Rate Note"),Rate;
- EURIBOR; or
(ix)- such other Base Ratebase rate as is set forth in such
Pricing Supplementthe applicable pricing supplement
and in such Note.note.
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47
The "Index Maturity"following terms are used in describing the various base rates.
The "index maturity" for any Floating Rate
Notefloating rate note is the period of maturity
of the instrument or obligation from which the Base Ratebase rate is calculated.
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication, published by the Board
of Governors of the Federal Reserve System.
"Composite
Quotations""H.15 Daily Update" means the daily statistical release entitled "Composite 3:30 p.m.
Quotations for U.S. Government Securities" published byupdate of the Board of Governors of the
Federal Reserve BankSystem at http://www.bog.frb.fed.us/releases/H15/update or any
successor site or publication.
"Calculation date" means the date by which the calculation agent is to
calculate the interest rate for floating rate notes which will be the earlier of
New York.(1) the tenth calendar day after the related rate determination date, or if any
such day is not a business day, the next succeeding business day or (2) the
business day preceding the applicable interest payment date or the stated
maturity.
As specified in the applicable Pricing Supplement,pricing supplement, a Floating Rate Notefloating rate note may
also have either or both of the following, (in each casewhich will be expressed as a rate per
annum on a simple interest basis): (i)basis:
- maximum interest rate, which will be a maximum limitation, or ceiling, on
the rate at which interest may accrue during any interest period ("Maximum Interest
Rate") and (ii)period; and/or
- minimum interest rate, which will be a minimum limitation, or floor, on
the rate at which interest may accrue during any interest period ("Minimum Interest Rate").period.
In addition to any Maximum Interest Ratemaximum interest rate that may be applicable to any
Floating Rate Note,floating rate note, the interest rate on a Floating Rate Notefloating rate note will in no event
be higher than the maximum rate permitted by applicable law, as the same may be
S-7
modified by United States law of general application.law. The Notesnotes will be
governed by the law of the State of New York and, under such law asState. As of the date of this Prospectus Supplement,prospectus
supplement, the maximum rate of interest under provisions of the New York penal
law, with certaina few exceptions, is 25% per annum on a simple interest basis. Such
maximum rate of interest only applies to obligations that are less than
$2,500,000.
The CompanyCitigroup will appoint and enter into agreements with calculation agents (each a
"Calculation Agent") to
calculate interest rates on Floating Rate Notes.floating rate notes. Unless otherwise specified in
a Pricing Supplement,the applicable pricing supplement, The Bank of New York will be the Calculation Agentcalculation
agent for each Senior Notesenior note that is a Floating Rate Note and Thefloating rate note. Bank One Trust Company,
N.A. (formerly the First National Bank of ChicagoChicago) will be the Calculation Agentcalculation agent
for each Subordinated Notesubordinated note that is a Floating Rate Note.floating rate note. All determinations of
interest by the Calculation Agent shall,calculation agents will, in the absence of manifest error, be
conclusive for all purposes and binding on the holders of the Floating Rate Notes.floating rate
notes.
The interest rate on each Floating Rate Notefloating rate note will be reset on an interest
reset date, which means that the interest rate is reset daily, weekly, monthly,
quarterly, semiannually or annually, (each day on which the interest
rate is reset, an "Interest Reset Date"), as specified in the applicable Pricing
Supplement.pricing
supplement.
Unless otherwise specified in the applicable Pricing Supplement,pricing supplement, the
Interest Reset Datesinterest reset dates will be as follows:
- in the case of Floating Rate Notesfloating rate notes that reset daily, each Business Day;business day;
- in the case of Floating Rate Notes (otherfloating rate notes that reset weekly, other than Treasury
Rate Notes) that reset weekly,notes, the Wednesday of each week;
- in the case of Treasury Rate Notesnotes that reset weekly Tuesday of each week (exceptand except as
provided below under "Treasury Rate Notes");Notes," the Tuesday of each week;
- in the case of Floating Rate Notesfloating rate notes that reset monthly, the third Wednesday of each month (with the exception of monthly
resetother than
Eleventh District Cost of Funds Rate Notes, which reset onnotes, the third Wednesday of each
month;
- in the case of floating rate notes that are Eleventh District Cost of
Funds Rate notes, the first calendar day of each month);month;
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48
- in the case of Floating Rate Notesfloating rate notes that reset quarterly, the third
Wednesday of March, June, September and December of each year;
- in the case of Floating Rate Notesfloating rate notes that reset semiannually, the third
Wednesday of each of two months of each year specified in the applicable
Pricing
Supplement;pricing supplement; and
- in the case of Floating Rate Notesfloating rate notes that reset annually, the third
Wednesday of one month of each year specified in the applicable Pricing
Supplement.pricing
supplement.
If an Interest Reset Dateinterest reset date for any Floating Rate Notefloating rate note would otherwise
befall on a day that is
not a Business Day,business day, such Interest Reset Date shallinterest reset date will be postponed to the next
succeeding Business Day, except that, inbusiness day. In the case of a LIBOR Note,note or a EURIBOR note, if
such Business Day ispostponement to the next business day would cause the interest reset date to be
in the next succeeding calendar month, such Interest
Reset Date shallthe interest reset date will instead be
the immediately preceding Business Day.business day. If an auction of direct obligations of
United States Treasury Bills ("Treasury bills")bills falls on a day that is an Interest Reset Dateinterest reset date for
Treasury Rate Notes,notes, the Interest Reset
Date shallinterest reset date will be the succeeding Business Day.business
day.
Unless otherwise specified in the applicable Pricing Supplementpricing supplement and except
as set forth in the next sentence,below, the rate of interest that goes into effect on any Interest Reset Date shallinterest
reset date will be determined on a rate determination date (the "Rate Determination
Date") preceding such
Interest Reset Date,interest reset date, as further described below. Such Rate
Determination Date may be referred to below as a "CD Rate Determination Date" in
the case of a CD Rate Note, a "Commercial Paper Rate Determination Date" in the
case of a Commercial Paper Rate Note, a "Federal Funds Rate Determination Date"
in the case of a Federal Funds Rate Note, a "LIBOR Determination Date" in the
case of a LIBOR Note, a "Treasury Rate Determination Date" or a "Constant
Maturity Treasury Rate Determination Date" in the case of a Treasury Rate Note,
a "Prime Rate Determination Date" in the case of a Prime Rate Note, a "J.J.
Kenny Rate Determination Date" in the case of a J.J. Kenny Rate Note, or an
"Eleventh District Cost of Funds Rate Date" in the case of an Eleventh District
Cost of Funds Rate Note.
Unless otherwise specified in the applicable Pricing Supplement,pricing supplement, interest
payable in respect of Floating Rate Notes shallon floating rate notes will be the interest accrued from and including
the Original Issue Dateoriginal issue date or the last date to which interest has been paid, as the
case may be, to but excluding the applicable Interest Payment Date.
In the case ofinterest payment date.
Accrued interest on a Floating Rate Note that resets daily or weekly, interest
payable shall be the interest accrued from and including the Original Issue Date
or the last date to which interest has been accrued and paid, as the case may
be, to but excluding the Record Date immediately preceding
S-8
the applicable Interest Payment Date, except that, at Stated Maturity, interest
payable will include interest accrued to but excluding the date of Stated
Maturity.
With respect to a Floating Rate Notefloating rate note with more than one Interest Reset Date
during any period for which accrued interest is being calculated, accrued
interest shallreset
date will be calculated by multiplying the principal amount of such Note
(or, in the case of a Floating Rate Note that is an Indexed Principal Note, its
Face Amount, as indicated in the applicable Pricing Supplement)note by an
accrued interest factor. SuchIf the floating rate note is an indexed principal note,
the face amount of the note will be multiplied by the accrued interest factor.
The accrued interest factor will be computed by adding the interest factors
calculated for each day in the period for which accrued interest is being
calculated. The interest factor (expressed as a decimal
calculated to seven decimal places without rounding) for each such day is
computed, unlessUnless otherwise specified in the applicable Pricing Supplement,pricing supplement, the
interest factor for each such day will be computed by dividing the interest rate
in effect on such day by 360, ("Actual over 360"), in the case of CD Rate notes, Commercial Paper
Rate notes, Federal Funds Rate notes, LIBOR Notes,notes, Prime Rate Notes,notes, J.J. Kenny
Rate Notes,notes, Eleventh District Cost of Funds Rate Notes, Commercial Papernotes and EURIBOR notes. In the
case of Treasury Rate Notes, Federal Funds
Rate Notes and CD Rate Notes, ornotes, the interest factor for each such day will be
computed by dividing such interest rate by the actual number of days in the
year
("Actual over Actual"), in the case of Treasury Rate Notes.year. The interest factor will be expressed as a decimal calculated to seven
decimal places without rounding. For purposes of making the foregoing
calculation, the interest rate in effect on any Interest
Reset Dateinterest reset date will be the
applicable rate as reset on such date.
With respect toFor all other Floating Rate Notes,floating rate notes, accrued interest shallwill be calculated by
multiplying the principal amount of such Note (or, in the case of a Floating
Rate Note that is an Indexed Principal Note, its Face Amount)note by the interest rate in effect
during the period for which accrued interest is being calculated,
and multiplying thatcalculated. That product
is then multiplied by the quotient obtained by dividing the number of days in
the period for which accrued interest is being calculated by 360, in the case of
CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes, LIBOR
Notes,notes, Prime Rate Notes,notes, J.J. Kenny Rate Notes,notes, Eleventh District Cost of Funds
Rate Notes, Commercial Papernotes and EURIBOR notes. In the case of Treasury Rate Notes, Federal Funds Rate Notes
and CD Rate Notes, ornotes, such product
is multiplied by the quotient obtained by dividing the number of days in the
period for which accrued interest is being calculated by the actual number of
days in the year, in the case of
Treasury Rate Notes.year.
Unless otherwise specified in the applicable Pricing Supplement,pricing supplement, all
percentages resulting from any calculation of the rate of interest on a Floating
Rate Notefloating
rate note will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point rounded upward, and
allupward. All
currency amounts used in, or resulting from, such calculation on Floating Rate
Notesfloating rate
notes will be rounded to the nearest one-hundredth of a unit (withunit. For purposes of
such rounding, .005 of a unit beingshall be rounded upward).upward.
Unless otherwise indicated in the applicable Pricing Supplementpricing supplement and except
as provided below, interest will be payable inas follows.
- In the case of Floating Rate Notesfloating rate notes that reset daily, weekly or monthly,
(otherother than Eleventh District Cost of Funds Rate Notes),notes, interest will be
payable on the third Wednesday of each month or on the
S-13
49
third Wednesday of March, June, September and December of each year, as
specified in the applicable Pricing Supplement or, inpricing supplement.
- In the case of Eleventh District Cost of Funds Rate Notes,notes, interest will
be payable on the first calendar day of each March, June, September and
December, as
specified in the applicable Pricing Supplement; inDecember.
- In the case of Floating Rate
Notesfloating rate notes that reset quarterly, interest will be
payable on the third Wednesday of March, June, September, and December of
each year; inyear.
- In the case of Floating Rate Notesfloating rate notes that reset semiannually, interest will
be payable on the third Wednesday of each of two months of each year
specified in the applicable Pricing Supplement; and, inpricing supplement.
- In the case of Floating
Rate Notesfloating rate notes that reset annually, interest will be
payable on the third Wednesday of one month of each year specified in the
applicable Pricing Supplement, and inpricing supplement.
In each caseof these cases, interest will also be payable at Maturity
(each such day being an "Interest Payment Date").maturity.
If an Interest Payment Date
with respectinterest payment date for any floating rate note would fall on a day
that is not a business day, such interest payment date will be postponed to the
next succeeding business day. In the case of a LIBOR note or a EURIBOR note, if
postponement to the next business day would cause the interest payment date to
be in the next succeeding calendar month, the interest payment date will instead
be the immediately preceding business day.
If for any Floating Rate Notefloating rate note, the applicable pricing supplement provides
that the note does not accrue to pay, and if an interest payment date for such
floating rate note would otherwise be a day that is not a Business Day,business day, such
Interest Payment Date shall be postponed to the next
succeeding Business Day, except that, in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day; PROVIDED, HOWEVER, if with
respect to any Floating Rate Note, the applicable Pricing Supplement provides
that the Note does not accrue to pay, if an Interest Payment Date with respect
to such Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Payment Date shallinterest payment date will not be postponed; PROVIDED, FURTHER, that anypostponed. Any payment required to be made in respect of a Floating Rate Note that does not
accrue to pay on a date (including the day of Stated Maturity) that is not a
Business Day for such Note need not be made on
such date, butfloating rate note, however, may be
S-9
made on the next succeeding Business Daybusiness
day with the same force and effect as if made on such dates, and nothe due date. No additional
interest shallwill accrue as a result of such delayed payment.
Upon the request of the Holderholder of any Floating Rate Note,floating rate note, the Calculation
Agentcalculation
agent for such Notenote will provide the interest rate then in effect and, if
determined, the interest rate that will become effective on the next Interest
Reset Date with respect tointerest
reset date for such Floatingfloating rate note.
CD Rate Note.
CD RATE NOTESNotes. Each CD Rate Notenote will bear interest for each Interest Reset Periodinterest
reset period at thean interest rate calculated with referenceequal to the CD Rate and the Spreadany spread or Spread
Multiplier, if any,spread
multiplier specified in such Notenote and in the applicable Pricing
Supplement.
Unless otherwise specified inpricing supplement.
The calculation agent will determine the applicable Pricing Supplement, the "CD
Rate" forCD Rate on each Interest Reset Period shall be the rate as ofCD Rate
determination date. The CD Rate determination date is the second Business
Daybusiness day
prior to the Interest Reset Dateinterest reset date for such Interest Reset Period (a "CD Rate
Determination Date")each interest reset period for negotiable
certificates of deposit having the Index
Maturityindex maturity designated in the applicable
Pricing Supplementpricing supplement as published in H.15(519) under the heading "CDs (Secondary
Market)."
InThe following procedures will be followed if the event that suchCD Rate cannot be
determined as described above.
- If the above rate is not published prior to 3:00 p.m., New York City
time, on the Calculation
Date (as defined below)calculation date pertaining to suchthe CD Rate Determination Date,determination
date, then the "CD Rate"CD Rate for such Interest Reset Periodinterest reset period will be the rate on
such CD Rate
Determination Datethat date for negotiable certificates of deposit of the Index Maturityindex maturity
designated in the applicable Pricing Supplementpricing supplement as published in Composite
Quotations under the heading "Certificates of Deposit."H.15
Daily Update.
- If by 3:00 p.m., New York City time, on such Calculation Date suchthe calculation date, the above
rate is not yet published in either H.15(519) or Composite Quotations,in the H.15 Daily
Update, then the "CD Rate" for such Interest
Reset Period will be calculated by the Calculation Agent for such CD Rate Note
and will be the arithmetic mean of the secondary
market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Datethat date
of three leading nonbank dealers in negotiable U.S. dollar certificates
of deposit in The
City of New York City selected by the Calculation Agent for such CD Rate Notecalculation agent for
negotiable certificates of deposit of major United States money center
banks of the highest credit standing, (inin the market for negotiable
certificates of deposit)deposit, with a remaining maturity closest to the Index Maturityindex
maturity designated in the Pricing Supplementpricing supplement in a denomination of
$5,000,000; PROVIDED, HOWEVER, that
if$5,000,000.
- If the dealers selected as aforesaid by such Calculation Agentthe calculation agent, however, are not
quoting offered rates as mentioned in thisthe preceding sentence, the "CD Rate"CD Rate
for such Interest
Reset Periodinterest reset period will be the same as the CD Rate for the
immediately preceding Interest Reset Period (or, ifinterest reset period. If there was no such
Interest Reset Period,interest reset period, the
Initial Interest Rate).
The "Calculation Date" pertaining to any CD Rate Determination Date shallwill be the tenth calendar day after suchinitial interest rate.
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50
CD Rate Determination Date or, if such day is
not a Business Day, the next succeeding Business Day.
CD Rate Notes,notes, like other Notes,notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER RATE NOTESCommercial Paper Rate Notes. Each Commercial Paper Rate Notenote will bear
interest for each Interest Reset
Periodinterest reset period at thean interest rate calculated with referenceequal to the
Commercial Paper Rate and the Spreadany spread or Spread Multiplier, if any,spread multiplier, specified in such
Notenote and in the applicable Pricing Supplement.
Unless otherwise specified inpricing supplement.
The calculation agent will determine the applicable Pricing Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent for such Commercial Paper Rate Note as ofon each
Commercial Paper Rate determination date. The Commercial Paper Rate
determination date is the second Business
Daybusiness day prior to the Interest Reset Dateinterest reset date
for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on sucheach interest reset period. The Commercial Paper Rate Determination Datewill be the money
market yield on that date of the rate for commercial paper S-10
having the Index Maturityindex
maturity specified in the applicable Pricing Supplement,pricing supplement, as such rate shallwill be
published in H.15(519) under the heading "Commercial Paper.Paper -- Nonfinancial."
InThe following procedures will be followed if the event thatCommercial Paper Rate
cannot be determined as described above.
- If such rate is not published prior to 3:00 p.m., New York City time, on
the Calculation Date (as defined below)calculation date pertaining to suchthe Commercial Paper Rate
Determination Date,determination date, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield on such Commercial Paper Rate Determination Datefor such interest
reset period will be the money market yield on that date of the rate for
commercial paper of the specified Index
Maturityindex maturity as published in Composite Quotationsthe H.15
Daily Update under the heading "Commercial Paper.Paper -- Nonfinancial."
- If by 3:00 p.m., New York City time, on such Calculation Date suchcalculation date, the above
rate is not yet published in either H.15(519) or Composite Quotations,in the H.15 Daily
Update, then the "CommercialCommercial Paper Rate"Rate for such Interest Reset Period shallinterest reset period
will be the Money Market
Yieldmoney market yield of the arithmetic mean of the offered
rates, as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Datethat date, of three
leading dealers of commercial paper in The City of New York City selected by the
Calculation
Agentcalculation agent for such Commercial Paper Rate Notenote for commercial
paper of the specified Index Maturityindex maturity placed for an industrial issuer
whose bonds are rated "AA" or the equivalent by a nationally recognized
rating agency; PROVIDED, HOWEVER, that ifagency.
- If the dealers selected as aforesaid by such Calculation Agentcalculation agent, however, are not
quoting offered rates as mentioned in thisthe preceding sentence, the
"CommercialCommercial Paper Rate"Rate for such Interest Reset Periodinterest reset period will be the same as
the Commercial Paper Rate for the immediately preceding Interest Reset Period (or, ifinterest reset
period. If there was no such Interest
Reset Period,interest reset period, the Initial Interest Rate).
"Money Market Yield" shallCommercial Paper
Rate will be athe initial interest rate.
Money market yield will be calculated in accordance with the
following formula:as follows:
DX360
Money Market Yield
D X 360
money market yield = ----------- X100
360-(DXM)------------- X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the specified Index Maturity.
The "Calculation Date" pertaining to any Commercial Paperindex maturity.
Federal Funds Rate Determination
Date shall be the tenth calendar day after such Commercial Paper Rate
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day.
FEDERAL FUNDS RATE NOTESNotes. Each Federal Funds Rate Notenote will bear interest
for each Interest Reset
Periodinterest reset period at thean interest rate calculated with referenceequal to the Federal Funds
Rate and the Spreadany spread or Spread Multiplier, if any,spread multiplier specified in such Notenote and in the
applicable Pricing Supplement.
Unless otherwise specified inpricing supplement.
The calculation agent will determine the applicable Pricing Supplement,Federal Funds Rate on each Federal
Funds Rate determination date. The Federal Funds Rate determination date is the
"Federalsecond business day prior to the interest reset date for such interest reset
period. The Federal Funds Rate" for each Interest Reset Period shallRate will be the effective rate
on the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published
in H.15(519) under the heading "Federal Funds (Effective)."
InThe following procedures will be followed if the event that suchFederal Funds Rate cannot
be determined as described above.
- If the above rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as
defined below)calculation date pertaining to suchthe Federal Funds Rate
Determination Date,determination date, the "FederalFederal Funds Rate"Rate for such Interest Reset Period shallinterest reset period
will be the rate on such
Federal Funds Rate Determination Datethat date as published in Composite Quotationsthe H.15 Daily Update under
the heading "Federal Funds/Effective Rate."
S-15
51
- If by 3:00 p.m., New York City time, on such Calculation Date suchcalculation date the above
rate is not yet published in either H.15(519) or Composite Quotations,in the H.15 Daily
Update, then the "FederalFederal Funds Rate"Rate for such Interest Reset
Period shallinterest reset period will
be the rate on such Federal Funds Rate Determination Date made
publicly available bythat date which the Federal Reserve Bank of New York whichmakes
publicly available that is equivalent to the rate which appears in
H.15(519) under the heading "Federal Funds (Effective);."
PROVIDED, HOWEVER, that if- If such rate, however, is not made publicly available by the Federal
Reserve Bank of New York by 3:00 p.m., New York City time, on such
Calculation Date,calculation date, the "FederalFederal Funds Rate"Rate for such S-11
Interest Reset Periodinterest reset period
will be the same as the Federal Funds Rate in effect for the immediately
preceding Interest Reset Period (or, ifinterest reset period. If there was no such Interest Reset Period,interest reset
period, the Initial Interest Rate).Federal Funds Rate will be the initial interest rate.
In the case of a Federal Funds Rate Notenote that resets daily, the interest
rate on such Notenote for the period from and including a Monday to but excluding
the succeeding Monday will be reset by the Calculation Agentcalculation agent for such Notenote on
such second Monday, (or,or, if not a Business Day,business day, on the next succeeding Business Day)business
day, to a rate equal to the average of the Federal Funds Rates in effect with respect tofor
each such day in such week.
The "Calculation Date" pertaining to any Federal Funds Rate Determination
Date shall be the next succeeding Business Day.
LIBOR NOTESNotes. Each LIBOR Notenote will bear interest for each Interest Reset Periodinterest reset
period at thean interest rate calculated with referenceequal to LIBOR and the Spreadany spread or Spread
Multiplier, if any,spread multiplier
specified in such Notenote and in the applicable Pricing
Supplement.
"LIBOR" forpricing supplement.
The calculation agent will determine LIBOR on each Interest Reset Period will be determined by the Calculation
Agent for such LIBOR Notes as follows:
(i) Ondetermination
date. The LIBOR determination date is the second London Banking Daybanking day prior to the
Interest Reset Dateinterest reset date for such Interest Reset Period (a "LIBOR Determination Date"),each interest reset period.
On a LIBOR determination date, the Calculation Agentcalculation agent will determine LIBOR
for such LIBOR Noteeach interest reset period as follows.
The calculation agent will determine the offered rates for deposits in the
Specified Currencyspecified currency for the period of the Index
Maturityindex maturity specified in the
applicable Pricing Supplement,pricing supplement, commencing on such Interest Reset Date,interest reset date, which
appearappears on the Designated"designated LIBOR Pagepage" at approximately 11:00 a.m., London time,
on such LIBOR Determination Date.that date.
- If "LIBOR Telerate" is designated in the applicable Pricing Supplement,
"Designatedpricing supplement,
"designated LIBOR Page"page" means the display designated as page "3750" on
the Bridge Telerate Service, (or such other page as may replaceand LIBOR will be the relevant offered rate
determined by the calculation agent. If page "3750" on such servicethe Bridge
Telerate Service is replaced by another page, or such other service as may be nominatedif the Bridge Telerate
Service is replaced by a nominee of the British Bankers' Association,
forthen "LIBOR Telerate" means the purpose of displayingreplacement page or service selected to
display the London interbank offered rates of major banks), and LIBOR for such Interest
Reset Period will be the relevant offered rate as determined by the
Calculation Agent.banks.
- If "LIBOR Reuters" is designated in the applicable Pricing Supplement, "Designatedpricing supplement,
"designated LIBOR Page"page" means the arithmetic mean determined by the
calculation agent of the two or more offered rates on the display
designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such other
page as may replaceService. If
the LIBO page on such service is replaced by another page, or such other service
as may be nominatedif the
Reuters Monitor Money Rates Service is replaced by a nominee of the
British Bankers' Association, forthen "LIBOR Reuters" means the purposearithmetic
mean determined by the calculation agent of displayingthe two or more offered rates
on the replacement page or service selected to display the London
interbank offered rates of major banks) provided
that at least two such offered rates appear on the Designated LIBOR
Page, in which case, "LIBOR" for such Interest Reset Period will be the
arithmetic mean of such offered rates as determined by the Calculation
Agent for such LIBOR Note.
(ii)banks.
If LIBOR cannot be determined on a LIBOR determination date as described
above, (either becausethen the Designatedcalculation agent will determine LIBOR Page is no longer available or because less than two rates appear
on page "LIBO" on the Reuters Monitor Money Rate Services) on such
LIBOR Determination Date, the Calculation Agentas follows.
- The calculation agent for such LIBOR Notenote will request the principal London offices of each ofselect four major banks
in the London interbank marketmarket.
- The calculation agent will request that the principal London offices
of those four selected by such Calculation Agent tobanks provide such Calculation Agent with itstheir offered quotations for deposits
in the Specified Currency for the period of the specified Index
Maturity, commencing on such Interest Reset Date, to prime
banks in the London interbank market at approximately 11:00 a.m.,
London time, on the LIBOR determination date. These quotations
S-16
52
shall be for deposits in the specified currency for the period of the
specified index maturity, commencing on such LIBOR Determination Date and ininterest reset date.
Offered quotations must be based on a principal amount equal to an
amount of not less thanat
least $1,000,000 or the approximate equivalent thereof in the Specified Currencyspecified
currency that is representative of a single transaction in such market
at such time.
(1) If at least two suchor more quotations are provided, "LIBOR"LIBOR for such Interest Reset Periodinterest reset
period will be the arithmetic mean of such quotations.
(2) If fewerless than two such quotations are provided, "LIBOR"the calculation agent will
select three major banks in New York City and follow the steps in the
two bullet points below.
- The calculation agent will then determine LIBOR for such Interest Reset Period will be
S-12
interest
reset period as the arithmetic mean of rates quoted by those three
major banks in The City of
New York selected by the Calculation Agent for such LIBOR NoteCity to leading European banks at
approximately 11:00 a.m., New York City time, on such LIBOR
Determination Datedetermination date. The rates quoted will be for loans in the
Specified Currency to leading
European banks,specified currency, for the period of the specified Index Maturity,index maturity,
commencing on such Interest Reset Date, and inthe interest reset date. Rates quoted must be based on a
principal amount equal
to an amount of not less thanat least $1,000,000 or the approximate equivalent
thereof in the Specified Currencyspecified currency that is representative of a single
transaction in such market at such time; PROVIDED, HOWEVER, that iftime.
- If fewer than three New York City banks selected as aforesaid by such Calculation Agentthe calculation
agent are quoting rates, as mentioned in this sentence, "LIBOR"LIBOR for such Interest Reset Periodinterest reset period will be
the same as LIBOR for the immediately preceding Interest Reset Period (or, ifinterest reset period. If
there was no such Interest
Reset Period,interest reset period, the Initial Interest Rate).
TREASURY RATE NOTESLIBOR Rate will be the
initial interest rate.
Treasury Rate Notes. Each Treasury Rate Notenote will bear interest for each
Interest Reset Periodinterest reset period at thean interest rate calculated with referenceequal to the Treasury Rate and the Spreadany
spread or Spread Multiplier, if any,spread multiplier, specified in such Notenote and in the applicable Pricing Supplement.pricing
supplement.
Treasury Rate Notes other than Constant Maturity Treasury Rate Notes
Unless "Constant Maturity" is specified or unless otherwise specified in the applicable Pricing Supplement,pricing
supplement, the "Treasury Rate"Treasury Rate for each Interest Reset
Periodinterest reset period will be the rate
for the auction held on the Treasury Rate Determination
Date (as defined below)determination date for such Interest Reset Periodinterest
reset period of treasury securities as such rate appears on either Telerate page
56 or Telerate page 57 under the heading "AVGE INVEST YIELD." Treasury
securities are direct obligations of the United States ("Treasury securities") havingthat have the Index Maturityindex
maturity specified in the applicable Pricing Supplement,pricing supplement.
If the Treasury Rate cannot be determined as such rate shalldescribed above, the following
procedures will be published in H.15(519)
under the heading "U.S. Government Securities-Treasury bills-auction average
(investment)" or,followed in the event that suchorder set forth below.
(1) If the Treasury rate is not published prior to 3:00 p.m.P.M., New York City
time on the Calculation Date (as defined below)calculation date pertaining to suchthe Treasury Rate
Determination Date,determination date, then the Treasury Rate for the interest reset
period will be the auction average rate (expressedon the Treasury Rate
determination date as otherwise announced by the United States
Department of the Treasury. The auction average rate will be expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) on such Treasury Rate Determination Date as otherwise
announced by the United States Department of the Treasury. In the event thatbasis.
(2) If the results of thesuch auction of Treasury securities having the specified Index
Maturity are not published or reported as
provided in (1) above by 3:00 p.m.P.M., New York City time, on such
Calculation Date,calculation date, or if no such auction is held on suchthe Treasury Rate
Determination Date,determination date, then the "Treasury Rate"Treasury Rate for such Interest
Reset Period shallinterest reset
period will be calculated by the Calculation Agentcalculation agent for such Treasury
Rate Note and shallnote. In this case, the Treasury Rate will be a yield to maturity
(expressedof the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on the Treasury Rate
determination date, of three leading primary United States government
securities dealers selected by the calculation agent for the issue of
treasury securities with a remaining maturity closest to the specified
index maturity. The yield to maturity will be expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis)
ofbasis.
S-17
53
(3) If the arithmetic mean of the secondary market bid rates, as of approximately
3:30 p.m., New York City time, on such Treasury Rate Determination Date, of
three leading primary United States government securities dealers selected by such Calculation Agent for the issue of Treasury securities with a remaining
maturity closest to the specified Index Maturity; provided, however, that if the
dealers selected as aforesaid by such Calculation Agentcalculation agent are not quoting bid
rates as mentioned in this sentence,(2) above, then the "Treasury Rate"Treasury Rate for such
Interest
Reset Periodinterest reset period will be the same as the Treasury Rate for the
immediately preceding Interest Reset Period (or, ifinterest reset period. If there was no such Interest Reset Period,preceding
interest reset period, the Initial Interest Rate).Treasury Rate will be the initial interest
rate.
The "TreasuryTreasury Rate Determination Date"determination date for each Interest Reset Periodinterest reset period will be
the day of the week in which the Interest Reset Dateinterest reset date for such Interest Reset
Periodinterest reset
period falls on which Treasurytreasury securities would normally be auctioned.
Treasury securities are normally sold at auction on Monday of each week
unless that day is a legal holiday, in whichholiday. In that case the auction is normally held on
the following Tuesday, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Rate Determination Datedetermination date
pertaining to the Interest Reset Periodinterest reset period commencing in the next succeeding week.
If an auction date shall fallfalls on any day that would otherwise be an Interest Reset Dateinterest reset
date for a Treasury Rate Note,note, then such Interest Reset Date shallthat interest reset date will instead be the
Business
Daybusiness day immediately following suchthe auction date.
S-13
Constant Maturity Treasury Rate Notes
If "Constant Maturity" is specified in the applicable Pricing Supplement,pricing supplement,
the "Treasury Rate"Treasury Rate for each Interest Reset Periodinterest reset period will be the rate that is set
forth indisplayed on
the designated CMT Telerate page under the caption ". . . Treasury Constant
Maturities . . . Federal Reserve Board publication H.15(519) oppositeRelease H.15 . . . Mondays Approximately
3:45 P.M.," under the caption
"U.S. Government/Securities/Treasury Constant Maturities/"column for the designated CMT maturity index in the
Index Maturity
with respect tofollowing manner.
- If the applicabledesignated CMT Telerate page is 7051, the Treasury Rate will be
the rate on the Constant Maturity Treasury Rate Determination
Date (as defined below).determination date.
- If the H.15(519)designated CMT Telerate page is not published,7052, the Treasury Rate shallwill be
the rate that was set forth on Telerate Page 7055,average for the week or its successor
page (as determined byfor the Calculation Agent), onmonth, as specified in the applicable
pricing supplement, ended immediately preceding the week or month, as
applicable, in which the related Constant Maturity Treasury Rate
Determination Date opposite the applicable Index
Maturity.determination date occurs.
If no such rate isdoes not appear on such designated CMT Telerate page as
indicated above, the following procedures will be followed in the order set
forth below.
(1) If the rate is no longer displayed on the relevant page or is not
displayed by 3:00 P.M., New York City time on the related calculation
date, then the Treasury Rate for such Interest
Reset Period shall be established by the Calculation Agent as follows: the
Calculation Agent will contact the Federal Reserve Board and request the
Treasury Rate, in the applicable Index Maturity, for the Constant Maturity Treasury Rate
Determination Date.determination date will be such Treasury Constant Maturity Rate for the
designated CMT maturity index as published in the relevant H.15(519).
(2) If this rate is no longer published or is not published by 3:00 P.M.,
New York City time, on the Federal Reserve Board does not provide
such information,related calculation date, then the Treasury
Rate on the Constant Maturity Treasury Rate determination date will be
the treasury constant maturity rate for the designated CMT maturity
index, or other United States Treasury rate for the designated CMT
maturity index, for the Constant Maturity Treasury Rate determination
date for such Interest Reset Dateinterest reset date as may then be published by either
the Board of Governors of the Federal Reserve System or the United
States Department of the Treasury. The calculation agent will make the
determination as to which of such rates is comparable to the rate
formerly displayed on the designated CMT Telerate page and published in
the relevant H.15(519).
(3) If this information is not provided by 3:00 P.M., New York City time,
on the related calculation date, then the calculation agent will
calculate the Treasury Rate on the Constant Maturity Treasury Rate
determination date as follows.
- The Treasury Rate will be a yield to maturity based on the arithmetic
mean of bid-side quotations, expressed in termsthe secondary market closing offer side prices as of
yield,approximately 3:30 P.M., New York City time, on the Constant Maturity
Treasury Rate determination date reported, according to their written
records, by three leading U.S. government securities dealers (one or morein New
York City, for Treasury
S-18
54
notes. The Treasury notes will be the most recently issued direct
noncallable fixed rate obligations of the United States, with an
original maturity of approximately the designated CMT maturity index
and a remaining term to maturity of not less than such designated CMT
maturity index minus one year.
- The three government securities dealers referenced above will be
identified from five such dealers who are selected by the calculation
agent, one of which may be an Agent (as defined herein)), accordingthe agent, by eliminating the dealers with
the highest and lowest quotations, or in the event of equality, one of
the highest and/or lowest quotation, as the case may require.
- If three or four, but not five, of such dealers provide quotations as
described above, then the Constant Maturity Treasury Rate will be
based on the arithmetic mean of the offer prices obtained and neither
the highest nor the lowest of such quotes will be eliminated.
(4) If the calculation agent is unable to their written records,obtain three such Treasury note
quotations as described in (3) above, the Treasury Rate on such
Constant Maturity Treasury Rate determination date will be calculated
by the calculation agent as follows.
- The rate will be a yield to maturity based on the arithmetic mean of
the secondary market closing offer side prices as of approximately
3:00 p.m. (New30 P.M., New York City time)time, on the Constant Maturity Treasury Rate
Determination Date,determination date reported, according to their written records, by
three leading U.S. government securities dealers in New York City, for
Treasury notes with an original maturity of the number of years that
is the next highest to the designated CMT maturity index and a
remaining maturity closest to the index maturity specified in the
applicable pricing supplement, and in an amount that is representative
for a single transaction in that market at that time.
- If two Treasury notes with an original maturity, as described above,
have remaining terms to maturity equally close to the designated CMT
maturity index, the calculation agent will obtain quotations for the
noncallable U.S. Treasury Note that is nearest innote with the shorter remaining term to maturity to the Index Maturity, but not less than exactly the Index Maturity and for the noncallable U.S. Treasury Note that is nearest in maturitywill use
such quotations to the Index
Maturity, but not more than exactly the Index Maturity. The Calculation Agent
shall calculate the Treasury Rate as set forth above.
- The three government securities dealers referenced above will be
identified from five such dealers who are selected by interpolating to the Index Maturity based
on an actual/actual date count basis,calculation
agent, one of which may be the yield onagent, by eliminating the two Treasury Notes
selected.dealers with
the highest and lowest quotations, or in the event of equality, one of
the highest and/or lowest quotation, as the case may require.
- If the Calculation Agent cannot obtain three or four, but not five, of such adjusteddealers provide quotations as
described above, then the Treasury Rate for such Interest Reset Date will be based on the
arithmetic mean of allthe offer prices obtained and neither the highest
nor the lowest of such quotations, or if only one such quotation is obtained, such quotation,
obtainedquotes will be eliminated.
(5) If fewer than three dealers selected by the Calculation Agent. In all events,calculation agent provide
quotations as described in (4) above, the Calculation Agent shall
continue polling dealers until at least one adjusted yield quotation can be
determined.
"TheTreasury Rate determined as
of the Constant Maturity Treasury Rate Determination Date" shalldetermination date will be the
tenth
Business DayTreasury Rate in effect on such Constant Maturity Treasury Rate
determination date.
"Designated CMT Telerate page" means the display on the Bridge Telerate
Service, or any successor service on the page specified in the applicable
pricing supplement, or any other page as may replace such page on that service,
or any successor service, for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable pricing supplement, the designated CMT Telerate page will be 7052,
for the most recent week.
"Designated CMT maturity index" means the original period to maturity of
the U.S. Treasury securities, either one, two, three, five, seven, ten, twenty
or thirty years, specified in the applicable pricing supplement for which the
Treasury Rate will be calculated. If no such maturity is specified in the
applicable pricing supplement, the designated CMT maturity index will be two
years.
S-19
55
The "Constant Maturity Treasury Rate determination date" will be the second
business day prior to the Interest Reset Dateinterest reset date for the applicable Interest Reset
Period.interest reset
period.
The Treasury constant maturity rateCMT Rate for a Treasury security maturity (the
"CMT Rate") as published in H.15(519) as of any
Business Daybusiness day is intended to be indicative of the yield of a U.S. Treasury
security having as of such Business
Daybusiness day a remaining term to maturity equivalent
to such maturity. The CMT Rate as of any Business Daybusiness day is based upon an
interpolation by the U.S. Treasury of the daily yield curve of outstanding
Treasury securities. This yield curve, which relates the yield on a security to
its time to maturity, is based on the over-the-counter market bid yields on
actively traded Treasury securities. Such yields are calculated from composites
of quotations reported by leading U.S. government securities dealers, which may
include one or more of the Calculation
Agentscalculation agents or other affiliates of the Company.Citigroup.
Certain constant maturity yield values are read from the yield curve. Such
interpolation from the yield curve provides a theoretical yield for a Treasury
security having ten years to maturity, for example, even if no outstanding
Treasury security has as of such date exactly ten years remaining to maturity.
The "Calculation Date" pertaining to any Treasury Rate Determination Date or
Constant Maturity Treasury Rate Determination Date, as applicable, shall be the
tenth calendar day after such Treasury Rate Determination Date or Constant
Maturity Rate Determination Date, as applicable, or, if such a day is not a
Business Day, the next succeeding Business Day.
PRIME RATE NOTES
Prime Rate NotesNotes. Prime Rate notes will bear interest at the interest rates (calculated with
referencea rate equal to
the Prime Rate and the Spreadany spread or Spread Multiplier, if any)spread multiplier specified in the Prime Rate
Notesnotes and in the applicable Pricing Supplement.
S-14
Unless otherwise indicated inpricing supplement.
The calculation agent will determine the applicable Pricing Supplement, the "Prime
Rate"Prime Rate for each Interest Reset Period will be determined by the Calculation Agent
for suchinterest reset
period on each Prime Rate Note as ofdetermination date. The Prime Rate determination date
is the second Business Daybusiness day prior to the Interest
Reset Dateinterest reset date for such Interest Reset Period (a "Primeeach interest
reset period. The Prime Rate Determination Date")
and shallwill be the rate made available and subsequently
published on suchthat date in H.15(519) under the heading "Bank Prime Loan."
InThe following procedures will be followed if the eventPrime Rate cannot be
determined as described above.
- If the rate is not published prior to 9:00 A.M., New York City time, on
the related calculation date, then the Prime Rate will be the rate on the
Prime Rate determination date that suchis published in the H.15 Daily Update
under the heading "Bank Prime Loan."
- If the rate hasis not been made availablepublished prior to 3:00 P.M., New York City time, on
the Calculation Date (as defined below) pertaining to such Prime Rate Determination
Date,related calculation date, in either of those sources, then the Prime
Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appearsappear on
the Reuters Screen NYMFUSPRIME1 Page (as defined below) as such bank's prime rate or base
lending rate as in effect for suchthe Prime Rate Determination Date.determination date.
- If fewer than four such rates but more than one such rate appear on the Reuters Screen NYMFUSPRIME1 Page,
forthen the calculation agent will select four major banks in New York City.
The Prime Rate Determination Date, the rate shallwill be the arithmetic mean of the prime rates quoted by
those four banks on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on the Prime Rate
determination date.
- If all four of the banks selected by the calculation agent do not provide
quotations, then the Prime Rate will be the arithmetic mean of four prime
rates quoted on the basis of the actual number of days in the year
divided by 360a 360-day year as of the close of business on such Prime Rate
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate
determination date. These Prime Rate quotes will be calculatedprovided by the
Calculation
Agentselected banks and will be the arithmetic meanby a reasonable number of the prime rates quoted in The City of
New York on such Prime Rate Determination Date by at least three substitute domestic banks or
trust companies organized and doing business underthat the laws of the
United States, or any State thereof, havingcalculation agent will select that have total
equity capital of at least U.S. $500,000,000 and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to provide such rate or
rates; PROVIDED, HOWEVER, that if$500,000,000.
- If the banks or trust companies selectedthat the calculation agent selects do not
provide quotations as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence,described above, then the Prime Rate with respect to such Prime Rate Determination Date will beremain
the same as the Prime Rate in effect on suchthe Prime Rate Determination Date.determination
date.
"Reuters Screen NYMF Page"USPRIME1 page" means the display designated as page
"NYMF""USPRIME1" on the Reuters Monitor Money Rates Service, (or such otheror any successor service
or page, as may replace the NYMF page on
that service for the purpose of displaying prime rates or base lending rates of
major United States banks).
The "Calculation Date" pertaining to any Prime Rate Determination Date shall
be the tenth calendar day after such Prime Rate Determination Date or, if such
day is not a Business Day, the next succeeding Business Day.
J.J. KENNY RATE NOTESbanks.
J.J. Kenny Rate NotesNotes. J.J. Kenny Rate notes will bear interest at the
interest rates, (calculated
by reference tocalculated based on the J.J. Kenny Rate and the Spreadany spread and/or
Spread Multiplier, if
any)spread multiplier specified in the J.J. Kenny Rate Notesnotes and in the applicable
Pricing
Supplement.
Unless otherwise indicated in an applicable Pricing Supplement,pricing supplement.
S-20
56
The calculation agent will determine the "J.J.
Kenny Rate" for each Interest Reset Period will be determined by the Calculation
Agent for such J.J. Kenny Rate Note as ofon each J.J. Kenny
Rate determination date. The J.J. Kenny Rate determination date is the second
Business Daybusiness day prior to the Interest Reset Dateinterest reset date for such Interest Reset Period (a "J.J.each interest reset period.
The J.J. Kenny Rate Determination Date") and shallwill be the per annum rate on such date equal to the
index made available and subsequently published by Kenny Information Systems or
its successor,successor. Such rate will be based upon 30-day yield evaluations at par of
bonds of not less than five "high grade" component issuers. The bonds evaluated
will be bonds on which the interest
on which is excludable from gross income for federal
income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), of not less than
five "high grade" component1986. Kenny Information
Systems will select such issuers selected from time to time, by Kenny
Information Systems, including without limitation, issuers of general
obligation bonds; PROVIDED, HOWEVER, thatbonds. However, the bonds on which the index is based shallwill not
include any bonds the interest on which is subject tomay trigger an "alternate minimum tax"
or similar tax under the Code, unless such tax may be imposed on all tax-exempt
bonds are subject to such
tax.bonds.
The following procedure will be followed if the J.J. Kenny Rate cannot be
determined as described above.
If such rate is not made available by 3:00 P.M., New York City time, on the
Calculation Date (as defined below)calculation date pertaining to such J.J. Kenny Rate Determination Date,determination date, the J.J.
Kenny Rate shallwill be the rate quoted by a successor indexing agent selected by
the Company equalingCitigroup. This rate will be equal to the prevailing rate for bonds ratedincluded in
the highest short-term rating category by Moody's Investors Service, Inc. and
Standard & S-15
Poor's Corporation in respect offor issuers selected by such successor indexing
agent most closely resembling the "high grade" component issuers selected by
Kenny Information SystemsSystems. The bonds for which rates are quoted will be bonds
that are subject to tendermay be tendered by thetheir holders thereof for purchase on not more than seven days'
notice and the interest on whichwhich:
- is (A) variable on a weekly basis, (B)basis;
- is excludable from gross income for federal income tax purposes under the
Code,Code; and
(C)- does not subjectgive rise to an "alternate minimum tax" or similar tax under the
Code, unless all tax-exempt bonds are subjectgive rise to such tax; PROVIDED, HOWEVER, thata tax.
However, if a successor indexing agent is not available, the J.J. Kenny Rate with respect to suchon
the J.J. Kenny Rate Determination Datedetermination date will be the J.J. Kenny Rate for the
immediately preceding Interest Reset Period (or, ifinterest reset period. If there was no such Interest Reset Period,interest reset
period, the Initial Interest Rate).
The "Calculation Date" pertaining to any J.J. Kenny Rate Determination Date
shallwill be the tenth calendar day after such J.J. Kenny Rate Determination Date
or, if such day is not a Business Day, the next succeeding Business Day.
ELEVENTH DISTRICT COST OF FUNDS RATE NOTESinitial interest rate.
Eleventh District Cost of Funds Rate NotesNotes. Eleventh District Cost of
Funds Rate notes will bear interest at the interest rates, (calculated by reference tocalculated based on
the Eleventh District Cost of Funds Rate and the Spreadany spread and/or Spread Multiplier, if any)spread
multiplier, specified in the Eleventh District Cost of Funds Rate Notesnotes and in the
applicable Pricing Supplement.
Unless otherwise indicated in an applicable Pricing Supplement,pricing supplement.
The calculation agent will determine the
"Eleventh District Cost of Funds Rate" for each Interest Reset Period will be
determined by the Calculation Agent for such Eleventh District Cost of Funds
Rate Note ason each Eleventh District Cost of Funds Rate determination date. The
Eleventh District Cost of Funds Rate determination date is the last working day
of the month immediately prior to such
Interest Reset Dateeach interest reset date for such Interest Reset Periodeach interest
reset period on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the
Eleventh District Cost of Funds Index (as defined below) (the "EleventhIndex.
The Eleventh District Cost of Funds Rate Determination Date"), and shallwill be the rate equal to the
monthly weighted average cost of funds for the calendar month preceding such
Eleventh District Cost of Funds Rate Determination Datedetermination date as set forth under the
caption "Eleventh District" on the Telerate Page 7058 (which page shall7058. Such page will be deemed
to include any successor page, (as determined by the Calculation Agent))calculation agent, as of 11:00
A.M., San Francisco time, on suchthe Eleventh District Cost of Funds Interest
Determination Date.Rate
determination date.
The following procedures will be followed if the Eleventh District Cost of
Funds Rate cannot be determined as described above.
- If suchthe rate does not appear on Telerate Pagepage 7058 on any related Eleventh
District Cost of Funds Rate Determination Date,determination date, the Eleventh District
Cost of Funds Rate for suchthe Eleventh District Cost of Funds Rate
Determination Date shalldetermination date will be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was
most recently announced (the "Eleventh District Cost of Funds Rate
Index") by
the FHLB of San Francisco as such cost of funds for the calendar month preceding
the date of such announcement.Index.
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57
- If the FHLB of San Francisco fails to announce such rate for the calendar
month next preceding such Eleventh District Cost of Funds Rate
Determination Date,determination date, then the Eleventh District Cost of Funds Rate for
such Eleventh District Cost of Funds Rate Determination Datedate will be the Eleventh District Cost of Funds Rate in effect on
such Eleventh District Cost of Funds Rate Determination Date.
INVERSE FLOATING RATE NOTES
Anydetermination date.
The "Eleventh District Cost of Funds Rate Index" will be the monthly
weighted average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that the FHLB of San Francisco most recently
announced as the cost of funds for the calendar month preceding the date of such
announcement.
EURIBOR Notes. Each EURIBOR note will bear interest for each interest
reset period at an interest rate equal to EURIBOR and any spread or spread
multiplier specified in such note and the applicable pricing supplement.
The calculation agent will determine EURIBOR on each EURIBOR determination
date. The EURIBOR determination date is the second TARGET business day prior to
the interest reset date for each interest reset period.
On a EURIBOR determination date, the calculation agent will determine
EURIBOR for each interest reset period as follows.
The calculation agent will determine the offered rates for deposits in
Euros for the period of the index maturity specified in the applicable pricing
supplement, commencing on such interest reset date, which appears on page 248 on
the Bridge Telerate Service or any successor service or any page that may
replace page 248 on that service which is commonly referred to as "Telerate Page
248" as of 11:00 a.m., Brussels time, on that date.
If EURIBOR cannot be determined on a EURIBOR determination date as
described above, then the calculation agent will determine EURIBOR as follows.
- The calculation agent for such EURIBOR note will select four major
banks in the Euro-zone interbank market.
- The calculation agent will request that the principal Euro-zone
offices of those four selected banks provide their offered quotations
to prime banks in the Euro-zone interbank market at approximately
11:00 a.m., Brussels time, on the EURIBOR determination date. These
quotations shall be for deposits in Euros for the period of the
specified index maturity, commencing on such interest reset date.
Offered quotations must be based on a principal amount equal to at
least $1,000,000 or the approximate equivalent in Euros that is
representative of a single transaction in such market at such time.
(1) If two or more quotations are provided, EURIBOR for such interest reset
period will be the arithmetic mean of such quotations.
(2) If less than two quotations are provided, the calculation agent will
select four major banks in the Euro-zone and follow the steps in the
two bullet points below.
- The calculation agent will then determine EURIBOR for such interest
reset period as the arithmetic mean of rates quoted by those four
major banks in the Euro-zone to leading European banks at
approximately 11:00 a.m., Brussels time, on such EURIBOR determination
date. The rates quoted will be for loans in Euros, for the period of
the specified index maturity, commencing on the interest reset date.
Rates quoted must be based on a principal amount of at least
$1,000,000 or the approximate equivalent in Euros that is
representative of a single transaction in such market at such time.
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58
- If the banks so selected by the calculation agent are not quoting
rates as described above, EURIBOR for such interest reset period will
be the same as for the immediately preceding interest reset period. If
there was no such interest reset period, EURIBOR will be the initial
interest rate.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the Treaty establishing
the European Community, as amended by the Treaty on European Union.
Inverse Floating Rate NoteNotes. Any floating rate note may be designated in
the applicable Pricing
Supplementpricing supplement as an "Inverse Floating Rate Note," in whichinverse floating rate note. In such an
event, unless otherwise specified in the applicable Pricing Supplement,pricing supplement, the
interest rate on such Floating Rate Notefloating rate note will be equal to (i)to:
- in the case of the period, if any, commencing on the Issue Date (orissue date, or the
date on which such Notenote otherwise begins to accrue interest (ifif different
from the Issue Date))issue date, up to the first Interest
Reset Date,interest reset date, a fixed rate of
interest established by the CompanyCitigroup as described in the applicable Pricing Supplementpricing
supplement; and
(ii)- in the case of each period commencing on an Interest Reset Date,interest reset date, a fixed
rate of interest specified in the Pricing
Supplementpricing supplement minus the interest
rate determined by reference tobased on the Base Ratebase rate as adjusted by the Spreadany spread and/or
Spread Multiplier, if any; PROVIDED, HOWEVER, that
(x)spread multiplier.
However, on any inverse floating rate note, (1) the interest rate thereon will not be
less than zero S-16
and (y)(2) the interest rate in effect for the ten days immediately
prior to the date of Maturitymaturity of such Inverse Floating Rate Noteinverse floating rate note will be that in
effect on the tenth day preceding such date.
FLOATING RATE/FIXED RATE NOTESFloating/Fixed Rate Notes. The applicable Pricing Supplementpricing supplement may provide
that a Notenote will be a Floating
Rate Notefloating rate note for a specified portion of its term and
a Fixed Rate Notefixed rate note for the remainder of its term, in whichterm. In such an event, the interest
rate on such Notenote will be determined as herein provided as if it were a Floating Rate Notefloating rate note and a
Fixed
Rate Note hereunderfixed rate note for each such respective period, all as specified in such
applicable Pricing Supplement.pricing supplement.
SUBSEQUENT INTEREST PERIODS
The Pricing Supplementpricing supplement relating to each Notenote will indicate whether
the
CompanyCitigroup has the option to reset the interest rate, (in the case of a Fixed Rate
Note) with respect to such Note or the Spread, Spread Multiplier,spread, spread
multiplier, or method of calculation, (inas the case of a Floating Rate Note) with respectmay be, for such note. If
Citigroup has the option to such Note and,
if so,reset, the pricing supplement will also indicate the
optional reset date or dates on which such interest rate or such Spread, Spread
Multiplier,spread, spread
multiplier, or method of calculation, as the case may be, may be reset (each an
"Optional Reset Date").
The Companyreset.
Citigroup shall notify the Trustee for a Notetrustee whether or not it intends to exercise
such option with respectrelating to such Notenote at least 45 but not more than 60 days prior to
an Optional Reset Dateoptional reset date for such Note.note. Not later than 40 days prior to such
Optional Reset Date,optional reset date, the Trustee for such Notetrustee will mail to the Holderholder of such Notenote a reset
notice (the "Reset Notice"), first class, postage prepaid, indicating whether the CompanyCitigroup has elected to
reset the interest rate, (in the
case of a Fixed Rate Note) or the Spread, Spread Multiplier or method of
calculation (in the case of a Floating Rate Note) and, if so, (i) such new
interest rate or such new Spread, Spread Multiplier,spread, spread multiplier or method of
calculation, as the case may be; and (ii)be.
If Citigroup elects to reset the interest rate, or the spread, spread
multiplier or method of calculation, as the case may be, the trustee will mail
to the holder in a manner described above a notice indicating such new interest
rate or such new spread, spread multiplier, or method of calculation, as the
case may be. The notice will also indicate any provisions if any, for redemption during
the subsequent interest period. The subsequent interest period is the period
from such Optional Reset Dateoptional reset date to the next Optional Reset Dateoptional reset date or, if there is no
such next Optional Reset Date,optional reset date, to the Stated Maturitystated maturity of such Note
(each such period a "Subsequent Interest Period"),note, including
the date or dates on which or the period or periods during which and the price
or prices at which such redemption may occur during such Subsequent Interest Period.subsequent interest
period.
Upon the transmittal by the Trusteetrustee of a Reset Noticereset notice to the Holderholder of a
Note,note, such new interest rate or such new Spread, Spread Multiplier,spread, spread multiplier, and/or
method of calculation as the case may be, shallwill take effect automatically, and, exceptautomatically. Except
as modified by the Reset Noticereset notice and as described below, such Notenote will have the
same terms as prior to the transmittal of such Reset Notice.
Notwithstandingreset notice.
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59
Despite the foregoing, not later than 20 days prior to an Optional
Reset Dateoptional reset
date for a Note, the Companynote, Citigroup may, at its option, revoke the interest rate, (in the case of a Fixed Rate Note) or the
Spreadspread or Spread Multiplier (in the
case of a Floating Rate Note)spread multiplier, provided for in the Reset Notice with respectreset notice relating to such
Optional Reset Dateoptional reset date and establish a higher interest rate, (in the case of a
Fixed Rate Note) or a higher Spreadspread or
Spread Multiplier (in the case of a
Floating Rate Note)spread multiplier, as applicable, for the Subsequent Interest Periodsubsequent interest period commencing
on such Optional Reset Dateoptional reset date.
Citigroup can make such revocations by causing the Trusteetrustee for such Notenote to
mail notice of such higher interest rate or higher Spreadspread or Spread Multiplier,spread multiplier,
as the case may be, first class, postage prepaid, to the Holderholder of such Note.note.
Such notice shall be irrevocable. All Notes with respect tonotes for which the interest rate or
Spreadspread or Spread Multiplierspread multiplier is reset on an Optional Reset Dateoptional reset date will bear such
higher interest rate, (inor higher spread or spread multiplier, as the case of Fixed Rate Notes) or higher Spread or Spread
Multiplier (in the case of Floating Rate Notes),may be,
whether or not tendered for repayment.
The Holderholder of a Notenote will have the option to elect repayment of such Notenote
by the CompanyCitigroup on each Optional Reset Dateoptional reset date at a price equal to the principal
amount thereof,of such note plus interest accrued to such Optional Reset Date.optional reset date. In order
for a Notenote to be repaid on an Optional Reset Date,optional reset date, the Holder thereofholder of such note must
follow the procedures set forth below under "Optional Redemption, Repayment and
Repurchase" for optional repayment, except thatrepayment. However, the period for delivery of such
Notenote or notification to S-17
the Trusteetrustee for such Note shallnote will be at least 25 but not
more than 35 days prior to such Optional Reset Date, and except thatoptional reset date. Further, a Holderholder who has
tendered a Notenote for repayment pursuant to a Reset Noticereset notice may, by written notice
to the Trusteetrustee for such Note,note, revoke any such tender for repayment until the
close of business on the tenth day prior to such Optional Reset Date.optional reset date.
AMORTIZING NOTES
The CompanyCitigroup may from time to time offer Notes ("Amortizing Notes")amortizing notes on which a portion
or all the principal amount is payable prior to Stated Maturitystated maturity
- in accordance with a schedule,schedule;
- by application of a formula,formula; or
by reference to- based on an Index (as defined below).index.
Further information concerning additional terms and conditions of any Amortizing Notes,amortizing
notes, including terms for repayment thereof,of such notes, will be set forth in the
applicable Pricing Supplement.pricing supplement.
INDEXED NOTES
The CompanyCitigroup may from time to time offer Indexed Notesindexed notes on which certainsome or all
interest payments, (inin the case of an "Indexed Rate Note"),indexed rate note, and/or the principal
amount payable at Stated Maturitystated maturity or earlier redemption or retirement, (inin the
case of an "Indexed Principal Note"),indexed principal note, is determined by reference tobased on:
- the principal amount of such Notes (or,notes or, in the case of an Indexed Principal Note, toindexed
principal note, the amount designated in the applicable Pricing Supplementpricing
supplement as the "Face Amount""face amount" of such Indexed Note)indexed note; and
by reference to- an index, which may be based on
(1) prices, changes in prices, or differences between prices, of
securities, currencies, intangibles, goods, articles or
commodities or bycommodities;
(2) the application of a formulaformula; or
by(3) an index which shall be such other objective price, economic or
other measures as are described in the applicable Pricing Supplement (any such measure or measures, an "Index").pricing
supplement.
A description of the Indexindex used in any determination of an interest or principal
payment, and the method or formula by which interest or principal payments will
be determined by
reference tobased on such Index,index, will be set forth in the applicable Pricing Supplement.
In the case ofpricing
supplement.
If a Fixed Rate Note, Floating Rate Notefixed rate note, floating rate note or Indexed Rate Note
thatindexed rate note is also an
Indexed Principal Note,indexed principal note, the amount of any interest payment will be determined
by reference tobased on the Face Amountface amount of such Indexed Noteindexed note unless
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60
specified otherwise in the applicable Pricing Supplement. In the case ofpricing supplement. If an Indexed Principal Note,indexed note is
also an indexed principal note, the principal amount payable at Stated Maturitystated maturity
or any earlier redemption or repayment of the Indexed Noteindexed note may be different from
the Face Amount.face amount.
If the determination of the Index on which any interest payment or the
principal amount of an Indexed Note is calculated or announced by a third party which may beis appointed to calculate or announce the Agent or another affiliate ofindex for a
particular indexed note, and the Company, and such third party either (1) suspends the calculation
or announcement of such Indexindex or (2) changes the basis upon which such Indexindex is
calculated (other than changes consistentin a manner that is inconsistent with
policies in effect at the time such Indexed Note was issued and permitted
changes described in the applicable Pricing Supplement),pricing
supplement, then such Index shallCitigroup will select another third party to calculate or
announce the index. The agent or another affiliate of Citigroup may be calculated for purposes of such Indexed Note by anothereither
the original or successor third party selected by the Company, which may be the Agent or another affiliate of the Company,
subject to the same conditions and controls as applied to the original third
party.Citigroup.
If for any reason such Indexindex cannot be calculated on the same basis and
subject to the same conditions and controls as applied to the original third
party, then theany indexed interest payments if any, or any indexed principal amount of
such Indexed Note shallindexed note will be calculated in the manner set forth in the applicable
Pricing Supplement.pricing supplement. Any determination of suchby the selected third party shall, in
the absence of manifest error,will be
binding on all parties.parties, except in the case of an obvious error.
Unless otherwise specified in the applicable Pricing Supplement, (i)pricing supplement, for the
purpose of determining whether Holdersholders of the requisite principal amount of
Notesnotes outstanding under the applicable Indentureindenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
Indexed Notesindexed notes will be deemed to be the Face Amount thereof, and (ii)face amount stated on such notes. Unless
otherwise specified in the applicable pricing supplement, in the event of an
acceleration of the Stated Maturitystated maturity of an Indexed Note,indexed note, the principal amount
payable to the Holderholder of such Notenote upon acceleration will be the principal
amount determined by reference tobased on the formula by
S-18
whichused to determine the principal amount of
such Note would be determinednote on the Stated
Maturity thereof,stated maturity of such note, as if the date of acceleration
were the Stated Maturity.stated maturity.
An investment in Indexed Notes entailsindexed notes has significant risks, including wide
fluctuations in market value as well as in the amounts of payments due,
thereunder, that are
not associated with a similar investment in a conventional debt security. Such
risks depend on a number of factors including supply and demand for the
particular security, currency, commodity or other good or article to which the
Notenote is indexed and economic and political events over which the
CompanyCitigroup has no
control.
Fluctuations in the price of any particular security or commodity, in the
rates of exchange between particular currencies or in particular indices that
have occurred in the past are not necessarily indicative, however, of
fluctuations in the price or rates of exchange that may occur during the term of
any Indexed Notes.indexed notes. Accordingly, prospective investors should consult their own
financial and legal advisors as to the risks entailed
byof investment in Indexed Notes.indexed notes.
DUAL CURRENCY NOTES
The CompanyCitigroup may from time to time offer Notes (the "Dual Currency Notes") as
todual currency notes on which
the CompanyCitigroup has a one time option of making all payments of principal, any premium
and interest on such notes which are issued on the same day and have the same
terms, the payments on which would otherwise be made in the specified currency
of such notes, in the optional payment currency specified in the applicable
pricing supplement. Such option will be exercisable in whole but not in part on
an option election date, which will be any one of the dates specified in the
applicable Pricing Supplement (each an "Option Election Date")
in whole, but not in part, with respect to all Dual Currency Notes issued on the
same day and having the same terms (a "Tranche"), of thereafter making all
payments of principal, premium, if any, and interest (which payments would
otherwise be made in the Specified Currency of such Notes) in the optional
currency specified in the applicable Pricing Supplement (the "Optional Payment
Currency").pricing supplement. Information as to the relative value of the
Specified Currencyspecified currency compared to the Optional Payment Currencyoptional payment currency will be set forth
in the applicable Pricing Supplement.pricing supplement.
The Pricing Supplementpricing supplement for each issuance of Dual Currency Notesdual currency notes will
specify, among other things,
- the Specified Currencyspecified currency;
- the optional payment currency; and
Optional Payment
Currency of such issuance and- the Designated Exchange Rate for such issuance,
whichdesignated exchange rate.
Such designated exchange rate will be a fixed exchange rate used for
converting amounts denominated in the Specified Currencyspecified currency into amounts
denominated in the Optional Payment Currency
(the "Designated Exchange Rate").optional payment currency. The Pricing Supplementpricing supplement will also
specify the Option Election Datesoption election dates and Interest Payment Datesinterest payment dates for the related
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issuance of Dual Currency Notes.dual currency notes. Each Option Election Dateoption election date will be a certainparticular
number of days before an Interest Payment Dateinterest payment date or Stated Maturity,stated maturity, as set forth
in the applicable Pricing Supplement, andpricing supplement. Each option election date will be the date
on which the CompanyCitigroup may select whether to make all scheduled payments due
thereafter in the Optional
Payment Currencyoptional payment currency rather than in the Specified Currency.specified
currency.
If the CompanyCitigroup makes such an election, the amount payable in the Optional
Payment Currency shalloptional
payment currency will be determined using the Designated Exchange Ratedesignated exchange rate specified
in the applicable Pricing Supplement.pricing supplement. If such election is made, notice of such
election shallwill be mailed in accordance with the terms of the applicable Tranchetranche
of Dual Currency Notesdual currency notes within two Business Daysbusiness days of the Option Election
Date and shalloption election date.
Such notice will state (i)(1) the first date, whether an Interest Payment Dateinterest payment date
and/or Stated Maturity, instated maturity, on which scheduled payments in the Optional Payment Currencyoptional payment
currency will be made and (ii)(2) the Designated Exchange Rate.designated exchange rate. Any such notice by
the
Company,Citigroup, once given, may not be withdrawn. The equivalent value in the
Specified
Currencyspecified currency of payments made after such an election may be less, at the
then current exchange rate, than if the CompanyCitigroup had made such payment in the
Specified Currency.specified currency.
For United States federal income tax purposes, holders of Dual Currency
Notesdual currency
notes may be subjectneed to comply with rules which differ from the general rules
applicable to holders of other types of Notesnotes offered hereby.by this prospectus
supplement. The United States federal income tax consequences of the purchase,
ownership and disposition of Dual Currency
Notesdual currency notes will be set forth in the
applicable Pricing Supplement.
S-19
pricing supplement.
RENEWABLE NOTES
The CompanyCitigroup may from time to time offer Notesrenewable notes, which will mature on
an Interest Payment Dateinitial maturity date. Such initial maturity date will be an interest payment
date specified in the applicable Pricing Supplementpricing supplement occurring in, or prior to,
the twelfth month following the Original Issue Dateoriginal issue date of such Notes
(the "Initial Maturity Date")notes, unless the
term of all or any portion of any such Note (a "Renewable Note")notes is renewed in accordance with the
procedures described below.
OnThe term of a renewable note may be extended to the Interest Payment Dateinterest payment date
occurring in the sixthtwelfth month, (unlessor, if a differentspecial election interval (the "Special Election Interval") is specified
in the applicable Pricing Supplement) prior to the Initial Maturity Date of a Renewable
Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in
each sixth month (or in the last month of each Special Election Interval) after
such Initial Renewal Date (each, together with the Initial Renewal Date, a
"Renewal Date"), the term of such Renewable Note may be extended to the Interest
Payment Date occurring in the twelfth month (or, if a Special Election Interval
is specified in the applicable Pricing Supplement,pricing supplement, the last month in a period equal to twice
the Special Election Interval)special election interval elected by the holder after such Renewal Date, ifrenewal date.
Such an extension may be made on the holderinitial renewal date. That date will be the
interest payment date occurring in the sixth month, unless a special election
interval is specified in the applicable pricing supplement, prior to the initial
maturity date of a renewable note and on the interest payment date occurring in
each sixth month, or in the last month of each special election interval, after
such Renewable Note elects to extendinitial renewal date which, together with the term of such Renewable Note
or any portion thereof as described below.initial renewal date,
constitutes a renewal date.
If a Holderholder does not elect to extend the term of any portion of the
principal amount of a Renewable Noterenewable note during the specified period prior to any
Renewal Date,renewal date, such portion will become due and payable on the Interest Payment Datenew maturity date.
Such new maturity date will be the interest payment date occurring in the sixth
month, (oror the last month in the Special Election Interval)special election interval, after such Renewal Date (the "New
Maturity Date").renewal
date.
A Holderholder of a Renewable Noterenewable note may elect to renew the term of such Renewable
Note,renewable
note, or if so specified in the applicable Pricing Supplement,pricing supplement, any portion thereof,of
such renewable note, by delivering a notice to such effect to the Trustee (ortrustee or any
duly appointed paying agent)agent at the corporate trust office of the Trusteetrustee or
agency of the Trusteetrustee in the City of New York City. Such notice will be delivered not less
than 15 nor more than 30 days prior to such Renewal Date (unlessrenewal date, unless another period
is specified in the applicable Pricing Supplementpricing supplement as the "Special Election Period").special election
period. Such election will be irrevocable and will be binding upon each
subsequent Holderholder of such Renewable
Note.renewable note.
An election to renew the term of a Renewable Noterenewable note may be exercised with
respect tofor less
than the entire principal amount of such Renewable Noterenewable note only if so specified in
the applicable Pricing Supplementpricing supplement and only in such principal amount, or any
integral multiple in excess thereof, asof such amount, that is specified in the applicable
Pricing Supplement. Notwithstandingpricing supplement. Despite the foregoing, the term of the Renewable Notesrenewable notes may
not be extended beyond the Stated Maturitystated maturity specified for such Renewable Notesrenewable notes in
the applicable Pricing Supplement.pricing supplement.
If the Holderholder does not elect to renew the term, such Renewable Noterenewable note must be
presented to the Trustee (ortrustee, or any duly appointed paying agent) and, with respect
to a Renewable Note thatagent. If such renewable
note is a certificate issued in definitive form, it must
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62
be presented to the trustee as soon as practicable following receipt of such
Renewable Note the Trustee (orrenewable note. The trustee, or any duly appointed paying agent) shallagent, will issue in
exchange thereforfor such note, in the name of such Holder (i)holder, a Note,note. The note will be in
a principal amount equal to the principal amount of such exchanged Renewable Noterenewable
note for which no election to renew thesuch term thereof was exercised, with terms
identical to those specified on such Renewable Note
(except thatrenewable note. However, such Note shallnote will
have a fixed, nonrenewable Stated Maturitystated maturity on the New Maturity Date) and (ii) ifnew maturity date.
If an election to renew is made with respect tofor less than the full principal amount of
a holder's renewable note, the trustee, or any duly appointed paying agent, will
issue in exchange for such holder's Renewable Note,note in the name of such holder, a replacement
Renewable Note,renewable note. The replacement renewable note will be in a principal amount
equal to the principal amount elected to be renewed of such exchanged Renewable Note for which the election to renew was made,renewable
note, with terms otherwise identical to such exchanged Renewable Notes.renewable note.
EXTENSION OF MATURITY
The Pricing Supplementpricing supplement relating to each Notenote will indicate whether
the
CompanyCitigroup has the option to extend the Stated Maturitystated maturity of such Notenote for an
extension period. Such an extension period is one or more periods of whole years from one to five
(each an "Extension Period")whole years, up to but not beyond the final maturity date (the "Final Maturity") set forth in such
Pricing
Supplement.
S-20
The Companypricing supplement.
Citigroup may exercise such option with respect tofor a Notenote by notifying the Trusteetrustee for
such Notenote at least 45 but not more than 60 days prior to the old Stated Maturitystated maturity
of such Note.note. Not later than 40 days prior to the old Stated
Maturitystated maturity of such
Note,note, the Trusteetrustee for such Notenote will mail to the Holderholder of such Note anote an
extension notice, (the "Extension Notice"), first class, postage prepaid. The Extension Noticeextension notice will set
forth (i)forth:
- the election of the CompanyCitigroup to extend the Stated Maturitystated maturity of such Note; (ii)note;
- the new Stated Maturity; (iii)stated maturity;
- in the case of a Fixed Rate Note,fixed rate note, the interest rate applicable to the
Extension Period or,extension period;
- in the case of a Floating Rate Note,floating rate note, the Spread, Spread Multiplierspread, spread multiplier or
method of calculation applicable to the Extension Period;extension period; and
(iv) the- any provisions if any, for redemption during the Extension Period,extension period, including the
date or dates on which, or the period or periods during which, and the
price or prices at which, such redemption may occur during the Extension Period.extension
period.
Upon the mailing by such Trusteetrustee of an Extension Noticeextension notice to the Holderholder of a
Note,note, the Stated Maturitystated maturity of such Note shallnote will be extended automatically, and,
except as modified by the Extension Noticeextension notice and as described in the next
paragraph, such Notenote will have the same terms as prior to the mailing of such
Extension Notice. Notwithstandingextension notice. Despite the foregoing, not later than 20 days prior to the old
Stated Maturitystated maturity of such Note,
the Companynote, Citigroup may, at its option, revoke the interest
rate, (inor the spread or spread multiplier, as the case may be, provided for in
the extension notice for such note and establish for the extension period a
higher interest rate, in the case of a Fixed
Rate Note)fixed rate note, or the Spreada higher spread or
Spread Multiplier (inspread multiplier, in the case of a Floating Rate
Note) provided for in the Extension Notice for such Note and establish a higher
interestfloating rate (in the case of a Fixed Rate Note) or a higher Spread or Spread
Multiplier (in the case of a Floating Rate Note) for the Extension Period,note.
Citigroup may so act by causing the Trusteetrustee for such Notenote to mail notice of
such higher interest rate or higher Spreadspread or Spread Multiplier,spread multiplier, as the case may
be, first class, postage prepaid, to the Holderholder of such Note.note. Such notice shallwill
be irrevocable. All Notes
with respect tonotes for which the Stated Maturitystated maturity is extended will bear
such higher interest rate, (inin the case of Fixed Rate Notes)fixed rate notes, or higher Spreadspread or
Spread
Multiplier (inspread multiplier, in the case of Floating Rate Notes)floating rate notes, for the Extension Period,extension period,
whether or not tendered for repayment.
If the CompanyCitigroup extends the Stated Maturitystated maturity of a Note,note, the Holderholder of such Notenote
will have the option to elect repayment of such Notenote by the CompanyCitigroup on the old
Stated Maturitystated maturity at a price equal to the principal amount thereof,of such note, plus
interest accrued to such date. In order for a Notenote to be repaid on the old
Stated Maturitystated maturity once the CompanyCitigroup has extended its stated maturity, the Stated Maturity thereof, the
Holder thereofholder of
such note must follow the procedures set forth below under "Optional Redemption,
Repayment and Repurchase" for optional repayment, except that therepayment. The period for delivery of
such Notenote or notification to the Trusteetrustee for such Note
shallnote will be at
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63
least 25 but not more than 35 days prior to the old Stated Maturity
and except that a Holderstated maturity. A holder
who has tendered a Notenote for repayment pursuant to an Extension Noticeextension notice may bygive
written notice to the Trusteetrustee for such Note,note to revoke any such tender for
repayment until the close of business on the tenth day before the old Stated Maturity.stated
maturity.
COMBINATION OF PROVISIONS
If so specified in the applicable Pricing Supplement,pricing supplement, any Notenote may be
subjectrequired to comply with all of the provisions, or any combination of the
provisions, described above under "Subsequent Interest Periods," "Extension of
Maturity" and "Renewable Notes."
BOOK-ENTRY SYSTEM
Upon issuance, and subject tounless the rules of the Depositary,DTC state otherwise, all Book-Entry
Notesbook-entry
notes having the same Original Issue Dateoriginal issue date and otherwise identical terms will be
represented by a single Global Security.global security. Each Global Securityglobal security representing
Book-Entry Notesbook-entry notes will be deposited with, or on behalf of, the Depositary,DTC and registered in
the name of a nominee of the Depositary. Book-Entry NotesDTC. Book-entry notes will not be exchangeable for
Certificated Notescertificated notes and, except under the circumstances described in the
Prospectusprospectus under "Description of Debt Securities--Global
Securities,"Book-Entry Procedures and Settlement," will not otherwise be
issuable as Certificated Notes.
The Depositary has advised the Company and the Agent as follows: The
Depositary is a limited-purpose trust company organized under New York Banking
Law, a "banking organization" within the meaning of New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation"
S-21
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agent), banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.certificated notes.
If an issue of Notesnotes is denominated in a currency other than the U.S.
dollar, the CompanyCitigroup will make payments of principal and any interest in the
foreign currency in which the Notesnotes are denominated (the "foreign currency") or in U.S. dollars. DTC has
elected to have all such payments of principal and interest in U.S. dollars
unless notified by any of its participants through which an interest in the
Notesnotes is held that it elects, in accordance with, and to the extent permitted
by, the applicable Pricing Supplementpricing supplement and the revelant Note,note, to receive such
payment of principal or interest in the foreign currency. On or prior to the
third Business Daybusiness day after the record date for payment of interest and twelve days
prior to the date for payment of principal, such participant shallwill notify DTC of
(i)(1) its election to receive all, or the specified portion, of such payment in
the foreign currency and (ii)(2) its instructions for wire transfer of such payment
to a foreign currency account.
A further description of the Depositary'sDTC's procedures with respect to Global
Securitiesregarding global securities
representing Book-Entry Notesbook-entry notes is set forth in the Prospectusprospectus under "Description of Debt Securities--Global Securities."Book-Entry
Procedures and Settlement." The DepositaryDTC has confirmed to Citigroup, the Company, the Agentagent and the
Trusteestrustee that it intends to follow such procedures.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplementpricing supplement relating to each Notenote will indicate either that (1)
such Notenote cannot be redeemed prior to its Stated Maturitystated maturity or (2) that such Notenote
will be redeemable at the option of the Company,Citigroup, in whole or in part, andpart. The
applicable pricing supplement will also indicate (1) the optional redemption
date or dates (each an "Optional Redemption Date") on which such Notenote may be redeemed and (2) the redemption price (the "Redemption Price") at
which, (togethertogether with accrued interest to such Optional Redemption Date)optional redemption date, such
Notenote may be redeemed on each such Optional Redemption Date.optional redemption date.
Unless otherwise specified in the applicable Pricing
Supplement,pricing supplement, at least
30 days prior to the date of redemption, such Trustee shalltrustee will mail notice of such
redemption, first class, postage prepaid, to the Holderholder of such Note.note. Unless
otherwise specified in the applicable Pricing Supplement, the
Companypricing supplement, Citigroup may exercise
such option with respectrelating to a redemption of a Notenote in part only by notifying the
Trusteetrustee for such Notenote at least 45 days prior to any Optional Redemption Date.optional redemption date. In
the event of redemption of a Notenote in part only, a new Notenote or Notesnotes for the
unredeemed portion thereof shallof such note or notes will be issued to the Holder thereofholder of such
note or notes upon the cancellation thereof.of such note or notes. The Notes (othernotes, other than
Amortizing
Notes) willamortizing notes, may not be subject to any sinking fund.redeemed.
The Pricing Supplementpricing supplement relating to each Notenote will also indicate whether the
Holderholder of such Notenote will have the option to elect repayment of such Notenote by
the
CompanyCitigroup prior to its Stated Maturity, and, ifstated maturity. If so, such Pricing Supplementpricing supplement will
specify (1) the optional repayment date or dates on which such Notenote may be
repaid (each an "Optional
Repayment Date") and (2) the optional repayment price. Such optional repayment price is
the price (the "Optional Repayment Price") at which, together
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64
with accrued interest to such Optional Repayment Date,optional repayment date, such Notenote may be repaid
on each such Optional Repayment Date.optional repayment date.
In order for a Notenote to be repaid, the Trusteetrustee for such Notenote must receive,
at least 30 but not more than 45 days prior to an Optional Repayment Date (i)optional repayment date:
(1) such Notenote with the form entitled "Option to S-22
Elect Repayment" on the
reverse thereofof such note duly completed,completed; or
(ii)(2) a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. (the "NASD") or a commercial bank or trust company in the United
States setting forthforth:
- the name of the Holderholder of such Note,note;
- the principal amount of such Notenote to be repaid,repaid;
- the certificate number or a description of the tenor and terms of such
Note,note;
- a statement that the option to elect repayment is being exercised therebyexercised; and
- a guarantee that the Notenote to be repaid with the form entitled "Option
to Elect Repayment" on the reverse of the Notenote duly completed will be
received by such Trusteetrustee not later than five Business Daysbusiness days after the
date of such telegram, telex, facsimile transmission or letter.
If the guarantee procedure described in clause (ii) of the preceding sentence(2) above is followed, then
such Notenote and form duly completed must be received by such Trusteethe trustee by such fifth
Business Day.business day. Any tender of a Notenote by the Holderholder for repayment, (exceptexcept pursuant
to a Reset Noticereset notice or an Extension Notice) shallextension notice, will be irrevocable. The repayment
option may be exercised by the Holderholder of a Notenote for less than the entire
principal amount of such Notenote, provided, that the principal amount of such Notenote
remaining outstanding after repayment is an authorized denomination. Upon such
partial repayment, such Note shallnote will be canceled and a new Notenote or Notesnotes for the
remaining principal amount thereof shallwill be issued in the name of the Holderholder of such
repaid Note.note.
If a Notenote is represented by a Global Security, the Depositary'sglobal security, DTC's nominee will be the
Holderholder of such Notenote and, therefore, will be the only entity that can exercise a
right to repayment. In order to ensure that the Depositary'sDTC's nominee will timely exercise a
right to repayment with respectrelating to a particular Note,note, the beneficial owner of such
Notenote must instruct the broker or other direct or indirect participant through
which it holds an interest in such Notenote to notify the DepositaryDTC of its desire to exercise
a right to repayment. Different firms have different cut-off times for accepting
instructions from their customers
and, accordingly,customers. Accordingly, each beneficial owner should
consult the broker or other direct or indirect participant through which it
holds an interest in a Notenote in order to ascertain the cut-off time by which such
an instruction must be given in order for timely notice to be delivered to the Depositary.
Notwithstanding anything in this Prospectus Supplement to the contrary, ifDTC.
If Citigroup redeems or repays a Notenote that is an OID Note (othernote other than an
Indexed Note), the amount payable on such
Note in the event of redemption or repaymentindexed note prior to its Stated Maturity (other
than pursuant to an optional redemption bystated maturity, then Citigroup will pay the Company at a stated Redemption
Price) shall beamortized
face amount of the Amortized Face Amount of such Notenote as of the date of redemption or the daterepayment regardless of
repayment, as the case may be.anything else stated in this prospectus. The Amortized Face
Amountpreceding sentence does not apply
if Citigroup chooses to redeem such notes.
The amortized face amount of a Notenote on any date shall bemeans the amount equal to (i)to:
- the Issue Priceissue price set forth on the face of the applicable Pricing Supplementpricing
supplement plus
(ii)- that portion of the difference between such Issue Pricethe issue price and the stated
principal amount of such Notethe note that has accrued by suchthat date at
(x)(1) the Bond Yieldbond yield to Maturitymaturity set forth on the face of the applicable
Pricing Supplementpricing supplement, or
(y)(2) if so specified in the applicable Pricing Supplement,pricing supplement, the Bond Yieldbond yield
to Callcall set forth on the face thereof (computed in each caseof the note.
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65
These computations will be made in accordance with generally accepted United
States bond yield computation principles), PROVIDED, HOWEVER, that in no
event shallprinciples. However, the Amortized Face Amountamortized face amount of
a Notenote will never exceed its stated principal amount. The Bond Yieldbond yield to Callcall
listed on the face of a Pricing Supplement shallpricing supplement will be computed on the basis ofof:
- the first occurring Optional Redemption Dateoptional redemption date with respect to such Notenote
and
- the amount payable on such Optional Redemption Date.optional redemption date.
In the event that any such Notenote is not redeemed on such first occurring Optional
Redemption Date,optional
redemption date, the Bond Yieldbond yield to Call with respectcall that applies to such Note shallnote will be
recomputed on such Optional Redemption Dateoptional redemption date on the basis of (1) the next
occurring Optional Redemption Dateoptional redemption date and (2) the amount payable on such Optional Redemption
Date, and shalloptional
redemption date. The bond yield to call will continue to be so recomputed on
each succeeding Optional
Redemption Dateoptional redemption date until the Notenote is so redeemed.
The CompanyCitigroup may at any time purchase Notesnotes at any price in the open market or
otherwise. Notes so purchased by the CompanyCitigroup may, at the discretion of the
Company,Citigroup,
be held, or resold or surrendered to the Trusteetrustee for such Notesnotes for cancellation.
S-23
OTHER PROVISIONS
AnyThe terms in the applicable pricing supplement may modify any provisions
with respect torelating to:
- the determination of an interest rate basis,basis;
- the specification of an interest rate basis,basis;
- calculation of the interest rate applicable to, or the principal payable
at Maturitymaturity on, any Note, its Interest
Payment Datesnote;
- interest payment dates; or
- any other matter relating thereto may be modified by the terms
as specified in the applicable Pricing Supplement.related matters.
DEFEASANCE
The defeasance provisions described in the Prospectusprospectus will not be
applicable to the Notes.
S-24
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in a Specified Currency other
than U.S. dollars ("Foreign Currency Notes") entails significant risks that are
not associated with a similar investment in a security denominated in U.S.
dollars. Similarly, an investment in an Indexed Note on which all or a part of
any payment due is determined by reference to a currency other than U.S. dollars
entails significant risks that are not associated with a similar investment in
non-Indexed Notes. Such risks include, without limitation, the possibility of
significant market changes in rates of exchange between U.S. dollars and such
Specified Currency, the possibility of significant changes in rates of exchange
between U.S. dollars and such Specified Currency resulting from official
redenomination with respect to such Specified Currency and the possibility of
the imposition or modification of foreign exchange controls by either the United
States or foreign governments. Such risks generally depend on factors over which
the Company has no control and which cannot be readily foreseen, suchnotes except as
economic and political events, and on the supply of and demand for the relevant
currencies. In recent years, rates of exchange between the U.S. dollar and
certain foreign currencies, and between certain foreign currencies and other
foreign currencies, have been volatile, and such volatility may be expected in
the future. Fluctuations that have occurred in any particular exchange rate in
the past are not necessarily indicative, however, of fluctuations that may occur
in the rate during the term of any Foreign Currency Note. Depreciation of the
Specified Currency of a Foreign Currency Note against U.S. dollars would result
in a decrease in the effective yield of such Foreign Currency Note below its
coupon rate and, in certain circumstances, could result in a substantial loss to
the investor on a U.S. dollar basis.
Governments have imposed from time to time, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency (other than U.S. dollars) at the time of payment of
principal of, or premium, if any, or interest on, a Foreign Currency Note. There
can be no assurance that exchange controls will not restrict or prohibit
payments of principal (and premium, if any) or interest in any such Specified
Currency. Even if there are no actual exchange controls, it is possible that
such Specified Currency would not be available to the Company when payments on
such Note are due because of circumstances beyond the control of the Company. In
any such event, the Company will make required payments in U.S. dollars on the
basis described herein. See "--Payment Currency" below and "Description of
Notes--Payment of Principal and Interest." Prospective purchasers should consult
their own financial and legal advisors as to the risks entailed by an investment
in Notes denominated in a currency other than U.S. dollars.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Notes who are United States residents, and the Company
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States with respect to any matters that may
affect the purchase or holding of, or receipt of payments of principal, premium
or interest in respect of, Notes. Such persons should consult their advisors
with regard to such matters. Any Pricing Supplement relating to Notes having a
Specified Currency other than U.S. dollars will contain a description of any
material exchange controls affecting such currency and any other required
information concerning such currency.
PAYMENT CURRENCY
Except as set forth below, if payment in respect of a Note is required to be
made in a Specified Currency other than U.S. dollars and such currency is
unavailable due to the imposition of exchange controls or other circumstances
beyond the Company's control or is no longer used by the government of the
country issuing such currency or for the settlement of transactions by public
institutions of or within the international banking community, then all payments
in respect of such Note shall be made in U.S. dollars until such currency is
again available or so used. The amounts so payable on any date in
S-25
such currency shall be converted into U.S. dollars on the basis of the most
recently available Market Exchange Rate for such currency or as otherwise
indicated in the applicable Pricing Supplement. Any payment in respect of such
Note made under such circumstances in U.S. dollars will not constitute an Event
of Default under the Indenture under which such Note shall have been issued.
In the event of an official redenomination of the Specified Currency of a
Note (other than as a result of European Monetary Union, but including, without
limitation, an official redenomination of any such Specified Currency that is a
composite currency), the obligations of the Company with respect to payments on
Notes denominated in such Specified Currency shall, in all cases, be deemed
immediately following such redenomination to provide for the payment of that
amount of redenominated currency representing the amount of such obligations
immediately before such redenomination. Notes will not provide for any
adjustment to any amount payable under such Notes as a result of (i) any change
in the value of the Specified Currency thereof relative to any other currency
due solely to fluctuations in exchange rates or (ii) any redenomination of any
component currency of any composite currency (unless such composite currency is
itself officially redenominated). The procedures described in this section shall
not apply in the event of European Monetary Union. For a description of the
procedure to be followed in connection with European Monetary Union, see
"European Monetary Union" in the Prospectus.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies, and vice versa. In addition, banks do
not generally offer non-U.S. dollar-denominated checking or savings account
facilities in the United States. Accordingly, payments on Notes made in a
currency other than U.S. dollars will be made from an account at a bank located
outside the United States unless otherwise specified in the applicable Pricing
Supplement.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the law of
the State of New York. Courts in the United States customarily have not rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. A 1987 amendment to the Judiciary Law of the State of New York provides,
however, that an action based upon an obligation denominated in a currency other
than U.S. dollars will be rendered in the foreign currency of the underlying
obligation and converted into U.S. dollars at the rate of exchange prevailing on
the date of the entry of the judgment or decree.
RISKS OF INDEXED NOTES
An investment in Indexed Notes may entail significant risks that are not
associated with a similar investment in a debt instrument that has a fixed
principal amount, is denominated in U.S. dollars and bears interest at either a
fixed rate or a floating rate determined by reference to nationally published
interest rate references. The risks of a particular Indexed Note will depend on
the terms of such Indexed Note, but may include, without limitation, the
possibility of significant changes in the prices of securities, currencies,
intangibles, goods, articles or commodities or of other objective price,
economic or other measures making up the relevant Index (the "Underlying
Assets"). Such risks generally depend on factors over which the Company has no
control and which cannot readily be foreseen, such as economic and political
events and the supply of and demand for the Underlying Assets. In recent years,
currency exchange rates and prices for various Underlying Assets have been
highly volatile, and such volatility may be expected in the future. Fluctuations
in any such rates or prices that have occurred in the past are not necessarily
indicative, however, of fluctuations that may occur during the term of any
Indexed Note.
In considering whether to purchase Indexed Notes, investors should be aware
that the calculation of amounts payable in respect of Indexed Notes may involve
reference to an Index determined by an
S-26prospectus
supplement.
S-30
affiliate of the Company or to prices which are published solely by third
parties or entities which are not subject to regulation under the laws of the
United States. The risk of loss as a result of the linkage of principal or
interest payments on Indexed Notes to an Index and to the Underlying Assets can
be substantial. Prospective purchasers should consult their own financial and
legal advisors as to the risks entailed by an investment in Indexed Notes.
CERTAIN66
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
INTRODUCTION
The following is a summary of certainthe material United States federal income tax
considerations that may be relevant to a holder of a Note.note. The summary is based
on laws, regulations, rulingson:
- laws;
- regulations;
- rulings; and
- decisions now in effect,
all of which are
subject tomay change, possibly with retroactive effect. This summary deals
only with holders that will hold Notesnotes as capital assets, andassets. This summary does not
address tax considerations applicable to investors that may be subject to whom special tax rules including, without limitation, banks,may
apply, including:
- banks;
- tax-exempt entities,entities;
- insurance companies,companies;
- regulated investment companies,companies;
- common trust funds orfunds;
- dealers in securities or currencies,currencies;
- persons that will hold Notesnotes as a part of an integrated investment,
(includingincluding a "straddle"straddle or "conversion transaction")conversion transaction, comprised of a Notenote and
one or more other positionspositions; or
persons- United States holders (as defined below) that have a "functional currency"functional currency
other than the U.S. dollar.
Any special United States federal income tax considerations relevant to a
particular issue of Notes,notes, including any Indexed Notes, Dual
Currency Notesindexed notes, dual currency notes or
Notesnotes providing for contingent payments, will be provided in the applicable
Pricing Supplement.pricing supplement. Purchasers of such Notesnotes should carefully examine the
applicable Pricing Supplementpricing supplement and should consult with their tax advisors with
respect to such Notes.notes.
Investors should consult their tax advisors in determining the tax
consequences to them of holding Notes,notes, including the application to their
particular situation of the United States federal income tax considerations
discussed below, as well as the application of state, local, foreign or other
tax laws.
As used herein,in this prospectus supplement, the term "UnitedUnited States holder"holder means
a person who is
- a citizen or resident of the United States, or that isStates;
- a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof,subdivision;
- an estate, the income of which is subject
toif United States federal income taxation is applicable to the
income of such estate regardless of its sourcesource; or
- a trust if (i) a U.S.United States court is able to exercise primary supervision
over the trust's administration and (ii) one or more United States persons
have the authority to control all of the trust's substantial decisions, and thedecisions.
The term "United States"non-United States holder means a holder who is not a United States
holder. The term United States means the United States of America, (includingincluding the
Statesfifty states and the District of Columbia).Columbia.
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67
UNITED STATES HOLDERS
PAYMENTS OF INTEREST
Payments of "qualifiedInterest
Payments of qualified stated interest" (asinterest, as defined below under "Original
Issue Discount")Discount," on a Notenote will be taxable to a United States holder as ordinary
interest income at the time that such payments are accrued or are received, (inin
accordance with the United States holder's method of tax accounting).accounting.
If such payments of interest are made with respectrelating to a Notenote that is
denominated in a Specified Currency other than the U.S. dollar (a "Foreign Currency Note"),foreign currency, the amount of interest income realized by a
United States holder that uses the cash method of tax accounting will be the
U.S. dollar value of the Specified Currencyspecified currency payment based on the spot rate of
exchange on the date of receipt regardless of whether the payment in fact is
converted into U.S. dollars. A United States holder that uses the accrual method
of tax accounting will accrue interest income on the Foreign Currency Noteforeign currency note in
the relevant foreign currency and translate the amount accrued into U.S. dollars
based onon:
- the average exchange rate in effect during the interest accrual period,
(oror portion thereof within such holder's taxable year),year; or
- at such holder's election, at the spot rate of exchange on (i)(1) the last
day of the accrual period, (oror the last day of the taxable year within
such accrual period if the accrual period spans more than one taxable
year),year, or (ii)(2) the date of receipt, if such date is within five business
days of the last day of the accrual period.
Such election must be applied consistently by the United States S-27
holder to all
debt instruments from year to year and can be changed only with the consent of
the Internal Revenue Service (the "IRS").IRS. A United States holder that uses the accrual method of tax accounting
will recognize foreign currency gain or loss, which will be treated as ordinary
income or loss, on the receipt of an interest payment made with respectrelating to a Foreign Currency Noteforeign
currency note if the spot rate of exchange on the date the payment is received
differs from the rate applicable to a previous accrual of that interest income.
PURCHASE, SALE AND RETIREMENT OF NOTESPurchase, Sale and Retirement of Notes
A United States holder's tax basis in a Notenote generally will equal the cost
of such Notenote to such holder
(1) increased by any amounts includible in income by the holder as original issue discount ("OID")OID and
market discount and
(2) reduced by any amortized premium (each as described below) and any payments other than payments
of qualified stated interest (as(each as described below) made on such
Note.note.
In the case of a Foreign Currency Note,foreign currency note, the cost of such Notenote to a United
States holder will generally be the U.S. dollar value of the foreign currency
purchase price on the date of purchase. In the case of a Foreign Currency Noteforeign currency note
that is traded on an established securities market, a United States holder
that uses the cash
method of tax accounting (and, if it so elects, a United States holder that uses
the accrual method of tax accounting) willgenerally should determine the U.S. dollar value of the cost of such Notenote by
translating the amount paid in foreign currency into its U.S. dollar value at
the spot rate of exchange (i) on the settlement date of the purchase.purchase in the case
of a United States holder using the cash method of tax accounting and (ii) on
the trade date, in the case of a United States holder using the accrual method
of tax accounting, unless such holder elects to use the spot rate applicable to
cash method United States holders. The amount of any subsequent adjustments to a
United States holder's tax basis in a Foreign Currency Noteforeign currency note in respect of OID,
market discount and premium denominated in a Specified Currencyspecified currency other than the
U.S. dollar will be determined in the manner described under "Original Issue
Discount," "Market Discount" and "Notes Purchased at a Premium" below. The
conversion of U.S. dollars to another Specified Currencyspecified currency and the immediate use
of such Specified Currencyspecified currency to purchase a Foreign Currency Noteforeign currency note generally will
not result in taxable gain or loss for a United States holder.
Upon the sale, exchange, retirement or retirement (collectively, a "disposition")other taxable disposition of a Note,note,
a United States holder generally will recognize gain or loss equal to the
difference between (1) the amount realized on the disposition, (lessless any accrued
qualified stated interest, which will be taxable as ordinary income)income, and (2) the
United States holder's adjusted tax basis in such Note.note. If a United States
holder receives a Specified Currencyspecified currency other than the U.S. dollar in respect of
thesuch disposition of a Note,note, the amount realized will be the U.S. dollar value of
the Specified Currencyspecified currency received calculated at the spot rate of exchange on the
date of disposition.disposition of the note.
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68
In the case of a Foreign Currency Noteforeign currency note that is traded on an established
securities market, a United States holder that usesreceives a specified currency
other than the U.S. dollar in respect of such disposition generally should
determine the amount realized (as determined on the trade date) by translating
that specified currency into its U.S. dollar value at the spot rate of exchange
(i) on the settlement date of the disposition in the case of a United States
holder using the cash method of tax accounting and if it so elects,(ii) on the trade date, in
the case of a United States holder that usesusing the accrual method of tax accounting,
will determine the U.S. dollar value of the
amount realized by translatingunless such amount atholder elects to use the spot rate of exchange on the
settlement date of the disposition.applicable to cash method United
States holders. The election available to accrual basis United States holders in
respect of the purchase and sale of Foreign Currency
Notesforeign currency notes traded on an
established securities market, discussed above, must be applied consistently by
the United States holder to all debt instruments from year to year and can be
changed only with the consent of the IRS.
Except as discussed below in connection with respect to market discount, Short-Term Notes
(as defined below) and foreign currency gain or loss,
market discount and short-term notes, gain or loss recognized by a United States
holder on the sale, exchange, retirement or other taxable disposition of a note
will generally be long term capital gain or loss if the United States holder's
holding period for the Notenote exceeded one year at the time of such disposition.
Gain or loss recognized by a United States holder on the sale, exchange,
retirement or other taxable disposition of a Foreign Currency Noteforeign currency note generally
will be treated as ordinary income or loss to the extent that the gain or loss
is attributable to changes in exchange rates during the period in which the
holder held such Note.
S-28
ORIGINAL ISSUE DISCOUNT
IN GENERAL.note.
Original Issue Discount
In General. Notes with a term greater than one year may be issued with OID
for United States federal income tax purposes ("purposes. Such notes are called OID Notes"). For United States
federal income tax purposes,notes
in this prospectus supplement. United States holders generally must accrue OID
in gross income over the term of the OID Notesnotes on a constant yield basis,
regardless of their regular method of tax accounting. As a result, United States
holders generally will recognize taxable income in respect of an OID Notenote in
advance of the receipt of cash attributable to such income.
OID generally will arise if the "statedstated redemption price at maturity"maturity of the
Notenote exceeds its "issue price"issue price by more than a DE MINIMISde minimis amount (0.25%of 0.25% of the
Note'snote's stated redemption price at maturity multiplied by the number of complete
years to maturity), ormaturity. OID may also arise if a Notenote has certainparticular interest payment
characteristics, (e.g.,such as interest holidays, interest payable in additional
securities or stepped interest).interest. For this purpose, the "issue price"issue price of a Notenote is
the first price at which a substantial amount of Notesnotes is sold for cash, (otherother
than to bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers), and the "statedwholesalers. The stated redemption
price at maturity"maturity of a Notenote is the sum of all payments due under the Note,note, other
than payments of "qualifiedqualified stated interest." The term "qualifiedqualified stated interest"interest
generally means stated interest that is unconditionally payable in cash or
property, (otherother than debt instruments of the issuer)issuer, at least annually during
the entire term of the OID Notenote at a single fixed rate of interest or, subject
to certainunder
particular conditions, based on one or more interest indices.
For each taxable year of a United States holder, the amount of OID that
must be included in gross income in respect of an OID Notenote will be the sum of
the daily portions of OID for each day during such taxable year (oror any portion
thereof)of such taxable year in which such a United States holder held the OID Note.note.
Such daily portions are determined by allocating to each day in an accrual
period a pro rata portion of the OID allocable to that accrual period. Accrual
periods may be of any length and may vary in length over the term of an OID
Note, provided that
suchnote. However, accrual period is noperiods may not be longer than one year and each
scheduled payment of principal or interest occursmust occur on the first day or the
final day of sucha period.
The amount of OID allocable to any accrual period generally will equal (1)
the product of the OID Note's "adjustednote's adjusted issue price"price at the beginning of such
accrual period multiplied by its yield to maturity (determined on the basis of
compounding at the close of each accrual period and properly(as adjusted forto take into
account the length of thesuch accrual period) and subtracting from that product, less (2) the amount, (if
any)if any, of
qualified stated interest allocable to that accrual period. The "adjustedadjusted issue
price"price of an OID Notenote at the beginning of any accrual period will equal the issue
price of the OID Note,note, as defined above, (1) increased by
S-33
69
previously accrued OID from prior accrual periods, and (2) reduced by any
payment made on such Note (othernote, other than payments of qualified stated interest)interest, on
or before the first day of the accrual period.
FOREIGN CURRENCY NOTES.Foreign Currency Notes. In the case of an OID Notenote that is also a Foreign
Currency Note,foreign
currency note, a United States holder should determine the U.S. dollar amount
includible in income as OID for each accrual period by
(a)- calculating the amount of OID allocable to each accrual period in the
Specified Currencyspecified currency using the constant-yield method described above and
(b)- translating the amount of the Specified Currencyspecified currency so derived at the
average exchange rate in effect during that accrual period, (oror portion thereofof
such accrual period within a United States holder's taxable year)year, or, at
the United States holder's election (as described above under "PAYMENTS
OF INTEREST""Payments
of Interest"), at the spot rate of exchange on (i)(1) the last day of the
accrual period, (oror the last day of the taxable year within such accrual
period if the accrual period spans more than one taxable year),year, or (ii)(2) on
the date of receipt, if such date is within five business days of the
last day of the accrual period.
All payments on an OID Note (othernote, other than payments of qualified stated interest)interest,
will generally be viewed first as payments of previously accrued OID, (toto the
extent thereof),thereof, with payments attributed first to the earliest accrued OID, and
then as payments of principal. Upon the receipt of an amount attributable to
OID, (whetherwhether in connection with a payment of an amount that is not qualified
stated interest or the disposition of the OID Note),note, a United States holder
S-29
will
recognize ordinary income or loss measured by the difference between (1) the
amount received (translatedand (2) the amount accrued. The amount received will be
translated into U.S. dollars at the spot rate of exchange on the date of receipt
or on the date of disposition of the OID Note, as the case
may be) and thenote. The amount accrued (usingwill be
determined by using the spot rate of exchange applicable to such previous
accrual).
ACQUISITION PREMIUM.accrual.
Acquisition Premium. A United States holder that purchases an OID Notenote for
an amount less than or equal to the sum of all amounts payable on the OID Note
after the purchase date other than payments of qualified stated interest (the
"remainingremaining redemption amount")amount, but in excess
of the OID Note'snote's adjusted issue price, (any such excess being "acquisition premium") generally is permitted to reduce the
daily portions of OID by a fraction, thefraction. The numerator of whichsuch fraction is the
excess of the United States holder's adjusted tax basis in the OID Notenote
immediately after its purchase over the OID Note'snote's adjusted issue price, and theprice. The
denominator of whichsuch fraction is the excess of the remaining redemption amount
over the OID Note'snote's adjusted issue price. CertainFor purposes of this prospectus
supplement,
(1) "acquisition premium" means the excess of the Notespurchase price paid by a
non-United States holder for an OID note over the OID note's adjusted
issue price; and
(2) "remaining redemption amount" means the sum of all amounts payable on
an OID note after the purchase date other than payments of qualified
stated interest.
The notes may be subject tohave special redemption, repayment or interest rate reset
features, as indicated in the applicable Pricing Supplement.pricing supplement. Notes containing
such features, in particular OID Notes,notes, may be subject to special rules that
differ from the general rules discussed above. Accordingly, purchasers of Notesnotes
with such features should carefully examine the applicable Pricing Supplementpricing supplement
and should consult their tax advisors with respectrelating to such Notes.
MARKET DISCOUNTnotes.
Market Discount
If a United States holder purchases a Note,note, other than a Short-Term Note (as
described below),short-term note,
for an amount that is less than the Note'snote's stated redemption price at maturity
or, in the case of an OID Note,note, for an amount that is less than the Note's "revisednote's
revised issue price" (I.E.price, i.e., the Note'snote's issue price increased by the amount of
accrued OID),OID, the Notenote will be considered to have "marketmarket discount." The market
discount rules are subject to a DE MINIMISde minimis rule similar to the rule relating to
DE MINIMISde minimis OID, described above.above (in the second paragraph under "Original Issue
Discount"). Any gain recognized by the United States holder on the sale,
exchange, retirement or other taxable disposition of Notesnotes having market
discount generally will be treated as ordinary income to the extent of the
market discount that accrued on the Notenote while held by such United States
holder.
S-34
70
Alternatively, the United States holder may elect to include market
discount in income currently over the life of the Note.note. Such an election will
apply to market discount Notesnotes acquired by the United States holder on or after
the first day of the first taxable year to which such election applies and is
revocable only with the consent of the IRS. Market discount will accrue on a
straight-line basis unless the United States holder elects to accrue the market
discount on a constant-yield method. Such an election will apply to the Notenote to
which it is made and is irrevocable. Unless the United States holder elects to
include market discount in income on a current basis, as described above, the
United States holder could be required to defer the deduction of a portion of
the interest paid on any indebtedness incurred or maintained to purchase or
carry the Note.note.
Market discount on a Foreign Currency Noteforeign currency note will be accrued by a United
States holder in the Specified Currency.specified currency. The amount includible in income by a
United States holder in respect of such accrued market discount will be the U.S.
dollar value of the amount accrued,accrued. This is generally calculated at the spot
rate of exchange on the date that the Notenote is disposed of by the United States
holder. Any accrued market discount on a Foreign Currency Noteforeign currency note that is currently
includible in income will be translated into U.S. dollars at the average
exchange rate for the accrual period (oror portion thereofof such accrual period within
the United States holder's taxable year).
SHORT-TERM NOTESyear.
Short-Term Notes
The rules set forth above also will generally apply to Notesnotes having
maturities of not more than one year from the date of issuance ("Short-Term
Notes"), but with certain modifications.issuance. Those notes are
called short-term notes in this prospectus supplement. Modifications apply to
these general rules.
First, none of the interest on a Short-Term Noteshort-term note is treated as qualified
stated interest but instead is treated as part of the Short-Term Note'sshort-term note's stated
redemption price at maturity, thereby giving rise to S-30
OID. Thus, all Short-Term Notesshort-term
notes will be OID Notes.notes. OID will be treated as accruing on a Short-Term Noteshort-term note
ratably, or at the election of a United States holder, under a constant yield
method.
Second, a United States holder of a Short-Term Noteshort-term note that uses the cash
method of tax accounting will generally not be required to include OID in
respect of the Short-Term Noteshort-term note in income on a current basis. Such a United
States holder may not be allowed to deduct all of the interest paid or accrued
on any indebtedness incurred or maintained to purchase or carry such Notenote until
the maturity of the Notenote or its earlier disposition in a taxable transaction. In
addition, such a United States holder will be required to treat any gain
realized on a disposition of the Notenote as ordinary income to the extent of the
holder's accrued OID with respect toon the Note. Notwithstanding the foregoing, anote. A United States holder of a Short-Term Noteshort-term note
using the cash method of tax accounting may, however, elect to accrue OID into
income on a current basis (in whichbasis. In such case, the limitation on the deductibility of
interest described above will not apply).apply. A United States holder using the
accrual method of tax accounting generally will be required to include OID on a
Short-Term Noteshort-term note in income on a current basis.
Third, any United States holder of a Short-Term Note (whethershort-term note, whether using the
cash or accrual method of tax accounting)accounting, can elect to accrue the "acquisitionacquisition
discount," if any, with respect toon the Notenote on a current basis. If such an election is made,
the OID rules will not apply to the Note.note. Acquisition discount is the excess of
the Note'snote's stated redemption price at maturity over the holder's purchase price
for the Note.note. Acquisition discount will be treated as accruing ratably or, at
the election of the United States holder, under a constant-yield method based on
daily compounding.
As described above, certain of the Notesnotes may be subject tohave special redemption features. These
features may affect the determination of whether a Notenote has a maturity of not
more than one year and thus is a Short-Term Note.short-term note. Purchasers of Notesnotes with such
features should carefully examine the applicable Pricing Supplementpricing supplement and should
consult their tax advisors with respectin relation to such features.
NOTES PURCHASED AT A PREMIUMS-35
71
Notes Purchased at a Premium
A United States holder that purchases a Notenote for an amount in excess of the
remaining redemption amount will be considered to have purchased the Notenote at a
premium.premium and the OID rules will not apply to such holder. Such holder may elect
to amortize such premium, (asas an offset to interest income),income, using a
constant-yield method, over the remaining term of the Note.note. Such election, once
made, generally applies to all debt instruments held or subsequently acquired by
the United States holder on or after the first taxable year to which the
election applies andapplies. Such election may be revoked only with the consent of the IRS.
A United States holder that elects to amortize such premium must reduce its tax
basis in a Notenote by the amount of the premium amortized during its holding
period. With respect toFor a United States holder that does not elect to amortize bond premium,
the amount of such premium will be included in the United States holder's tax
basis when the Notenote matures or is disposed of by the United States holder.
Therefore, a United States holder that does not elect to amortize premium and
holds the note to maturity will generally be required to treat the premium as
capital loss when the note matures.
Amortizable bond premium in respect of a Foreign
Currency Noteforeign currency note will be
computed in the Specified Currencyspecified currency and will reduce interest income in the
Specified Currency.specified currency. At the time amortized bond premium offsets interest income,
exchange gain or loss, which will be taxable as ordinary income or loss, will be
realized with respect toon the amortized bond premium on such Notenote based on the difference
between (1) the spot rate of exchange on the date or dates such premium is
recovered through interest payments on the Notenote and (2) the spot rate of
exchange on the date on which the United States holder acquired the Note.note. See
"Original Issue Discount--Acquisition Premium,"Discount -- Acquisition Premium" above for a Notediscussion of the
treatment of a note purchased for an amount less than or equal to the remaining
redemption amount but in excess of the Note'snote's adjusted issue price.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Trustee willInformation Reporting and Backup Withholding
Information returns may be required to file information returnsbe filed with the IRS with
respectrelating to
payments made to certainparticular United States holders of Notes.notes. In addition,
certain United
States holders may be
S-31
subject to a 31 percent backup withholding tax in respect ofon such
payments if they do not provide their taxpayer identification numbers to the
Trustee.trustee in the manner required, fail to certify that they are not subject to
backup withholding tax, or otherwise fail to comply with applicable backup
withholding tax rules. United States holders may also be subject to information
reporting and backup withholding tax with respect to the proceeds from a sale,
exchange, retirement or other taxable disposition of the notes.
NON-UNITED STATES HOLDERS
Under current United States federal income tax law:
(a) payment on a Note to
a holder who is not a United States holder (a "non-United States holder") will
not be subject to- withholding of United States federal income tax will not apply to a
payment on a note to a non-United States holder, provided that,
(i)(1) the holder does not actually or constructively own 10 percent or
more of the total combined voting power of all classes of stock of
the CompanyCitigroup entitled to vote and is not a controlled foreign
corporation related to the CompanyCitigroup through stock ownership and
(ii)(2) the beneficial owner provides a statement signed under penalties of
perjury that includes its name and address and certifies that it is
a non-United States holder in compliance with applicable
requirements, (or,or, with respect to payments made after December 31,
1999,2000, satisfies certain documentary evidence requirements for establishing
that it is a non-United States holder); (b)holder; and
- a non-United States holder will not be subject to United States federal
income tax on gain realized on the sale, exchange, retirement or other
taxable disposition of a note, unless, in the Note. Notwithstandingcase of an individual, such
holder is present in the United States for 183 days or more in the
taxable year of the retirement or disposition and certain other
conditions are met.
S-36
72
Despite the above, a Non-Unitednon-United States holder that is subject to United States
federal income taxation on a net income basis generally will be subject totaxable under
the same rules to
whichthat govern the taxation of a United States holder is subject with respect toreceiving or
accruing interest payments on a Note and with respect tonote or recognizing gain or loss realizedon the sale, exchange,
retirement or recognized on theother taxable disposition of a Note.note. Special rules might also
apply to a Non-Unitednon-United States holder that is a qualified resident of a country
with which the United States has an income tax treaty.
United States information reporting requirements and backup withholding tax
will not apply to payments on a Notenote if the beneficial owner (1) certifies its
non-U.S.non-United States status under penalties of perjury (or, with respect toand, for payments made after
December 31, 1999,2000, also satisfies certain documentary evidence requirements for
establishing that it is a non-United States holder)person, or (2) otherwise establishes
an exemption.
Information reporting requirements and backup withholding tax will not apply to any payment of the
proceeds of the sale of a Notenote effected outside the United States by a foreign
office of a foreign "broker" (as defined in
applicable Treasury regulations),broker, provided that such broker
(i)- derives less than 50% of its gross income for certainparticular periods from the
conduct of a trade or business in the United States, (ii)States;
- is not a controlled foreign corporation for United States federal income
tax purposespurposes; and
(iii) with respect to- for payments made after December 31, 1999,2000, is not a foreign partnership
that, at any time during its taxable year is 50% or more, (byby income or
capital interest)interest, owned by United States holders or is engaged in the
conduct of a U.S.United States trade or business.
PaymentBackup withholding tax will not apply to the payment of the proceeds of the
sale of a Notenote effected outside the United States by a foreign office of any
other broker will not be subject to backup
withholding tax, but will be subject tobroker. However, information reporting requirements will be applicable to such
payment unless (1) such broker has documentary evidence in its records that the
beneficial owner is a non-United States person and certain other conditions are met or
(2) the beneficial owner otherwise establishes an exemption.
PaymentInformation reporting requirements and backup withholding tax will apply to
the payment of the proceeds of a sale of a Notenote by the U.S. office of a broker,
will be subject to information
reporting requirements and backup withholding tax unless the beneficial owner certifies its non-U.S.non-United States person status under
penalties of perjury or otherwise establishes an exemption.
The U.S. Treasury Department recently issued final Treasury regulations
governing information reporting and the certification procedures regarding
withholding and backup withholding on certain amounts paid to non-United States
persons after December 31, 1999. Such regulations, among other things, may
change the certification procedures relating to the receipt by intermediaries of
payments on behalf of a beneficial owner of a Note. Prospective investors should
consult their tax advisors regarding the effect, if any, of such new Treasury
regulations on an investment in the Notes.
With respect toFor payments made after December 31, 1999,2000, for purposes of applying the
above rules set forth in the three preceding paragraphsfor non-United States holders to an entity that is treated as
fiscally transparent, (e.g.e.g., a partnership or certain trusts) for
United States federal income tax purposes,trust, the beneficial owner means
each of the ultimate beneficial owners of the entity.
S-32S-37
73
PLAN OF DISTRIBUTION
The Notesnotes are being offered on a continuous basis by the CompanyCitigroup through
(the "Agent")Salomon Smith Barney Inc., whichas agent. The agent has agreed to use its reasonable
efforts to solicit orders to purchase Notes, pursuant tonotes. The agent and Citigroup will sign a
distribution agreement (the
"Distribution Agreement") between the Company and the Agent, aagreement. A form of whichdistribution agreement has been filed as an
exhibit to the Registration Statementregistration statement of which this Prospectus
Supplementprospectus supplement forms
a part. The CompanyCitigroup will have the sole right to accept orders to purchase Notesnotes
and may reject proposed purchases in whole or in part. The Agent shallagent will have the
right in its discretion reasonably exercised and without
notice to the Company, to reject any proposed purchase of Notes in whole or in part. The CompanyCitigroup reserves
the right to withdraw, cancel or modify the offer made by this Prospectus Supplement,prospectus
supplement, the accompanying Prospectusprospectus or any Pricing
Supplementpricing supplement without
notice.
The Company will payfollowing table summarizes the Agent a commission of from
not more than .125% to not more than 3.000%aggregate commissions or discounts
payable in connection with offerings of the principal amount of Notes
sold through it,notes. Commissions and discounts
will vary depending upon the Stated Maturity.
The Companystated maturity of the notes.
PUBLIC AGENT'S PROCEEDS, BEFORE
OFFERING DISCOUNTS EXPENSES, TO
PRICE AND COMMISSIONS CITIGROUP
-------- --------------- ----------------
Principal Amount..... $25,000,000,000 $31,250,000-$250,000,000 $24,968,750,000-$24,750,000,000
Total................ 100% .125%-1% 99.875%-99.000%
Citigroup may also sell Notesnotes at a discount to the Agentagent for its own
account or for resale to one or more purchasers at varying prices related to
prevailing market prices at the time of resale or if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by the Agent.price. After any initial
public offering of Notesnotes to be resold to purchasers at a fixed public offering
price, the public offering price and any concession or discount may be changed.
In addition, the Agentagent may offer Notesand sell notes purchased by it as principal to
other dealers. These notes may be sold at a discount which, unless otherwise
specified in the applicable pricing supplement, will not exceed the discount to
be received by the agent.
Notes sold by the Agentagent to a dealer may be sold at a discount and, unless
otherwise specified in the applicable Pricing Supplement, suchpricing supplement, the discount allowed
will not be in excess ofexceed the discount received by the Agentagent from the Company.Citigroup. Unless
otherwise specified in the applicable Pricing Supplement,pricing supplement, any Notenote purchased by
the Agentagent as principal will be purchased at 100% of the principal amount or face
amount thereof less a percentage equal to the commission applicable to an agency sale of
a Notenote of identical maturity. The Agent may sell Notes that it has purchased
as principal to other dealers and such Notes may be sold at a discount which,
unless otherwise specified in the applicable Pricing Supplement, will not exceed
the discount to be received by the Agent from the Company. The CompanyCitigroup reserves the right to sell Notesnotes
directly to investors on its own behalf and to enter into agreements similar to
the Distribution Agreementdistribution agreement with other parties. No commission will be payable nor
will a discount be allowed on any sales made directly by the Company.Citigroup.
No Notenote will have an established trading market when issued. Unless
otherwise specified in the applicable Pricing Supplement,pricing supplement, the Notesnotes will not be
listed on any securities exchange. The Agentagent may make a market in the Notes,notes, but
the Agentagent is not obligated to do so and the Agentso. The agent may discontinue any market-making
at any time without notice, at its sole discretion. There can be no assurance of
the existence or liquidity of a secondary market for any Notes,notes, or that the
maximum amount of Notesnotes will be sold.
Citigroup estimates that its total expenses for the offering, excluding
underwriting commissions or discounts, will be approximately $9,635,000.
The Agent,agent, whether acting as agent or principal, may be deemed to be an
"underwriter"underwriter within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). The Company1933. Citigroup has
agreed to indemnify the Agentagent against certain
liabilities including liabilities under the Securities Act,relating to material
misstatements and omissions, or to contribute to payments that such Agentthe agent may be
required to make in respect thereof andrelating to these liabilities. Citigroup will reimburse the
Agentagent for certaincustomary legal and other expenses, incurred by it in connection with
the offer and sale of the Notes.notes.
Unless otherwise specified in the applicable Pricing Supplement,pricing supplement, payment of
the purchase price of the Notesnotes will be required to be made in immediately
available funds in New York City on the date of settlement.
S-38
74
Concurrently with the offering of Notesnotes through the Agentagent as described herein, the Companyin
this prospectus supplement, Citigroup may issue other Securities pursuant tosecurities under the
Indentureindenture referred to in the Prospectus.
S-33
prospectus.
The broker-dealer subsidiaries of the Company (each a "Broker-Dealer
Subsidiary")Citigroup, including Salomon Smith Barney
Inc., are members of the NASD and subsidiaries of the Company, and may participate in offerings of the Notes.notes.
Accordingly, offerings of the Notesnotes in which Broker-Dealer SubsidiariesCitigroup's broker-dealer
subsidiaries participate will conform with the requirements set forth in Rule
2720 of the Conduct Rules of the NASD.
This Prospectus Supplement,prospectus supplement, the accompanying Prospectusprospectus and the related
Pricing Supplementpricing supplement may be used by the Agentagent or other affiliates of the CompanyCitigroup in
connection with offers and sales of the Notesnotes offered herebyby this prospectus
supplement in market-making transactions at negotiated prices related to
prevailing market prices at the time of sale. The Agentagent or suchthese other
affiliates may act as principal or agent in such transactions.
S-34LEGAL MATTERS
Stephanie B. Mudick, Esq., Deputy General Counsel of Citigroup, 399 Park
Avenue, New York, New York 10043, will act as legal counsel to Citigroup. Ms.
Mudick beneficially owns, or has rights to acquire under Citigroup's employee
benefit plans, an aggregate of less than 1% of Citigroup's common stock. Dewey
Ballantine LLP, New York, New York, will act as legal counsel for the agent.
Dewey Ballantine LLP has from time to time acted as counsel for Citigroup and
its subsidiaries and may do so in the future. A member of Dewey Ballantine LLP
participating in this matter is the beneficial owner of an aggregate of less
than 1% of Citigroup's common stock.
S-39
75
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$6,000,000,000
[LOGO]$25,000,000,000
[CITIGROUP LOGO]
MEDIUM-TERM SENIOR NOTES, SERIES AD
MEDIUM-TERM SUBORDINATED NOTES, SERIES AD
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
------------------------------------------------
PROSPECTUS SUPPLEMENT
, 19982000
(INCLUDING PROSPECTUS
DATED , 1998)
------------------2000)
------------------------------
SALOMON SMITH BARNEY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
76
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WECITIGROUP INC. MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 15, 1998NOVEMBER 20, 2000
PROSPECTUS
SECURITIES
CITIGROUP CAPITAL SECURITIES
% CAPITAL SECURITIES
$ LIQUIDATION AMOUNT
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CITIGROUP INC.
[LOGO]
---------------------[CITIGROUP LOGO]
------------------------
A brief description of the % Capital Securitiescapital securities can be found under
"Summary Information-QInformation -- Q&A" in this Prospectus.prospectus.
Application will be made to list the % Capital Securitiescapital securities on the New
York Stock Exchange, Inc. If approved for listing, we expectCitigroup expects the %
Capital
Securitiescapital securities will begin trading on the New York Stock Exchange, Inc.
within 30 days after they are first issued.
WE URGE YOU ARE URGED TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON
PAGE 7,6, WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH THESE % CAPITAL SECURITIES
ARE DESCRIBED, ALONG WITH THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES OR
INSURANCE COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.Neither the Securities and Exchange Commission nor any state securities or
insurance commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
These securities are not deposits or savings accounts. These securities are
not insured by the Federal Deposit Insurance Corporation or any other
governmental agency or instrumentality.
------------------------
PER CAPITAL
SECURITY TOTAL
--------------------------- -------------------------------------- --------
Public offering price.................................price....................................... $ $
Underwriting commissions to be paid by Citigroup Inc.................................................Inc. ...... (1) (1)
Proceeds to Citigroup Capital.........................Capital............................... $ $
- ---------------------------------------
(1) Underwriting commissions of $ per Capital Security (orcapital security, or $ for
all % Capital Securities)capital securities, will be paid by Citigroup Inc.; except that
for sales of 10,000 or more % Capital Securitiescapital securities to a single purchaser,
the commissions will be $ per Capital Security.
We expectcapital security.
Citigroup expects that the % Capital Securitiescapital securities will be ready for
delivery in book-entry form only through The Depository Trust Company on or
about .
------------------------
, 19982000
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT, AND THE UNDERWRITERS HAVE NOT,
AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE
PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON
IT. WE ARE NOT, AND THE UNDERWRITERS ARE NOT, MAKING AN OFFER TO SELL THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU
SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS, AS WELL AS
INFORMATION WE PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
INCORPORATED BY REFERENCE, IS ACCURATE AS OF THE DATE ON THE FRONT COVER OF THIS
PROSPECTUS ONLY. OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.
------------------------77
TABLE OF CONTENTS
PAGE
---------
Summary Information-Q&A....................................................................................Information -- Q&A.................................. 3
Risk Factors............................................................................................... 7
The Company................................................................................................ 10
Use of Proceeds............................................................................................ 10Factors................................................ 6
Ratio of Income to Fixed Charges and Ratio of Income to
Combined Fixed Charges Including Preferred Stock
Dividends................................................................................................Dividends................................................. 5
Where You Can Find More Information......................... 9
Citigroup Inc............................................... 10
Use of Proceeds............................................. 10
Accounting Treatment........................................ 11
Accounting Treatment....................................................................................... 11
Capitalization.............................................................................................Capitalization.............................................. 12
Description of the Capital Securities......................................................................Securities....................... 13
Description of the Junior Subordinated Debt Securities.....................................................Securities...... 25
Description of Guarantee................................................................................... 33Guarantee.................................... 34
Effect of Obligations Under the Junior Subordinated Debt
Securities and the Guarantee...................... 36Guarantee.............................. 37
United States Federal Income Taxation...................................................................... 37Taxation....................... 39
ERISA Considerations....................................................................................... 41
Underwriting...............................................................................................Considerations........................................ 43
Underwriting................................................ 45
Legal Matters.............................................................................................. 44
Experts.................................................................................................... 44
Available Information...................................................................................... 45
Incorporation of Certain Documents by Reference............................................................ 46Matters............................................... 47
Experts..................................................... 47
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78
SUMMARY INFORMATION-QINFORMATION -- Q&A
The following information supplements, and should be read together with, the
information contained in other parts of this Prospectus.
This summary highlights
selected information from this Prospectus to help you understandprovides a brief overview of the key aspects of Citigroup and
the % Capital
Securities (the "Capital Securities").capital securities. You should carefully read this Prospectusprospectus to
understand fully the terms of the Capital Securitiescapital securities as well as the tax and
other considerations that are important to you in making a decision about
whether to invest in the Capital Securities.capital securities. You should pay special attention to
the "Risk Factors" section beginning on page 76 of this Prospectusprospectus to determine
whether an investment in the Capital Securitiescapital securities is appropriate for you.
WHAT ARE THE CAPITAL SECURITIES?
Each Capital Securitycapital security represents an undivided beneficial interest in the
assets of Citigroup Capital ("Citigroup Capital").Capital. Each Capital Securitycapital security will entitle the holder to
receive cash distributions as described in this Prospectus.prospectus.
Citigroup Capital is offering Capital Securitiescapital securities at a price of
$ for each Capital Security.capital security.
WHO IS CITIGROUP CAPITAL?
Citigroup Capital is a Delaware business trust. Its principal place of
business is c/o Citigroup Inc., 153 East 53rd Street,399 Park Avenue, New York, NY 10043, and its
telephone number is (212) 559-1000.
All of the common securities of Citigroup Capital will sell its Capital Securities to the public and its
common securities (the "Common Securities") tobe owned by
Citigroup Inc. (formerly
Travelers Group Inc.) ("Citigroup" or the "Company"). Citigroup Capital will use the proceeds from these salesthe sale of the
capital securities and the common securities to buy a series of % junior
subordinated deferrable interest debentures due , 20 (the "Junior Subordinated Debt
Securities") from
Citigroup with the same financial terms as the Capital
Securities. Citigroup will guarantee payments made on the Capital Securities to
the extent described below.
There are four trustees of Citigroup Capital (the "Citigroup Capital
Trustees"). Two of the trustees are employees or officers of Citigroup (the
"Regular Trustees"). The Chase Manhattan Bank will act as the Institutional
Trustee of Citigroup Capital and as Guarantee Trustee. Chase Manhattan Bank
Delaware will act as the Delaware Trustee of Citigroup Capital.capital securities.
WHO IS CITIGROUP INC.?
Citigroup'sCitigroup is a diversified holding company whose businesses provide a broad
range of financial services to consumer and corporate customers around the world. Among these businessesin over 100
countries and territories. Citigroup's activities are Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSBC Assetconducted through Global
Consumer, Global Corporate and Investment Bank, Global Investment Management Travelers Life & Annuity and
Travelers Property Casualty.
On October 8, 1998, the Company changed its name from Travelers Group Inc.
to Citigroup Inc. in connection with the merger of Citicorp into a newly formed,
wholly owned subsidiary of the Company.Private Banking, and Investment Activities.
The mailing address of Citigroup's principal executive office is 153 East 53rd Street,399 Park
Avenue, New York, NY 10043, and its telephone number is (212) 559-1000.
WHEN WILL YOU RECEIVE DISTRIBUTIONS ON THE CAPITAL SECURITIES?
Citigroup Capital's only source of cash to make payments on the capital
securities are payments on the junior subordinated debt securities it purchases
from Citigroup.
If you purchase the Capital Securities,capital securities, you are entitled to receive
cumulative cash distributions at an annual rate of % of the liquidation
amount of $ per Capital Security.capital security. Distributions will accumulate from the
date Citigroup Capital issues the Capital Securitiescapital securities and will be paid
in arrears on of each year, beginning
.
3
WHEN CANWILL PAYMENT OF YOUR DISTRIBUTIONS BE DEFERRED?
So long as no event of default under the Junior Subordinated Debt Securities
has occurred and is continuing,If Citigroup can, on one or more occasions, deferdefers interest payments on the Junior Subordinated Debt Securitiesjunior subordinated debt
securities, Citigroup Capital generally will defer distributions on the capital
securities for up to consecutive periods. A deferral of
interest paymentsdistributions cannot extend, however, beyond the maturity date of the Junior Subordinated Debt Securities
(which is , 20 ).
If Citigroup defers interest payments on the Junior Subordinated Debt
Securities, Citigroup Capital will also defer distributions on the Capital
Securities..
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79
During thisany deferral period, distributions will continue to accrueexcept as described on the Capital Securities at an annual rate of % of the liquidation amount of
$ per Capital Security. Also, the deferred distributions will themselves accrue
interest at an annual rate of % (to the extent permitted by law). Once
Citigroup makes all interest payments on the Junior Subordinated Debt
Securities, with accrued interest, it can again postpone interest payments on
the Junior Subordinated Debt Securities if no event of default under the Junior
Subordinated Debt Securities has occurred and is continuing.
During any period in which Citigroup defers interest payments on the Junior
Subordinated Debt Securities,page 28, Citigroup will
not be permitted to (with limited
exceptions):to:
- pay a dividend or make any distributions on its capital stock or redeem,
purchase, acquire or make a liquidation payment on any of its capital
stock, or make any guarantee payments with respectrelating to the foregoing; or
- make an interest, principal or premium payment on, or repurchase or
redeem, any of its debt securities that rank equal with or junior to the
Junior Subordinated Debt Securities.
If Citigroup defers payments of interest on the Junior Subordinated Debt
Securities, the Capital Securities will be treated as being issued with original
issue discount for United States federal income tax purposes. This means you
will be required to recognize interest income with respect to distributions and
include such amounts in your gross income for United States federal income tax
purposes even though you will not have received any cash distributions relating
to such interest income. See "United States Federal Income Taxation--Interest
Income and Original Issue Discount."junior subordinated debt securities.
WHEN CAN CITIGROUP CAPITAL REDEEM THE CAPITAL SECURITIES?
Citigroup Capital must redeem all of the outstanding Capital Securities and
Common Securities (together, the "Trust Securities") when the Junior
Subordinated Debt Securities are paid at maturitycapital securities on
, 20 .
In addition,
if Citigroup redeems any Junior Subordinated Debt Securities before their
maturity, Citigroup Capital will use the cash it receives from the redemption to
redeem, on a pro rata basis, Capital Securities and Common Securities having a
combined liquidation amount equal to the principal amount of the Junior
Subordinated Debt Securities redeemed.
Citigroup can redeem someSome or all of the Junior Subordinated Debt Securitiescapital securities may be redeemed before
their maturity at 100% of their principal amount, 20 on one or more occasions any time on or after
, 20 . Citigroup also hasAlso the option to redeem,capital securities may be redeemed, in whole or
in part, the Junior Subordinated Debt Securities at any time if certain changes in tax, investment company or bank
regulatory law occur and certain other conditions are satisfied, as more fully described undersatisfied. See
"Description of the Capital Securities--Securities -- Special Event Redemption." In any case, Citigroup will
pay accrued interest to the date of redemption. Prior to any such redemption,
Citigroup will obtain any required regulatory approvals.Redemption" on page 15.
WHAT IS CITIGROUP'S GUARANTEE OF THE CAPITAL SECURITIES?
Citigroup willCitigroup's guarantee of the Capital Securities based on:capital securities consists of:
- its obligations to make payments on the Junior Subordinated Debt
Securities;
4
junior subordinated debt
securities;
- its obligations under the Capital Securities Guarantee (the "Guarantee");capital securities guarantee; and
- its obligations under the Amendedamended and Restated Declarationrestated declaration of Trusttrust of
Citigroup Capital, (the "Declaration"), which sets forth the terms of the
Trust.Citigroup Capital.
Citigroup has irrevocably guaranteed that if a payment on the Junior
Subordinated Debt Securitiesjunior
subordinated debt securities is made to Citigroup Capital but, for any reason,
Citigroup Capital does not make the corresponding distribution or redemption
payment to the holders of the Capital Securities,capital securities, then Citigroup will make the
payments directly to the holders of the Capital Securities. To avoid a double
payment to a holder of the Capital Securities, if Citigroup makes a payment
under the Guarantee, the holder's right to receive the corresponding payment
fromcapital securities. The guarantee does
not cover payments when Citigroup Capital will automatically be surrendereddoes not have sufficient funds to Citigroup.make
payments on the capital securities.
Citigroup's obligations under the Guarantee are:
- subordinate and junior in right of payment to its other liabilities;
- equal in rank to its most senior current or future preferred stock and to
any current or future guarantee of preferred or preference stock of any of
its subsidiaries; and
- senior to its common stock.are subordinated as described
on page 37.
WHEN COULD THE JUNIOR SUBORDINATED DEBT SECURITIES BE DISTRIBUTED TO YOU?
Citigroup has the right to dissolve Citigroup Capital at any time. Prior to
any such dissolution, Citigroup will obtain any required regulatory approvals.
If
Citigroup terminates Citigroup Capital, Citigroup Capital will redeem the
Capital Securitiescapital securities by distributing the Junior Subordinated Debt Securitiesjunior subordinated debt securities to
holders of the Capital Securitiescapital securities and the Common Securitiescommon securities on a pro rataratable basis.
If the Junior Subordinated Debt Securitiesjunior subordinated debt securities are distributed, Citigroup will use
it best efforts to list the Junior Subordinated Debt Securitiesjunior subordinated debt securities on the New York
Stock Exchange, Inc. (the "NYSE") (or, or any other exchange on which the Capital
Securitiescapital securities are
then listed) in place of the Capital Securities.listed.
WILL THE CAPITAL SECURITIES BE LISTED ON A STOCK EXCHANGE?
Application will be made to list the Capital Securitiescapital securities on the NYSE. If
approved for listing, we expectCitigroup Capital expects the Capital Securitiescapital securities will
begin trading on the NYSE within 30 days after they are first issued.
WILL HOLDERS OF THE CAPITAL SECURITIES HAVE ANY VOTING RIGHTS?
Generally, the holders of the Capital Securitiescapital securities will not have any voting
rights. See "Description of the Capital Securities--VotingSecurities -- Voting Rights."
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80
IN WHAT FORM WILL THE CAPITAL SECURITIES BE ISSUED?
The Capital Securitiescapital securities will be represented by one or more global securities
that will be deposited with and registered in the name of The Depository Trust
Company ("DTC") or its nominee. This means that you will not receive a certificate for
your Capital Securitiescapital securities and that your broker will maintain your position in the
Capital Securities.capital securities. Citigroup Capital expects that the Capital
Securitiescapital securities will
be ready for delivery through DTC on or about .
WHERE CAN YOU FIND MORE INFORMATION?
We file annual, quarterlyRATIO OF INCOME TO FIXED CHARGES AND RATIO OF INCOME TO
COMBINED FIXED CHARGES INCLUDING PREFERRED STOCK DIVIDENDS
The following table shows (1) the consolidated ratio of income to fixed
charges and current reports, proxy statements(2) the consolidated ratio of income to combined fixed charges
including preferred stock dividends of Citigroup for the nine months ended
September 30, 2000 and other
information witheach of the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. SEC
filings are also available to the public from the SEC's web site at
http://www.sec.gov. If you would likefive most recent fiscal years.
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
2000 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
Ratio of income to fixed charges (excluding
interest on deposits)..................... 2.09 2.13 1.57 1.71 1.88 1.65
Ratio of income to fixed charges (including
interest on deposits)..................... 1.64 1.64 1.33 1.43 1.51 1.39
Ratio of income to combined fixed charges
including preferred stock dividends
(excluding interest on deposits).......... 2.07 2.09 1.54 1.66 1.80 1.56
Ratio of income to combined fixed charges
including preferred stock dividends
(including interest on deposits).......... 1.63 1.62 1.32 1.41 1.48 1.35
5
additional information about our Company, please refer to the information under
"Available Information" below.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to other documents. The information incorporated by reference is considered
to be part of this Prospectus, and later information filed with the SEC will
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Section 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until our offering is
completed:
(a) Annual Report on Form 10-K for the year ended December 31, 1997, as
amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998; and
(c) Current Reports on Form 8-K filed on January 6, 1998, January 26, 1998,
February 17, 1998, April 6, 1998, April 8, 1998, April 20, 1998, June 1,
1998, July 20, 1998, August 18, 1998, August 31, 1998, October 8, 1998,
October 21, 1998, October 26, 1998, October 29, 1998, November 1, 1998
and November 13, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Treasurer
Citigroup Inc.
153 East 53(rd) Street
New York, NY 10043
212-559-1000
You should rely only on the information incorporated by reference or
provided in this Prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this Prospectus is accurate as of any date other than the date on
the front of the document.
6
81
RISK FACTORS
Your investment in the Capital Securitiescapital securities will involve certainseveral risks. You
should carefully consider the following discussion of risks, and the other
information in this Prospectus,prospectus, before deciding whether an investment in the
Capital Securitiescapital securities is suitable for you.
CITIGROUP'S OBLIGATIONSCITIGROUP IS NOT REQUIRED TO PAY YOU UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBT SECURITIES ARE SUBORDINATED.UNLESS IT FIRST MAKES OTHER REQUIRED PAYMENTS.
Citigroup's obligations under the Junior Subordinated Debt Securitiesjunior subordinated debt securities will
rank junior in priority of payment to all of Citigroup's senior indebtedness.indebtedness as described on page 26.
This means that Citigroup cannot make any payments on the Junior Subordinated
Debt Securitiesjunior subordinated
debt securities if it defaults on a payment of senior indebtedness and does not
cure suchthe default within the applicable grace period or if the senior
indebtedness becomes immediately due because of a default and has not yet been
paid in full. In addition, Citigroup's obligations under the Junior Subordinated
Debt Securitiesjunior subordinated
debt securities will be effectively subordinated to all existing and future
liabilities of Citigroup's subsidiaries.
Citigroup's obligations under the Guarantee will rank in priorityguarantee are subordinated to all of payment
as follows:
- subordinate and junior in right of payment to its
other liabilities;
- equal in rank to its most senior current or future preferred stock and to
any current or future guarantee of preferred or preference stock of any of
its subsidiaries; and
- senior to its common stock.liabilities as described on page 37.
This means that Citigroup cannot make any payments on the Guaranteeguarantee if it
defaults on a payment on any of its other liabilities. In addition, in the event
of the bankruptcy, liquidation or dissolution of Citigroup, its assets would be
available to pay obligations under the Guaranteeguarantee only after Citigroup made all
payments on its other liabilities.
Neither the Capital Securities,capital securities, the Junior Subordinated Debt Securitiesjunior subordinated debt securities nor
the Guaranteeguarantee limit the ability of Citigroup and its subsidiaries to incur
additional indebtedness, including indebtedness that ranks senior in priority of
payment to the Junior Subordinated Debt Securitiesjunior subordinated debt securities and the Guarantee.guarantee. See
"Description of Guarantee--StatusGuarantee -- Status of the Guarantee" and "Description of the
Junior Subordinated Debt Securities--Subordination."Securities -- Subordination" on pages 34 and 25,
respectively.
CITIGROUP IS NOT REQUIRED TO PAY YOU UNDER THE GUARANTEE ONLY COVERS PAYMENTS IF CITIGROUP CAPITAL
HASDOES NOT HAVE CASH AVAILABLE.
The ability of Citigroup Capital to pay scheduled distributionsmake payments on the Capital Securities, the redemption price of the Capital Securities and the
liquidation amount of each Capital Securitycapital securities
is solely dependent upon Citigroup making the related payments on the Junior Subordinated Debt Securitiesjunior
subordinated debt securities when due.
If Citigroup defaults on its obligations to pay principal or interestmake payments on the Junior Subordinated Debt Securities,junior
subordinated debt securities, Citigroup Capital will not have sufficient funds
to pay distributions,make payments on the redemption price or the liquidation amount of
each Capital Security.capital securities. In those circumstances, you will not
be able to rely upon the Guaranteeguarantee for payment of these amounts. Instead, you:
- may directly sue Citigroup or seek other remedies to collectPage 13
discusses your pro rata
share of payments owed; or
- may rely on the Institutional Trustee to enforce Citigroup Capital's
rights under the Junior Subordinated Debt Securities.
7
options if this happens.
DEFERRAL OF DISTRIBUTIONS WOULD HAVE ADVERSE TAX CONSEQUENCES FOR YOU AND MAY
ADVERSELY AFFECT THE TRADING PRICE OF THE CAPITAL SECURITIES.
So long as no event of default under the Junior Subordinated Debt Securities
has occurred and is continuing, Citigroup can, on one or more occasions, defer
interest payments on the Junior Subordinated Debt Securities for up to
consecutive periods. If Citigroup defers interest payments on the
Junior Subordinated Debt Securities, Citigroup Capital will defer distributions on the Capital Securities during any deferral period. However, distributions
would still accumulate and suchcapital securities are deferred, distributions would themselves accrue
interest at the annual rate of % per annum (to the extent permitted by law).
If Citigroup defers payments of interest on the Junior Subordinated Debt
Securities, you will be
required to recognize interest income for United States federal income tax
purposes (based onin respect of your pro rataratable share of the interest on the Junior Subordinated Debt Securitiesjunior
subordinated debt securities held by Citigroup Capital)Capital before you receive any
cash distributions relating to suchthis interest. In addition, you will not receive
suchthis cash if you sold the Capital Securitiescapital securities before the end of any deferral
period or before the record date relating to distributions which are paid.
Citigroup has no current intention of deferring interest payments on the
Junior Subordinated Debt Securitiesjunior subordinated debt securities and believes that such deferral is a remote
possibility. However, if Citigroup exercises its right in the future, the
Capital Securitiescapital securities may trade at a price that does not fully reflect the value of
accrued but unpaid interest on the Junior Subordinated Debt Securities.junior subordinated debt securities. If you
sell the Capital Securitiescapital securities during an interest deferral period, you may not
receive the same return on investment as someone else who continues to hold the
Capital Securities.capital securities. In addition, the existence of Citigroup's right to defer
payments of interest
6
82
on the Junior Subordinated Debt Securitiesjunior subordinated debt securities may mean that the market price for
the Capital Securities (whichcapital securities, which represent an undivided beneficial interest in the
Junior Subordinated Debt Securities)junior subordinated debt securities, may be more volatile than other securities
that do not have these rights.
See "United States Federal Income Taxation" on page 39 for more information
regarding the tax consequences of purchasing, holding and selling the Capital Securities.capital
securities.
YOU SHOULD NOT RELY ON THE DISTRIBUTIONS FROM THE CAPITAL SECURITIES THROUGH
THEIR MATURITY DATE -- THEY MAY BE REDEEMED AT ANY TIME IF CERTAIN CHANGES IN
TAX, INVESTMENT COMPANY OR BANK REGULATORY LAW OCCUR.
If certain changes, which are more fully described below, in tax,
investment company or bank regulatory law occur and are continuing, and certain
other conditions which are more fully described below are satisfied, Citigroup has
the right to redeem, in whole or in part, the Junior Subordinated Debt
Securities. Any such redemption will cause a mandatory redemption of Capital
Securities and Common Securities having an aggregate liquidation amount equal to
the aggregate principal amount of Junior Subordinated Debt Securities tocapital
securities could be redeemed by Citigroup Capital within 90 days of the event at
a redemption price equal to $ per security plus any accrued and unpaid
distributions. Prior to any such
redemption, Citigroup will obtain any required regulatory approvals. See "Description of the Capital Securities--DistributionSecurities -- Distribution of the
Junior Subordinated Debt Securities" and "--Special"-- Special Event Redemption."Redemption" on pages
16 and 15, respectively.
YOU SHOULD NOT RELY ON THE DISTRIBUTIONS FROM THE CAPITAL SECURITIES THROUGH
THEIR MATURITY DATE -- THEY MAY BE REDEEMED AT THE OPTION OF THE COMPANY.
At the option of the Company, the Junior Subordinated Debt SecuritiesThe capital securities may be redeemed, in whole, at any time, or in part,
from time to time, on or after , at a redemption price equal
to the principal amount to be redeemed$ per capital security plus any accrued and unpaid interestdistributions to the
redemption date. Prior to any such
redemption, Citigroup will obtain any required regulatory approvals. See
"Description of the Junior Subordinated Debt Securities--Optional Redemption."
You should assume that the Company will exercise itsthis redemption option will be exercised
if the
CompanyCitigroup is able to refinance at a lower interest rate or it is otherwise in
the interest of the CompanyCitigroup to redeem the Junior Subordinated Debt Securities.junior subordinated debt securities. If
the Junior Subordinated Debt Securitiesjunior subordinated debt securities are redeemed, the TrustCitigroup Capital must
redeem the Capital Securitiescapital securities and the Common Securitiescommon securities having an aggregate
liquidation amount equal to the aggregate principal amount of Junior Subordinated Debt
Securitiesjunior
subordinated debt securities to be redeemed. See "Description of the Capital
Securities--MandatorySecurities -- Mandatory Redemption of Trust Securities."
8
PENDING TAX LITIGATION MAY RESULT IN A CHANGE IN TAX LAW THAT WILL PERMIT THE
COMPANY TO REDEEM THE JUNIOR SUBORDINATED DEBT SECURITIES.
It has been reported that the Internal Revenue Service ("IRS") recently
challenged another company's deduction for interest paid on a debt instrument
similar in some respects toSecurities" and "Description of the
Junior Subordinated Debt Securities. BasedSecurities -- Optional Redemption" on available information, the Companypages 15 and Citigroup Capital do not believe that
this challenge will affect the Company's ability to deduct interest payments on
the Junior Subordinated Debt Securities. However, you should be aware that
further developments favoring the IRS's challenge, or other unrelated
developments, could cause a Tax Event (as described in "Description of the
Capital Securities--Special Event Redemption"). Laws and regulations have also
been proposed in the past which, if adopted retroactively, could also cause a
Tax Event.27,
respectively.
THERE CAN BE NO ASSURANCE AS TO THE MARKET PRICES FOR THE CAPITAL SECURITIES OR
THE JUNIOR SUBORDINATED DEBT SECURITIES.
There can be noSECURITIES; THEREFORE, YOU MAY SUFFER A LOSS.
Citigroup Capital and Citigroup cannot give you any assurance as to the
market prices for the Capital Securitiescapital securities or the Junior Subordinated Debt Securitiesjunior subordinated debt
securities that may be distributed in exchange for Capital Securities upon a termination of Citigroup Capital.capital securities.
Accordingly, the Capital Securitiescapital securities that an investor may purchase, whether
pursuant to the offer made by this Prospectusprospectus or in the secondary market, or the
Junior Subordinated
Debt Securitiesjunior subordinated debt securities that a holder of Capital Securitiescapital securities may
receive upon a
termination of Citigroup Capital,in exchange for capital securities, may trade at a discount to the price
that the investor paid to purchase the Capital Securities offered by this Prospectus.capital securities. As a result of Citigroup'sthe
right to defer interest payments on the Junior
Subordinated Debt Securities,capital securities, the market price of the
Capital Securities (which
represent undivided beneficial ownership interests in Citigroup Capital, the
assets of which consist solely of the Junior Subordinated Debt Securities)capital securities may be more volatile than the market prices of other
securities that are not subject
to which such optional deferrals.deferrals do not apply.
THERE COULD BE AN ADVERSE TAX CONSEQUENCE TO YOU IF CITIGROUP MAY TERMINATETERMINATES
CITIGROUP CAPITAL AT ANY TIME.
Subject to obtaining any required regulatory approval,AND DISTRIBUTES JUNIOR SUBORDINATED DEBT SECURITIES TO
HOLDERS, RESULTING IN POSSIBLE TAX AND LIQUIDITY CONSEQUENCES TO YOU.
Citigroup has the right to terminate Citigroup Capital at any time.time, so long
as it obtains any required regulatory approval. If Citigroup decides to exercise
its right to terminate Citigroup Capital, Citigroup Capital will redeem the
Capital Securitiescapital securities and Common Securitiescommon securities by distributing the Junior
Subordinated Debt Securitiesjunior subordinated
debt securities to holders of the Capital Securitiescapital securities and Common
Securitiescommon securities on a
pro rataratable basis.
Under current United States federal income tax law, a distribution of
Junior
Subordinated Debt Securitiesjunior subordinated debt securities to you on the dissolution of Citigroup
Capital should not be a taxable event to you. However, if Citigroup Capital is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time it is dissolved or if there is a change in
law, the distribution of Junior Subordinated Debt Securitiesjunior subordinated debt securities to you may be a
taxable event to you.
Citigroup has no current intention of causing the termination of Citigroup
Capital and the distribution of the Junior Subordinated Debt Securities.
Citigroup anticipates that it would consider exercising this right in the event
that expenses associated with maintaining Citigroup Capital were substantially
greater than currently expected, such as if certain changes in tax law,
investment company law or banking regulatory law occurred. Citigroup cannot
predict the other circumstances under which this right would be exercised.7
83
THERE MAY BE NO TRADING MARKET FOR THE JUNIOR SUBORDINATED DEBT SECURITIES IF
CITIGROUP CAPITAL DISTRIBUTES THEM TO YOU.
Although Citigroup will use its best efforts to list the Junior Subordinated
Debt Securitiesjunior
subordinated debt securities on the NYSE, (oror any other exchange on which the
Capital
Securitiescapital securities are then listed)listed, if they are distributed, weCitigroup cannot
assure you that the Junior Subordinated Debt Securitiesjunior subordinated debt securities will be approved for
listing or that a trading market will exist for those securities.
SINCE YOU HAVE LIMITED VOTING RIGHTS.RIGHTS, YOU CANNOT PREVENT THE CITIGROUP CAPITAL
TRUSTEES FROM TAKING ACTIONS YOU MAY NOT AGREE WITH.
You will have limited voting rights. In particular, subject to certainexcept for the limited
exceptions described below, only Citigroup can elect or remove any of Citigroup
Capital Trustees.trustees. See "Description of the Capital Securities--Voting Rights."Securities -- Voting Rights"
on page 19.
8
84
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, Citigroup and the subsidiary
trusts filed a registration statement (No. 333-49442) relating to the securities
offered by this prospectus with the Securities and Exchange Commission. This
prospectus is a part of that registration statement, which includes additional
information. Citigroup has filed the exhibits discussed in this prospectus with
the registration statement, and you should read the exhibits carefully for
provisions that may be important to you.
Citigroup files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document Citigroup
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can also request copies of these documents, upon
payment of a duplicating fee, by writing to the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. These SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov.
The SEC allows Citigroup to "incorporate by reference" the information it
files with the SEC, which means that it can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus. Information that
Citigroup files with the SEC will automatically update the information in this
prospectus. In all cases, you should rely on the later information over
different information included in this prospectus. Citigroup incorporates by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934:
(a) Annual Report on Form 10-K for the year ended December 31, 1999, as
amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000,
June 30, 2000 and September 30, 2000; and
(c) Current Reports on Form 8-K filed on January 19, 2000, February 16,
2000, February 28, 2000, April 18, 2000, June 20, 2000, July 20, 2000,
July 20, 2000, July 25, 2000, September 6, 2000, October 11, 2000 and
October 19, 2000.
All documents Citigroup files pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the later of
(1) the completion of the offering of the securities described in this
prospectus and (2) the date the broker-dealer subsidiaries of Citigroup stop
offering securities pursuant to this prospectus shall be incorporated by
reference in this prospectus from the date of filing of such documents.
You may request a copy of these filings, at no cost, by writing or
telephoning Citigroup at the following address:
Citigroup Document Services
140 58th Street, Suite 5I
Brooklyn, NY 11220
(877) 936-3737 (toll free)
(718) 765-6460 (outside the U.S.)
------------------------
You should only rely on the information contained or incorporated by
reference in this prospectus. Citigroup has not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. Citigroup is not, and the underwriters are not, making an offer to sell
these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus, as well as
information Citigroup previously filed with the SEC and incorporated by
reference, is accurate as of the date of the applicable document. Citigroup's
business, financial condition, results of operations and prospects may have
changed since that date.
9
THE COMPANY
Citigroup's85
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in this
prospectus include forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. These forward-looking
statements are based on our management's beliefs and assumptions and on
information currently available to our management. Forward-looking statements
include information concerning our possible or assumed future results of
operations and statements preceded by, followed by or that include the words
"believes," "expects," "anticipates," "intends," "plans," "estimates" or similar
expressions.
Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are not limited
to, those discussed elsewhere in this prospectus and the documents incorporated
by reference in this prospectus. You should not put undue reliance on any
forward-looking statements. We do not have any intention or obligation to update
forward-looking statements after we distribute this prospectus.
CITIGROUP INC.
Citigroup is a diversified holding company whose businesses provide a broad
range of financial services to consumer and corporate customers around the world. Among these businessesin more than 100
countries and territories. Citigroup's activities are Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSBC Assetconducted through Global
Consumer, Global Corporate and Investment Bank, Global Investment Management Travelers Life & Annuity and
Travelers Property Casualty.
On October 8, 1998, the Company changed its name from Travelers Group Inc.
toPrivate Banking, and Investment Activities.
Citigroup Inc. in connection with the merger of Citicorp into a newly formed,
wholly owned subsidiary of the Company.
The Company is a holding company and services its obligations primarily with
dividends and advances that it receives from subsidiaries. Certain subsidiaries'
dividend paying abilitiesCitigroup's
subsidiaries that operate in the banking, insurance and securities business can
only pay dividends if they are limited by certain covenant restrictions in credit
agreements and/or bycompliance with the applicable regulatory
requirements including those imposed on them by federal and state bank regulatory authorities,
thestate insurance departments, of a number of states,
and various capital requirements imposed by securities regulators. The Company
isCitigroup's subsidiaries
may be party to credit agreements that also subjectmay restrict their ability to certainpay
dividends. Citigroup currently believes that none of these regulatory or
contractual restrictions on the ability of its subsidiaries to pay dividends
will affect Citigroup's ability to service its own debt. Citigroup must also
maintain the required capital requirements aslevels of a bank holding company.company before it may pay
dividends on its stock. Each of the Company'sCitigroup's major operating subsidiaries
finances its operations on a stand-alone basis consistent with its
capitalization and ratings.
Under longstanding policy of The Board of Governors of the Federal Reserve
System, a bank holding company is expected to act as a source of financial
strength for its subsidiary banks and to commit resources to support such banks.
As a result of that policy, the CompanyCitigroup may be required to commit resources to its
subsidiary banks in certain circumstances.
Thebanks.
Citigroup's principal office of the Company is located at 153 East 53rd Street,399 Park Avenue, New York, NY
10043, and its telephone number is (212) 559-1000.
USE OF PROCEEDS
All of the net proceeds from the sale of the Capital Securitiescapital securities will be
invested by Citigroup Capital in Junior Subordinated Debt Securitiesjunior subordinated debt securities of
the
Company. The CompanyCitigroup. Citigroup will use the proceeds from the sale of the Junior
Subordinated Debt Securitiesjunior
subordinated debt securities to Citigroup Capital for general corporate
purposes, principally to fundwhich may include:
- funding the business of its operating units and to fundunits;
- funding investments in, or extensions of credit or capital contributions
to, its subsidiariessubsidiaries;
- financing of possible acquisitions or business expansion, and
to lengthen- lengthening the average maturity of liabilities, which may
include the reduction ofmeans that it
could reduce its short-term liabilities or the refunding ofrefund maturing indebtedness.
In order to fund its business, the Companybusinesses, Citigroup expects to incur additional
indebtedness in the future. See "Capitalization."
10
RATIO OF INCOME TO FIXED CHARGES AND RATIO
OF INCOME TO COMBINED FIXED CHARGES INCLUDING PREFERRED STOCK DIVIDENDS
The following table sets forth (i) the supplemental consolidated ratio of
income to fixed charges and (ii) the supplemental consolidated ratio of income
to combined fixed charges including preferred stock dividends of the Company for
the nine months ended September 30, 1998 and for each of the five most recent
fiscal years, after giving retroactive effect to the merger with Citicorp on
October 8, 1998 in a transaction accounted for as a pooling of interests.
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED -----------------------------------------------------
SEPTEMBER 30, 1998 1997 1996 1995 1994 1993
--------------------- --------- --------- --------- --------- ---------
Ratio of income to fixed charges (excluding interest
on deposits)...................................... 1.65 1.71 1.88 1.65 1.41 1.43
Ratio of income to fixed charges (including interest
on deposits)...................................... 1.39 1.43 1.51 1.39 1.25 1.25
Ratio of income to combined fixed charges including
preferred stock dividends (excluding interest on
deposits)......................................... 1.62 1.66 1.80 1.56 1.34 1.37
Ratio of income to combined fixed charges including
preferred stock dividends (including interest on
deposits)......................................... 1.37 1.41 1.48 1.35 1.21 1.22
86
ACCOUNTING TREATMENT
The financial statements of Citigroup Capital will be reflected in
the
Company'sCitigroup's consolidated financial statements with the Capital Securitiescapital securities
reflected in "Company"Citigroup or subsidiary obligated mandatorily redeemable preferred
securities of subsidiary trusts holding solely junior subordinated debt
securities of--Company.of -- Parent."
11
87
CAPITALIZATION
The following table sets forth the supplemental consolidated capitalization of the CompanyCitigroup
at September 30, 1998, after giving retroactive effect to the
merger with Citicorp on October 8, 1998 in a transaction accounted for as a
pooling of interests,2000, and as adjusted to give effect to the issuance and sale
of the Capital Securities.capital securities, and no other change in the consolidated
capitalization of Citigroup since September 30, 2000 is reflected therein. The
information is only a summary and should be read together with the financial
information incorporated by reference in this prospectus and which can be
obtained free of charge. See "Where You Can Find More Information" on page 9.
AT SEPTEMBER 30, 1998
------------------------2000
--------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
(DOLLARS IN MILLIONS)
(DOLLARS IN MILLIONS)
Debt:
Investment banking and brokerage borrowings..........................................borrowings............... $ 16,12820,687 $
Short-term borrowings................................................................ 19,492borrowings..................................... 19,485
Long-term debt....................................................................... 49,419
----------- -----------debt............................................ 58,801
-------- --------
Total debt......................................................................... 85,039
----------- -----------
Redeemable Preferred Stock--Series I................................................... 280
----------- -----------debt............................................. 98,973
-------- --------
Company or subsidiary obligated mandatorily redeemable preferred
securities of subsidiary trusts holding solely junior
subordinated debt securities of--
Company.............................................................................. 1,200
Subsidiaries.........................................................................of --
Company................................................... 2,300
Subsidiaries.............................................. 2,620
Stockholders' equity:
CapitalPreferred stock at aggregate liquidation value......................................... 2,313value............ 1,775
Common stock and additional paid-in capital (net of
treasury stock).................. 5,031(1)..................................... 1,320
Retained earnings.................................................................... 35,746earnings......................................... 51,744
Accumulated other changes in equity from nonowner
sources............................ 593sources................................................ (182)
Unearned compensation................................................................ (593)
----------- -----------compensation..................................... (1,016)
-------- --------
Total stockholders' equity......................................................... 43,090
----------- -----------equity............................. 53,641
-------- --------
Total capitalization...................................................................capitalization........................................ $157,534 $
132,229 $
----------- -----------
----------- -----------======== ========
- ---------------
(1) Common stock, par value U.S. $0.01 per share, 10 billion shares authorized,
4,491,904,562 shares outstanding, reflecting the 4-for-3 split in
Citigroup's common stock, paid on August 25, 2000.
12
88
DESCRIPTION OF THE CAPITAL SECURITIES
The Capital Securitiescapital securities will be issued pursuant to the terms of the Declaration.amended
and restated declaration of trust of Citigroup Capital. The Declarationdeclaration will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").1939. The
Institutional
Trustee,institutional trustee, The Chase Manhattan Bank, will act as indenture trustee
under the Declarationdeclaration for purposes of compliance with the provisions of the
Trust Indenture Act. The terms of the Capital Securitiescapital securities will include those
stated in the Declarationdeclaration and those made part of the Declarationdeclaration by the Trust
Indenture Act. The following summary of the material terms and provisions of the
Capital
Securities doescapital securities is not purportintended to be complete and is subject to, and qualified in
its entirety by reference to, the
Declaration (a copy of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part),declaration, the Business Trust Act of the State of Delaware (the "Trust Act") and the Trust
Indenture Act. A copy of the declaration is filed as an exhibit to the
registration statement of which this prospectus is a part.
GENERAL
The Declarationdeclaration authorizes the Regular Trusteesregular trustees to issue on behalf of
Citigroup Capital the Trust Securities,trust securities, which represent undivided beneficial
interests in the assets of Citigroup Capital. All of the Common Securitiescommon securities will
be owned, directly or indirectly, by the Company.Citigroup. The Common Securitiescommon securities rank
PARI PASSU,equally, and payments will be made thereonon the common securities on a PRO RATAratable basis,
with the Capital Securities, except that uponcapital securities. If an event of default under the occurrencedeclaration occurs
and during the continuance
of a Declaration Event of Default,continues, however, the rights of the holders of the Common
Securitiescommon securities to
receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Capital Securities.capital securities. The Declarationdeclaration does not permit the issuance by
Citigroup Capital of any securities other than the Trust Securitiestrust securities or the
incurrence of any indebtedness by Citigroup Capital.
Pursuant to the Declaration,declaration, the Institutional Trusteeinstitutional trustee will hold title to
the Junior
Subordinated Debt Securitiesjunior subordinated debt securities purchased by Citigroup Capital for the
benefit of the holders of the Trust Securities.trust securities. The payment of distributions out
of money held by Citigroup Capital, and payments upon redemption of the Capital
Securitiescapital
securities or liquidation of Citigroup Capital out of money held by Citigroup
Capital, are guaranteed by the CompanyCitigroup to the extent described under "Description
of Guarantee." The Guaranteeguarantee will be held by The Chase Manhattan Bank, the
Guarantee Trustee,guarantee trustee, for the benefit of the holders of the Capital
Securities.capital securities. The
Guaranteeguarantee does not cover payment of distributions when Citigroup Capital does
not have sufficient available funds to pay such distributions. In such event,
the remedy of a holder of Capital Securitiescapital securities is to (i)to:
- vote to direct the Institutional Trusteeinstitutional trustee to enforce the Institutional Trustee'sinstitutional
trustee's rights under the Junior Subordinated Debt Securitiesjunior subordinated debt securities; or
(ii)- if the failure of Citigroup Capital to pay distributions is attributable
to the failure of the
CompanyCitigroup to pay interest or principal on the Junior Subordinated Debt Securities,
institute a proceeding directly against the Companyjunior
subordinated debt securities, sue Citigroup for enforcement of payment to
such holder of the principal or interest on the Junior Subordinated Debt
Securitiesjunior subordinated debt
securities having a principal amount equal to the aggregate liquidation
amount of the Capital Securitiescapital securities of such holder on or after the
respective due date specified in the Junior Subordinated Debt Securities. See "--Voting Rights."junior subordinated debt securities.
DISTRIBUTIONS
Distributions on the Capital Securitiescapital securities will be fixed at a rate per annum
of % of the stated liquidation amount of $ per Capital Security.capital security.
Distributions not paid when due, (oror would be due, if not for any Extension Periodextension
period or default by the CompanyCitigroup on the Junior Subordinated Debt Securities)junior subordinated debt securities, will
themselves accumulate additional interest at the annual rate of % thereof
compounded . The term "distribution" as used herein includesWhen this prospectus refers to any payment of
distributions, distributions include any such interest payable unless otherwise
stated. The amount of distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months.
13
Distributions on the Capital Securitiescapital securities will be cumulative, will accrue
from and including , and will be payable in arrears on
of each year, commencing . When, as and if available for payment,
distributions will be made by the Institutional Trustee,institutional trustee, except as otherwise
described below.
13
89
The distribution rate and the distribution payment dates and other payment
dates for the Capital Securitiescapital securities will correspond to the interest rate and
interest payment dates and other payment dates on the Junior Subordinated Debt
Securities.
The Companyjunior subordinated debt
securities.
Deferral of Distributions. Citigroup has the right under the Indentureindenture to
defer interest payments of interest on the Junior Subordinated Debt Securities by extending the interest payment
period from time to time on the Junior Subordinated Debt Securitiesjunior subordinated debt securities for an
Extension Periodextension period not exceeding consecutive interest periods
during which no interest shall be due and payable, PROVIDED, that no Extension Period maypayable. A deferral of interest
payments cannot extend, however, beyond the maturity of the Junior Subordinated Debt Securities.junior subordinated
debt securities. As a consequence of the Company'sCitigroup's extension of the interest
payment period, distributions on the Capital Securitiescapital securities would be
deferred (though such
distributions would continue to accrue with interest thereon compounded ,
since interest would continue to accrue on the Junior Subordinated Debt
Securities) during any such extended interest payment period. During an extension
period, the amount of distributions due to you would continue to accumulate and
such deferred distributions will themselves accrue interest. In the event that
the CompanyCitigroup exercises its right to extend the interest payment period, then (a)
the Companythen:
(1) Citigroup shall not declare or pay any dividend on, make any
distributions with respectrelating to, or redeem, purchase, acquire or make a
liquidation payment with
respectrelating to, any of its capital stock or make any
guarantee payment with respectrelating thereto (otherother than
(i)- repurchases, redemptions or other acquisitions of shares of capital
stock of the CompanyCitigroup in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants, (ii)consultants;
- as a result of an exchange or conversion of any class or series of
the Company'sCitigroup's capital stock for any other class or series of
the Company'sCitigroup's capital stock,stock; or
(iii)- the purchase of fractional interests in shares of the Company'sCitigroup's
capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged),exchanged; and
(b) the Company shall(2) Citigroup may not make any payment of interest on or principal of, (oror
premium, if any, on),on, or repay, repurchase or redeem, any debt
securities issued by the CompanyCitigroup which rank PARI PASSUequally with or junior to the
Junior Subordinated Debt Securities.junior subordinated debt securities.
The foregoing, however, will not apply to any stock dividends paid by the CompanyCitigroup
where the dividend stock is the same stock as that on which the dividend is
being paid. Prior to the termination of any Extension Period, the Companyextension period, Citigroup may
further extend such Extension Period; PROVIDED, thatextension period, so long as such Extension Period,extension period, together
with all such previous and further extensions thereof,of such period, may not exceed
consecutive interest periods; PROVIDED FURTHER, that no Extension Period mayperiods. An extension period cannot extend,
however, beyond the maturity of the Junior Subordinated Debt Securities.junior subordinated debt securities.
Upon the termination of any Extension Periodextension period and the payment of all amounts
then due, the
CompanyCitigroup may commence a new Extension Period, subject toextension period which must comply with
the above requirements. Consequently, there could be up to Extension Periodsextension periods of
varying lengths throughout the term of the Junior Subordinated Debt Securities. See "Description
of the Junior Subordinated Debt Securities-- Interest" and "--Option to Extend
Interest Payment Period."junior subordinated debt securities.
The Regular Trusteesregular trustees shall give the holders of the Capital Securitiescapital securities notice of
any Extension Periodextension period upon their receipt of notice thereof from the Company. See "Description of the Junior Subordinated Debt
Securities--Option To Extend Interest Payment Period."Citigroup. If
distributions are deferred, the deferred distributions and accrued interest thereonon
such distributions shall be paid to holders of record of the Capital Securitiescapital securities
as they appear on the books and records of Citigroup Capital on the record date
next following the termination of such deferral period. See "Description of the
Junior Subordinated Debt Securities -- Interest" and "-- Option to Extend
Interest Payment Period."
Payment of Distributions. Distributions on the Capital Securitiescapital securities will be made on the dates
payable to the extent that Citigroup Capital has funds available for the payment
of such distributions in the Property Account.its property account. Citigroup Capital's funds
available for distribution to the holders of the Capital Securitiescapital securities will be
limited to payments received from the CompanyCitigroup on the Junior Subordinated Debt Securities.
See "Description of the Junior Subordinated Debt Securities."junior subordinated debt
securities. The payment of distributions out of monies 14
held by Citigroup Capital
is guaranteed by the CompanyCitigroup to the extent set forth under "Description of
Guarantee." See "Description of the Junior Subordinated Debt Securities."
14
90
Distributions on the Capital Securitiescapital securities will be payable to the holders
named on the securities register of Citigroup Capital at the close of business
on the relevant record dates, which, asdates. As long as the Capital Securitiescapital securities remain in
book-entry only form, the record date will be one Business Day prior tobusiness day before the
relevant paymentdistribution dates. Such distributions will be paid through the Institutional Trusteeinstitutional
trustee who will hold amounts received in respect of the Junior Subordinated Debt Securitiesjunior subordinated
debt securities in the Property Account for the benefit of the holders of the
Trust Securities.
Subject totrust securities. Unless any applicable laws and regulations and the provisions
of the Declaration,declaration state otherwise, each such payment will be made as described
under "--Book-Entry"-- Book-Entry Only Issuance--TheIssuance -- The Depository Trust Company" below.
In the event that the Capital Securitiescapital securities do not continue to remain in
book-entry only form, the relevant record dates shallwill conform to the rules of any
securities exchange on which the Capital Securitiescapital securities are listed and, if none, the
Regular Trustees shallregular trustees will have the right to select relevant record dates, which shallwill
be more than 14 days but less than 60 days prior to the relevant payment dates.
In the event that any date on which distributions are to be made on the Capital Securitiescapital
securities is not a Business Day,business day, then payment of the distributions payable on
such date will be made on the next succeeding day which is a Business Day (andbusiness day, and
without any interest or other payment in respect of any such delay), except that,delay. However, if
such Business Daybusiness day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day,business day, in each case with the same force
and effect as if made on such record date. A "Business Day" shall mean"business day" means any day other
than Saturday, Sunday or any other day on which banking institutions in New York
City (in the State of New York) are permitted or required by any applicable law to close.
MANDATORY REDEMPTION OF TRUST SECURITIES
The Capital Securitiescapital securities have no stated maturity date but will be redeemed
upon the maturity of the Junior Subordinated Debt Securitiesjunior subordinated debt securities or to the extent
the Junior Subordinated Debt Securitiesjunior subordinated debt securities are redeemed. The Junior Subordinated
Debt Securitiesjunior subordinated
debt securities will mature on , 20 , and may be redeemed, in
whole or in part, at any time on or after , or. The junior
subordinated debt securities can also be redeemed at any time, in whole or in
part, in certain circumstances upon the occurrence of a Tax Event, an Investment
Company Event or a Regulatory Capital Event (as described under "Special Event
Redemption" below). See "Description of the Junior Subordinated Debt
Securities--Optional Redemption."Event.
Upon the maturity of the Junior Subordinated
Debt Securities,junior subordinated debt securities, the proceeds
of thetheir repayment thereof shall simultaneously be applied to redeem all outstanding
Trust Securitiestrust securities at the Redemption Price.redemption price. Upon the redemption of the Junior Subordinated Debt Securities,junior
subordinated debt securities, whether in whole or in part, (eithereither at the option
of the CompanyCitigroup or pursuant to a Tax Event, an Investment Company Event or a
Regulatory Capital Event),Event, Citigroup Capital will use the proceeds from suchcash it receives upon
the redemption shall simultaneously be applied to redeem Trust Securitiestrust securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Junior Subordinated Debt Securitiesjunior subordinated debt
securities so redeemed at the Redemption Price;
PROVIDED, thatredemption price. Before such redemption, holders
of Trust Securities shalltrust securities will be given not less than 30 nor more than 60 days'
notice of such redemption.notice. In the event that fewer than all of the outstanding Capital Securitiescapital securities
are to be redeemed, the Capital Securitiescapital securities will be redeemed PRO RATAon a ratable basis
as described under "--Book-Entry"-- Book-Entry Only Issuance--TheIssuance -- The Depository Trust Company"
below. See "-- Special Event Redemption" and "Description of the Junior
Subordinated Debt Securities -- Optional Redemption."
SPECIAL EVENT REDEMPTION
"Tax Event" means that the Regular Trustees shallregular trustees will have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a "Dissolution Tax Opinion") to the effectwhich states that, as a result of (a) anyany:
- amendment to, or change (including any announced prospective change) in, the laws (or anyor associated regulations thereunder) of the
United States or any political subdivision or taxing authority thereofof the
United States; or
therein or (b) any- amendment to, or change in, an interpretation or application of such laws
or regulations by any legislative body, court, governmental agency or
regulatory authority, (includingincluding the enactment of any legislation and the
publication of any judicial decision or regulatory 15
determination on or
after the date of this Prospectus), in either case after the
date of this Prospectus,prospectus,
15
91
there is more than an insubstantial risk that (i)that:
- Citigroup Capital would be subjectrequired to pay United States federal income
tax with
respectrelating to income accrued or received on the Junior Subordinated Debt
Securities, (ii)junior subordinated
debt securities;
- interest payable to Citigroup Capital on the Junior
Subordinated Debt Securitiesjunior subordinated debt
securities would not be deductible in whole or in part, by the CompanyCitigroup for United States federal
income tax purposespurposes; or
(iii)- Citigroup Capital would be subjectrequired to pay more than a DE MINIMISminimal amount of
other taxes, duties or other governmental charges.
"Investment Company Event" means that the Regular Trustees shallregular trustees will have
received an opinion of a nationally recognized independent counsel experienced
in practicing under the 1940 Act (as defined herein) to the effectsuch matters which states that, as a result of the occurrence of a change in
law or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that Citigroup Capital is or
will be considered an "investment company" which is required to be registered
under the Investment Company Act of 1940 as amended (the "1940 Act"), which Change in
1940 Act Law becomes effective on or after the date of this Prospectus.Act.
"Regulatory Capital Event" means a determination bythat if Citigroup determines, based on an
opinion of counsel experienced in such matters, (whowho may be an employee of
Citigroup or any of its affiliates),affiliates, that, as a result of
(a)- any amendment to, clarification of or change (including any announced prospective change) in applicable laws or
regulations or official interpretations thereof or policies with respect
thereto or
(b)- any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations,
which
amendment, clarification, change, pronouncement or decision is announced or is
effective after the date of this Prospectus, there is more than an insubstantial risk that the Capital Securitiescapital securities will no
longer constitute Tier I Capital of Citigroup or any bank holding company of
which Citigroup is a subsidiary (or its
equivalent) for purposes of the capital adequacy guidelines
or policies of the Board of Governors of the Federal Reserve System or its
successor as Citigroup's primary federal banking regulator.
SubjectThis prospectus refers to obtaining any required regulatory approval, if a Tax Event, an Investment Company Event or a
Regulatory Capital Company Event (each,as a "Special Event")
shall occurEvent." Provided that Citigroup
obtains any required regulatory approval, if a Special Event occurs and
be continuing, the Company shall have the right,continues, Citigroup may, upon not less than 30 nor more than 60 days' notice,
to redeem the Junior Subordinated Debt
Securities,junior subordinated debt securities, in whole or in part, for cash
within 90 days following the occurrence of such Special Event, and, followingEvent. Following such
redemption, Trust
Securitiestrust securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Junior Subordinated Debt Securitiesjunior subordinated debt securities so
redeemed shall be redeemed by Citigroup Capital at the Redemption Priceredemption price on a
PRO RATA basis; PROVIDED,
HOWEVER, that ifratable basis. If, however, at the time there is available to the CompanyCitigroup or
Citigroup Capital the opportunity to eliminate, within such 90-day period, the
Special Event by taking some ministerial action, such as filing a form or making
an election or pursuing some other similar reasonable measure that will have no
adverse effect on Citigroup Capital, the CompanyCitigroup or the holders of the Trust
Securities,trust
securities, then the CompanyCitigroup or Citigroup Capital will pursue such measure in
lieuinstead
of redemption.
DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Citigroup will have the right at any time to dissolve Citigroup Capital and,
afterCapital.
After satisfaction of the liabilities of creditors of Citigroup Capital as
provided by applicable law, toCitigroup Capital may cause Junior Subordinated Debt Securitiesjunior subordinated debt
securities to be distributed to the holders of the Capital Securitiescapital securities in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of the Capital
Securitiescapital securities then outstanding. Prior to any such
dissolution, Citigroup will obtain any required regulatory approvals.
If the Junior Subordinated Debt Securitiesjunior subordinated debt securities are distributed to the holders
of the Capital Securities, the Companycapital securities, Citigroup will use its best efforts to cause the
Junior Subordinated Debt Securitiesjunior subordinated debt securities to be listed on the NYSE or on such other
exchange as the Capital Securitiescapital securities are then listed.
16
92
After the date for any distribution of Junior Subordinated Debt Securitiesjunior subordinated debt securities
upon dissolution of Citigroup Capital, (i)Capital:
- the Capital Securitiescapital securities will no longer be deemed to be outstanding, (ii)outstanding;
- the securities depositary or its nominee, as the record holder of the
Capital Securities,capital securities, will receive a registered global certificate or
certificates representing the Junior Subordinated Debt Securitiesjunior subordinated debt securities to be
delivered upon such distribution,distribution; and
(iii)- any certificates representing Capital Securitiescapital securities not held by the
Depositarydepositary or its nominee will be deemed to represent Junior Subordinated Debt Securitiesjunior subordinated
debt securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical
to the distribution rate of, and with accrued and unpaid interest equal
to accrued and unpaid distributions on, such Capital Securitiescapital securities until
such certificates are presented to the CompanyCitigroup or its agent for transfer or
reissuance.
There can be no assurance as to the market prices for either the Capital
Securitiescapital
securities or the Junior Subordinated Debt Securitiesjunior subordinated debt securities that may be distributed in
exchange for the Capital Securitiescapital securities if a dissolution and liquidation of
Citigroup Capital were to occur. Accordingly,This means that the Capital Securitiescapital securities that an
investor may purchase, whether pursuant to the offer made herebyby this prospectus or
in the secondary market, or the Junior Subordinated Debt Securitiesjunior subordinated debt securities that an
investor may receive if a dissolution and liquidation of Citigroup Capital were
to occur, may trade at a discount to the price that the investor paid to
purchase the Capital Securitiescapital securities offered hereby.by this prospectus.
REDEMPTION PROCEDURES
Citigroup Capital may not redeem fewer than all of the outstanding Capital
Securitiescapital
securities unless all accrued and unpaid distributions have been paid on all
Capital Securitiescapital securities for all distribution periods terminating on or
prior to the date of redemption.
If (1) Citigroup Capital gives aan irrevocable notice of redemption in respect of the
Capital
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date,capital securities, and (2) if the CompanyCitigroup has paid to the Institutional Trusteeinstitutional trustee a
sufficient amount of cash in connection with the related redemption or maturity
of the Junior Subordinated Debt Securities,junior subordinated debt securities, then, by 12:00 noon, New York City
time, on the Institutional Trusteeredemption date, the institutional trustee will irrevocably deposit
with the Depositary (as defined
below)depositary funds sufficient to pay the applicable Redemption Price andredemption price.
Citigroup Capital will also give the Depositarydepositary irrevocable instructions and
authority to pay the Redemption Priceredemption price to the holders of the Capital Securities. See "--Book-Entry Only Issuance--The
Depository Trust Company." Ifcapital securities.
Once notice of redemption shall have beenis given and funds are irrevocably deposited, as required, then, immediately prior to the close of business on
the date of such deposit,
distributions will cease to accrue and all rights of holders of Capital Securities socapital
securities called for redemption will cease, except the right of the holders of such Capital Securities to
receive the Redemption Priceredemption price but without interest on such Redemption Price. In the event thatredemption price. If
any date fixed
for redemption of Capital Securitiesdate is not a Business Day,business day, then payment of the Redemption Priceredemption price
payable on such date will be made on the next succeeding day that is a Business Day (withoutbusiness
day, without any interest or other payment in respect of any such delay), except that,delay.
However, if such Business Daybusiness day falls in the next calendar year, such payment will
be made on the immediately preceding Business Day. In the
event thatbusiness day.
If payment of the Redemption Price in respect of Capital Securitiesredemption price for any capital securities is improperly
withheld or refused and not paid either by Citigroup Capital, or by the CompanyCitigroup
pursuant to the Guarantee,guarantee, distributions on such Capital Securitiescapital securities will
continue to accrue at the then applicable rate from the original redemption date
to the date of payment, in whichpayment. In this case, the actual payment date will be considered the
redemption date fixed for redemption for purposes of calculating the Redemption Price.redemption price. See
"-- Book-Entry Only Issuance -- The Depository Trust Company."
In the event that fewer than all of the outstanding Capital Securitiescapital securities are
to be redeemed, the Capital Securitiescapital securities will be redeemed in accordance with the
Depositary'sdepositary's standard procedures. See "--Book-Entry"-- Book-Entry Only Issuance--TheIssuance -- The
Depository Trust Company."
17
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the CompanyCitigroup or its subsidiaries may, at any time, and from time to time,
purchase outstanding Capital Securitiescapital securities by tender, in the open market or by
private agreement.agreement, provided that it complies with United States federal
securities laws and any other applicable laws.
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93
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event ofThis prospectus refers to any voluntary or involuntary liquidation,
dissolution, winding-up or termination of Citigroup Capital (eachas a "Liquidation"),"liquidation."
If a liquidation occurs, the holders of the Capital Securitiescapital securities will be entitled
to receive out of the assets of Citigroup Capital, after satisfaction of
liabilities to creditors, distributions in an amount equal to the aggregate of
the stated liquidation amount of $ per Capital Securitycapital security plus accrued and
unpaid distributions thereon to the date of payment (the "Liquidation Distribution"), unless, in connection
withpayment. But such Liquidation, Junior Subordinated Debt Securitiesholders won't
receive such distribution if Citigroup instead distributes on a ratable basis to
the holders of the capital securities junior subordinated debt securities in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and with
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Capital
Securitiescapital securities outstanding at such time have been distributed on a PRO RATA basis to
the holders of such Capital Securities.time. See "--Distribution"-- Distribution of the Junior
Subordinated Debt Securities."
If upon any such Liquidation, the Liquidation Distributionthis distribution can be paid only in part because Citigroup Capital has
insufficient assets available to pay in full the aggregate Liquidation Distribution,distribution, then
the amounts payable directly by Citigroup Capital on the Capital Securitiescapital securities
shall be paid on a PRO RATAratable basis. The holders of the Common Securitiescommon securities will be
entitled to receive distributions upon any such Liquidation PRO RATAliquidation on a ratable basis
with the holders of the Capital
Securities, except thatcapital securities. However, if a Declaration Eventdeclaration event of
Defaultdefault has occurred and is continuing, the Capital Securitiescapital securities shall have a
preference over the Common
Securitiescommon securities with regard to such distributions.
Pursuant to the Declaration,declaration, Citigroup Capital shall terminate (i)terminate:
(1) on , 20 , the expiration of the term of the Trust, (ii)Citigroup
Capital;
(2) upon the bankruptcy of the CompanyCitigroup or the holder of the Common Securities, (iii)common
securities;
(3) upon (a) the filing of a certificate of dissolution or its equivalent
with respect toregarding the holder of the Common Securitiescommon securities or the Company,Citigroup, the filing
of a certificate of cancellation with respect toregarding Citigroup Capital, or the
revocation of the charter of the holder of the Common Securitiescommon securities or
the CompanyCitigroup and (b) the expiration of 90 days after the date of
revocation without a reinstatement thereof, (iv)thereof;
(4) upon the distribution of Junior Subordinated Debt Securitiesjunior subordinated debt securities to holders
of Capital
Securities upon exercise of the Company's right to dissolve Citigroup Capital at
any time and distribute Junior Subordinated Debt Securities to holders of
Capital Securities, (v)capital securities;
(5) upon the entry of a decree of a judicial dissolution of the holder of
the Common Securities, the Companycommon securities, Citigroup or Citigroup Capital,Capital; or
(vi)(6) upon the redemption of all the Trust Securities.trust securities.
DECLARATION EVENTS OF DEFAULT
An "indenture event of default under the Indenture (an "Indenture Event of Default")
constitutesdefault" is an event of default under the Declaration with respectindenture
and also constitutes a "declaration event of default," which is an event of
default under the declaration relating to the Trust
Securities (a "Declaration Event of Default"); PROVIDED, that pursuanttrust securities. Pursuant to the
Declarationdeclaration, however, the holder of the Common Securitiescommon securities will be deemed to have
waived any Declaration Eventdeclaration event of Default with respectdefault relating to the Common Securitiescommon securities until
all Declaration Eventsdeclaration events of Default with respectdefault relating to the Capital Securitiescapital securities have been
cured, waived or otherwise eliminated. Until such Declaration Eventsdeclaration events of Default
with respectdefault
relating to the Capital Securitiescapital securities have been so cured, waived, or otherwise
eliminated, the Institutional Trusteeinstitutional trustee will be deemed to be acting solely on
behalf of the holders of the Capital Securities and onlycapital securities. Only the holders of the Capital Securitiescapital
securities will have the right to direct the Institutional Trustee with
respectinstitutional trustee as to certain matters
under the Declaration,declaration, and therefore the Indenture.indenture. In the event that any
Declaration Eventdeclaration event of Default with respectdefault relating to the Capital
Securitiescapital securities is waived by the
holders of the Capital Securitiescapital securities as provided in the Declaration,declaration, the holders of
Common Securitiescommon securities pursuant to the Declarationdeclaration have agreed that such waiver also
constitutes a waiver of such Declaration Eventdeclaration event of Default with respectdefault relating to the Common Securitiescommon
securities for all purposes 18
under the Declarationdeclaration without any further act, vote
or consent of the holders of Common Securities.common securities. See "--Voting"-- Voting Rights."
If the Institutional Trusteeinstitutional trustee fails to enforce its rights under the Junior
Subordinated Debt Securities,junior
subordinated debt securities, any holder of Capital Securitiescapital securities may directly
institute a legal proceeding against the CompanyCitigroup to enforce the Institutional
Trustee'sthese rights under the Junior Subordinated Debt Securities without
first instituting any legal proceeding againstsuing the Institutional Trusteeinstitutional trustee or any other person or entity. If a
Declaration Eventdeclaration event of
Default18
94
default has occurred and is continuing and such event is attributable to the
failure of the CompanyCitigroup to pay interest or principal on the Junior Subordinated Debt Securitiesjunior subordinated
debt securities on the date such interest or principal is otherwise payable, (oror
in the case of redemption, the redemption date),date, then a holder of Capital Securitiescapital
securities may also bring a direct action. This means that a holder may directly
institute a proceedingsue for enforcement of payment to such holder of the principal of or interest on
the Junior Subordinated Debt Securitiesjunior subordinated debt securities having a principal amount equal to the
aggregate liquidation amount of the Capital
Securitiescapital securities of such holder on or
after the respective due date specified in the Junior Subordinated Debt Securities withoutjunior subordinated debt
securities. Such holder need not first (i) directing(1) direct the Institutional Trusteeinstitutional trustee to
enforce the terms of the Junior Subordinated Debt
Securitiesjunior subordinated debt securities or (ii) instituting a legal proceeding against the Company(2) sue
Citigroup to enforce the Institutional Trustee'sinstitutional trustee's rights under the Junior Subordinated Debt
Securities.junior
subordinated debt securities.
In connection with such Direct Action, the Companydirect action, Citigroup will be subrogated to the
rights of such holder of Capital Securitiescapital securities under the Declarationdeclaration to the extent
of any payment made by the CompanyCitigroup to such holder of Capital Securitiescapital securities in such
Direct Action. Consequently, the Companydirect action. This means that Citigroup will be entitled to payment of amounts
that a holder of Capital Securitiescapital securities receives in respect of an unpaid
distribution that resulted in the bringing of a Direct
Actiondirect action to the extent that
such holder receives or has already received full payment with respectrelating to such
unpaid distribution from Citigroup Capital. The holders of Capital Securitiescapital securities
will not be able to exercise directly any other remedy available to the holders
of the Junior Subordinated Debt Securities.junior subordinated debt securities.
Upon the occurrence of an Indenture Eventindenture event of Default,default, the Institutional
Trusteeinstitutional
trustee as the sole holder of the Junior Subordinated Debt Securitiesjunior subordinated debt securities will have
the right under the Indentureindenture to declare the principal of and interest on the
Junior Subordinated Debt Securitiesjunior subordinated debt securities to be immediately due and payable. The
CompanyCitigroup
and Citigroup Capital are each required to file annually with the Institutional Trusteeinstitutional
trustee an officers' certificate as to its compliance with all conditions and
covenants under the Declaration.declaration.
VOTING RIGHTS
Except as described in this Prospectusprospectus under "Description of
Guarantee--ModificationGuarantee -- Modification of Guarantee; Assignment," and except as provided
under the Trust Act, the Trust Indenture Act and as otherwise required by law
and the Declaration,declaration, the holders of the Capital Securitiescapital securities will have no voting
rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, theThe holders of a majority in aggregate liquidation amount of the Capital Securitiescapital
securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to
the Institutional Trustee,
or directinstitutional trustee so long as the exercise of any trust or power conferred uponinstitutional trustee receives the Institutional
Trustee under the Declaration includingtax
opinion discussed below. The holders also have the right to direct the
Institutional
Trustee, as holder ofinstitutional trustee under the Junior Subordinated Debt Securities, to (i)declaration to:
(1) direct the
time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee,indenture
trustee, or exercising any trust or power conferred on the Indenture Trustee with respect to the Junior Subordinated Debt Securities, (ii)indenture
trustee;
(2) waive any past Indenture Eventindenture event of Defaultdefault that is waivable under
Section 5.13 of the Indenture, (iii)indenture;
(3) exercise any right to rescind or annul a declaration thatan acceleration of the principalmaturity
of all the Junior Subordinated Debt Securities shall be due and
payable,junior subordinated debt securities; or
(iv)(4) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debt Securities where such
consent shall be
required; PROVIDED, HOWEVER, that, whereis required.
Where a consent or action under the Indentureindenture would require the consent or
act of holders of more than a majority in principal amount of the Junior
19
Subordinated Debt Securities (a "Super Majority") affected thereby,junior
subordinated debt securities, or a "super majority," then only the
holders of at least such Super Majority in aggregate liquidation amount of the
Capital Securitiesa super majority
may direct the Institutional Trusteeinstitutional trustee to give such consent or take such action.
If the Institutional Trusteeinstitutional trustee fails to enforce its rights under the Junior Subordinated Debt Securities,junior
subordinated debt securities, any record holder of Capital Securitiescapital securities may
directly institute a legal proceeding against the Companysue Citigroup to enforce the Institutional Trustee'sinstitutional trustee's rights under the
Junior Subordinated Debt Securities
without first instituting any legal proceeding againstjunior subordinated debt securities. The record holder does not have to sue the
Institutional Trusteeinstitutional trustee or any other person or entity.entity before enforcing his rights.
The Institutional Trustee shallinstitutional trustee is required to notify all holders of the Capital Securitiescapital
securities of any notice of default received from the Indenture Trustee with respectindenture trustee. The
notice is required to the Junior Subordinated Debt Securities. Such
notice shall state that such Indenture Eventthe event of Defaultdefault also constitutes a
Declaration Eventdeclaration event of Default.default. Except with respect tofor directing the time, method and place of
conducting a proceeding for a remedy available to the Institutional
Trustee,institutional trustee, the
Institutional Trustee, as holder of the Junior Subordinated
Debentures, shallinstitutional trustee will not take any of the actions described in clauses (i)(1),
(ii)(2), (iii)(3) or (iv)(4) above unless the Institutional Trustee has obtainedinstitutional trustee receives an
19
95
opinion of a nationally recognized independent tax counsel experienced in such matterscounsel. The opinion must be
to the effect that, as a result of such action, Citigroup Capital will not fail
to be classified as a grantor trust for United States federal income tax
purposes.
In the eventIf the consent of the Institutional Trustee, as the holder of the
Junior Subordinated Debt Securities,institutional trustee is required under the Indenture with
respect toindenture
for any amendment, modification or termination of the Indenture,indenture, the
Institutional Trustee shallinstitutional trustee is required to request the written direction of the
holders of the Trust Securities with respect to such amendment, modification or termination and
shalltrust securities. Then, the institutional trustee will vote with respect to such amendment, modification or termination as
directed by a majority in liquidation amount of the Trust Securitiestrust securities voting
together as a single class; PROVIDED, HOWEVER, that whereclass. Where any amendment, modification or termination
under the Indentureindenture would require the consent of a Super Majority,super majority, however, the
Institutional Trusteeinstitutional trustee may only give such consent at the direction of the holders
of at least the proportion in aggregate liquidation
amountsame super majority of the Trust Securities which the relevant Super Majority representsholders of the aggregate principal amount of the Junior Subordinated Debt Securities
outstanding.trust securities. The
Institutional Trustee shall be under no obligationinstitutional trustee is not required to take any such action in accordance with
the directions of the holders of the Trust
Securitiestrust securities unless the Institutional Trusteeinstitutional
trustee has obtained ana tax opinion of a
nationally recognized independent tax counsel experienced in such matters to the effect that for United States federal income tax purposes Citigroup Capital will
not be classified as other than a grantor trust.described above.
A waiver of an Indenture Eventindenture event of Defaultdefault by the Institutional Trusteeinstitutional trustee at
the direction of the holders of the Capital Securitiescapital securities will constitute a waiver
of the corresponding Declaration Eventdeclaration event of Default.default.
Any required approval or direction of holders of Capital Securitiescapital securities may be
given at a separate meeting of holders of Capital Securitiescapital securities convened for such
purpose, at a meeting of all of the holders of Trust Securitiestrust securities or pursuant toby written
consent. The Regular Trusteesregular trustees will causemail to each holder of record of capital
securities a notice of any meeting at which such holders of Capital Securities are entitled to vote,
or of any matter upon which action by written consent of such holders is to be
taken, to be mailed to
each holder of record of Capital Securities.taken. Each such notice will include a statement setting forth the following
information:
(i)- the date of such meeting or the date by which such action is to be taken;
(ii)- a description of any resolution proposed for adoption at such meeting on
which such holders are entitled to vote or of such matter upon which
written consent is sought; and
(iii)- instructions for the delivery of proxies or consents.
No vote or consent of the holders of Capital Securitiescapital securities will be required
for Citigroup Capital to redeem and cancel Capital Securitiescapital securities or distribute
Junior Subordinated Debt
Securitiesjunior subordinated debt securities in accordance with the Declaration.
Notwithstandingdeclaration.
Despite the fact that holders of Capital Securitiescapital securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securitiescapital securities
that are owned at suchthe time by the CompanyCitigroup or any entity directly or indirectly
controlling or controlled by, or under direct or indirect 20
common control with,
the Company, shallCitigroup, will not be entitled to vote or consent and
shall, for purposes of such vote or consent,consent. Instead, these capital
securities will be treated as if such Capital
Securitiesthey were not outstanding.
The procedures by which holders of Capital Securitiescapital securities may exercise their
voting rights are described below. See "--Book-Entry"-- Book-Entry Only Issuance--TheIssuance -- The
Depository Trust Company."
Except in certain circumstances, holdersHolders of the Capital Securitiescapital securities generally will have no rights to appoint
or remove the Citigroup Trustees, whotrustees. Instead, the trustees may be appointed,
removed or replaced solely by the CompanyCitigroup as the indirect or direct holder of all
of the Common Securities.common securities.
MODIFICATION OF THE DECLARATION
The Declarationdeclaration may be modified and amended if approved by the Regular
Trustees (andregular
trustees, and in certain circumstances, the Institutional Trusteeinstitutional trustee and the
Delaware Trustee), PROVIDED, that, iftrustee. If, however, any proposed amendment provides for, or the
Regular Trusteesregular trustees otherwise propose to effect,
(i)(1) any action that would adversely affect the powers, preferences or
special rights of the Trust
Securities,trust securities, whether by way of amendment to
the Declarationdeclaration or otherwise or
(ii)(2) the dissolution, winding-up or termination of Citigroup Capital other
than pursuant to the terms of the Declaration,declaration,
20
96
then the holders of the Trust
Securitiestrust securities voting together as a single class will
be entitled to vote on such amendment or proposal and suchproposal. Such amendment or proposal
shall not be effective except with the approval of holders of at least a
majority in liquidation amount of the Trust Securitiestrust securities affected thereby; PROVIDED, that, ifthereby. If,
however, any amendment or proposal referred to in clause (i)(1) above would
adversely affect only the Capital
Securitiescapital securities or the Common Securities,common securities, then only
holders of the affected class will be entitled to vote on such amendment or
proposal and suchproposal. Such amendment or proposal shall not be effective except with the
approval of holders of a majority in liquidation amount of such class of Trust Securities.
Notwithstandingtrust
securities.
Despite the foregoing, no amendment or modification may be made to the
Declarationdeclaration if such amendment or modification would
(i)(1) cause Citigroup Capital to be classified for United States federal
income tax purposes as other than a grantor trust,
(ii)(2) reduce or otherwise adversely affect the powers of the Institutional Trusteeinstitutional
trustee or
(iii)(3) cause Citigroup Capital to be deemed an "investment company" which is
required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
Citigroup Capital may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body except as
described below. Citigroup Capital may, with the consent of the Regular Trusteesregular trustees
and without the consent of the holders of the Trust Securities,trust securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; PROVIDED, that (i)provided, that:
(1) such successor entity either
(x)(a) expressly assumes all of the obligations of Citigroup Capital under
the Trust
Securitiestrust securities or
(y)(b) substitutes for the Capital Securitiescapital securities other successor securities
having substantially the same terms as the Trust Securities (the "Successor
Securities"),trust securities, so long
as the Successor Securitiessuccessor securities rank the same as the Trust
Securitiestrust securities
rank with respect toregarding distributions and payments upon liquidation,
redemption and otherwise, (ii) the Companyotherwise;
(2) Citigroup expressly acknowledges a trustee of such successor entity
possessing the same powers and duties as the Institutional
Trustee,institutional trustee, in
its capacity as the holder of the Junior Subordinated Debt
Securities, (iii)junior subordinated debt securities;
(3) the Capital Securitiescapital securities or any Successor Securitiessuccessor securities are listed, or any
Successor Securitiessuccessor securities will be listed upon notification of issuance, on
any national securities exchange or with another organization on which
the Capital
Securitiescapital securities are then listed or quoted, (iv)quoted;
(4) such merger, consolidation, amalgamation or replacement does not cause
the Capital Securities (includingcapital securities, including any Successor Securities)successor securities, to be
downgraded by any nationally recognized statistical rating
organization, (v)organization;
(5) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the holders
of the Trust Securities (includingtrust securities, including any Successor Securities)successor securities, in any
material respect, (otherother than in connection with respect to any dilution of the
holders' interest in the new entity), (vi)entity;
(6) such
21
successor entity has a purpose identical to that of Citigroup
Capital, (vii)Capital;
(7) prior to such merger, consolidation, amalgamation or replacement,
Citigroup Capital has received an opinion of a nationally recognized
independent counsel to Citigroup Capital experienced in such matters to
the effect that
(A)21
97
(a) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the
holders of the Trust Securities
(includingtrust securities, including any Successor Securities)successor securities,
in any material respect, (otherother than in connection with
respect to any dilution
of the holders' interest in the new entity),entity; and
(B)(b) following such merger, consolidation, amalgamation or replacement,
neither Citigroup Capital nor such successor entity will be required
to register as an "investment company" under the 1940 Act; and
(viii) the Company(8) Citigroup guarantees the obligations of such successor entity under the
Successor Securitiessuccessor securities at least to the extent provided by the Guarantee. Notwithstandingguarantee.
Despite the foregoing, Citigroup Capital shall not, except with the consent
of holders of 100% in liquidation amount of the Trust Securities,trust securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
in the opinion of a nationally recognized independent tax counsel experienced in
such matters, such consolidation, amalgamation, merger or replacement would
cause Citigroup Capital or the Successor Entitysuccessor entity to be classified as other than a
grantor trust for United States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE--THEISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depositorycapital securities will be book-entry securities. Upon issuance, all
book-entry securities will be represented by one or more fully registered global
capital securities, without distribution coupons. Each global capital security
will be deposited with, or on behalf of, The Depositary Trust Company, ("DTC")a
securities depository, and will act as securities depositary for
the Capital Securities. The Capital Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). OneDTC or more fully-registered global Capital Securities certificates,
representinga nominee of
DTC. DTC will thus be the total aggregate numberonly registered holder of Capital Securities, will be issuedthese capital securities and
will be depositedconsidered the sole owner of the capital securities for purposes of the
declaration.
Purchasers of capital securities may only hold interests in the global
notes through DTC if they are a participant in the DTC system. Purchasers may
also hold interests through a securities intermediary -- banks, brokerage houses
and other institutions that maintain securities accounts for customers -- that
has an account with DTC. This meansDTC or its nominee. DTC will maintain accounts showing the
capital security holdings of its participants, and these participants will in
turn maintain accounts showing the capital security holdings of their customers.
Some of these customers may themselves be securities intermediaries holding
capital securities for their customers. Thus, each beneficial owner of a
book-entry capital security will hold that Citigroup Capitalcapital security indirectly through a
hierarchy of intermediaries, with DTC at the "top" and the beneficial owner's
own securities intermediary at the "bottom."
The capital securities of each beneficial owner of a book-entry security
will be evidenced solely by entries on the books of the beneficial owner's
securities intermediary. The actual purchaser of the capital securities will
generally not be entitled to have the capital securities represented by the
global securities registered in its name and will not issuebe considered the owner
under the declaration. In most cases, a beneficial owner will also not be able
to obtain a paper certificate evidencing the holder's ownership of capital
securities. The book-entry system for holding capital securities eliminates the
need for physical movement of certificates toand is the purchasers forsystem through which most
publicly traded common stock is held in the Capital Securities.
TheUnited States. However, the laws of
some jurisdictions require that certainsome purchasers of securities to take physical
delivery of their securities in definitive form. SuchThese laws may impair the
ability to transfer book-entry securities.
A beneficial interests in the global Capital Securities asowner of book-entry securities represented by a global certificate.capital
security may exchange the securities for definitive (paper) capital securities
only if:
(a) DTC is unwilling or unable to continue as depositary for such global
capital security and Citigroup is unable to find a qualified
replacement for DTC within 90 days;
(b) at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934; or
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98
(c) Citigroup in its sole discretion decides to allow some or all
book-entry securities to be exchangeable for definitive capital
securities in registered form.
Unless we indicate otherwise in the applicable prospectus supplement, any
global capital security that is exchangeable will be exchangeable in whole for
definitive notes in registered form, with the same terms and of an equal
aggregate principal amount, in denominations of $ and whole multiples
of $ . Definitive capital securities will be registered in the name or
names of the person or persons specified by DTC in a written instruction to the
registrar of the securities. DTC may base its written instruction upon
directions it receives from its participants.
In this prospectus, for book-entry capital securities, references to
actions taken by capital security holders will mean actions taken by DTC upon
instructions from its participants, and references to payments and notices of
redemption to capital security holders will mean payments and notices of
redemption to DTC as the registered holder of the capital securities for
distribution to participants in accordance with DTC's procedures.
DTC is a limited-purposelimited purpose trust company organized under the laws of the
State of New York, Banking
Law, a "banking organization" within the meaning of the New York
Banking Law,banking law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Sectionunder section 17A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the NYSE and The Nasdaq-Amex Market Group. Access to
the DTC system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear transactions through or maintain a
direct or indirect custodial relationship with a Direct Participant either
directly or indirectly ("Indirect Participants").1934. The
rules applicable to DTC and its Participantsparticipants are on file with the SecuritiesSEC.
Citigroup and Exchange Commission.
Purchasesthe Trustees will not have any responsibility or liability
for any aspect of Capital Securities within the DTC system must berecords relating to, or payments made by or
through Direct Participants, which will receive a credit for the Capital
Securities on DTC's records. Theaccount of,
beneficial ownership interest of each actual purchaser of
each Capital Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Capital Securities.
Transfers of ownership
22
interests in the Capital Securities are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
the Capital Securities, except in the event that use of the book-entry systemsecurities or for the Capital Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Capital Securities with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Capital Securities. DTC'smaintaining,
supervising or reviewing any records reflect only
the identity of the Direct Participants to whose accounts such Capital
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Any redemption notices will be sent by Citigroup Capital to Cede & Co. DTC
will then inform the Direct Participants, who will then contact the Beneficial
Owners. If less than all of the Capital Securities are being redeemed, DTC will
reduce the amount of the interest of each Direct Participant in such Capital
Securities in accordance with its procedures.
Although voting with respectrelating to the Capital Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to Capital Securities. Under its usual procedures, DTC
would mail an Omnibus Proxy to Citigroup Capital as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co. consenting or voting rights to
those Direct Participants to whose accounts the Capital Securities are credited
on the record date (identified in a listing attached to the Omnibus Proxy). The
Company and Citigroup Capital believe that the arrangements among DTC, Direct
and Indirect Participants, and Beneficial Owners will enable the Beneficial
Owners to exercise rights equivalent in substance to the rights that can be
directly exercised by a holder of a beneficial interest in Citigroup Capital.
Distribution payments on the Capital Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in "street name," and such
payments will be the responsibility of such Participant and not of DTC,
Citigroup Capital or the Company, subject to any statutory or regulatory
requirements to the contrary that may be in effect from time to time. Payment of
distributions to DTC is the responsibility of Citigroup Capital, disbursement of
such payments to Direct Participants is the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Capital Security
certificate will not be entitled to receive physical delivery of Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Capital Securities.ownership
interests.
DTC may discontinue providing its services as securities depositary with
respect to the Capital Securitiescapital securities at any time by giving reasonable notice to
Citigroup Capital. Under such circumstances, in the event that a successor
securities depositary is not obtained, Capital Securitiescapital securities certificates are
required to be printed and delivered. Additionally, the Regular Trustees (withregular trustees, with
the consent of the Company)Citigroup, may decide to discontinue use of the system of
book-entry transfers through DTC (oror any 23
successor depositary)depositary with respect to the
Capital Securities.capital securities. In that event, certificates for the Capital Securitiescapital securities will
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the CompanyCitigroup and Citigroup Capital believe to
be reliable, but neither the CompanyCitigroup nor Citigroup Capital takes responsibility
for the accuracy thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, priorPrior to the occurrence of a default with respectrelating to the Trust Securities,trust securities, the
institutional trustee undertakes to perform only such duties as are specifically
set forth in the Declaration and, afterdeclaration. After such a default, shallthe institutional trustee
will exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provisions, the Institutional
TrusteeThe institutional trustee is under no
obligation to exercise any of the powers vested in it by the Declarationdeclaration at the
request of any holder of Capital Securities,capital securities unless offered reasonable indemnity
by such holder against the costs, expenses and liabilities which might be
incurred thereby. NotwithstandingDespite the foregoing, the holders of Capital Securitiescapital securities will
not be required to offer such indemnity in the event such holders, by exercising
their voting rights, direct the Institutional
Trusteeinstitutional trustee to take any action
following a Declaration Eventdeclaration event of Default.default.
PAYING AGENT
In the event that the Capital Securitiescapital securities do not remain in book-entry only
form, the following provisions will apply:
The Institutional Trustee- the institutional trustee will act as paying agent and may designate an
additional or substitute paying agent at any time.
Registrationtime;
23
99
- registration of transfers of Capital Securitiescapital securities will be effected without
charge by or on behalf of Citigroup Capital, but upon payment, (withwith the
giving of such indemnity as Citigroup Capital or the Company may require)require,
in respect of any tax or other government charges that may be imposed in
relation to it.it; and
- Citigroup Capital will not be required to register or cause to be
registered the transfer of Capital Securitiescapital securities after such Capital Securitiescapital
securities have been called for redemption.
GOVERNING LAW
The Declarationdeclaration and the Capital Securitiescapital securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trusteesregular trustees are authorized and directed to operate Citigroup
Capital in such a way so that Citigroup Capital will not be required to register
as an "investment company" under the 1940 Act or be characterized as other than
a grantor trust for United States federal income tax purposes. The CompanyCitigroup is
authorized and directed to conduct its affairs so that the Junior Subordinated
Debt Securitiesjunior subordinated
debt securities will be treated as indebtedness of the CompanyCitigroup for United States
federal income tax purposes. In this connection, the CompanyCitigroup and the Regular
Trusteesregular
trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of Citigroup Capital or the certificate of
incorporation of the Company,Citigroup, that each of the CompanyCitigroup and the Regular Trusteesregular trustees
determine in their discretion to be necessary or desirable to achieve such end,
as long as such action does not adversely affect the interests of the holders of
the Capital Securitiescapital securities or vary the terms thereof.of the capital securities.
Holders of the Capital Securitiescapital securities have no preemptive rights.
24
100
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the Junior
Subordinated Debt Securitiesjunior
subordinated debt securities in which Citigroup Capital will invest the proceeds
from the issuance and sale of the Trust Securities.trust securities. The following description doesis
not purportintended to be complete and is subject to, and is qualified in its
entirety by reference to, the Indenture,indenture, dated as of
October 7, 1996, (asas supplemented, the "Indenture"), between the CompanyCitigroup and The Chase Manhattan
Bank, as Trustee (the "Indenture Trustee"),the indenture trustee, the form of which is filed as an exhibit to the
Registration Statementregistration statement of which this Prospectusprospectus forms a part;part and the Trust
Indenture Act. CertainSeveral capitalized terms used herein are defined in the
Indenture.indenture. Wherever particular sections or defined terms of the Indentureindenture are
referred to, such sections or defined terms are incorporated herein by reference
as part of the statement made, and the statement is qualified in its entirety by
such reference.
Under certain circumstances discussed more fully below involving the dissolution of
Citigroup Capital, subject to obtainingprovided that any required regulatory approval Junior Subordinated Debt
Securitiesis obtained,
junior subordinated debt securities will be distributed to the holders of the
Trust Securitiestrust securities in liquidation of Citigroup Capital. See "Description of the
Capital Securities--Securities -- Special Event Redemption or Distribution.Redemption."
If the Junior Subordinated Debt Securitiesjunior subordinated debt securities are distributed to the holders
of the Capital Securities, the Companycapital securities, Citigroup will use its best efforts to have the
Junior
Subordinated Debt Securitiesjunior subordinated debt securities listed on the NYSE or on such other national
securities exchange or similar organization on which the Capital Securitiescapital securities are
then listed or quoted.
GENERAL
The Junior Subordinated Debt Securitiesjunior subordinated debt securities will be issued as unsecured debt
under the Indenture.indenture. The Junior Subordinated Debt Securitiesjunior subordinated debt securities will be limited in
aggregate principal amount to approximately $ , such. This amount beingis the sum of
the aggregate stated liquidation amount of the Capital Securitiescapital securities and the
capital contributed by the CompanyCitigroup to Citigroup Capital in exchange for the Common Securities (the "Citigroup Payment").common
securities. (Section 3.1)
The Junior Subordinated Debt Securities are not subject to a sinking fund
provision.
The entire principal amount of the Junior Subordinated Debt
Securitiesjunior subordinated debt securities will
mature and become due and payable, together with any accrued and unpaid interest
thereon including Compound Interestcompound interest (as defined herein) and Additional Interestadditional interest
(as defined herein), if any, on , 20 .
If Junior Subordinated Debt Securitiesjunior subordinated debt securities are distributed to holders of
Capital
Securitiescapital securities in liquidation of such holders' interests in Citigroup
Capital, such Junior Subordinated Debt Securitiesjunior subordinated debt securities will initially be issued in
the form of one or more Global Securitiesglobal securities (as defined under "Book-Entry and Settlement"described below). As described herein,in
this prospectus, under certain limited circumstances, Junior Subordinated
Debt Securitiesjunior subordinated debt
securities may be issued in certificated form in exchange for a Global
Security. See "Book-Entry and Settlement" below.global security.
In the event that Junior
Subordinated Debt Securitiesjunior subordinated debt securities are issued in certificated
form, such Junior
Subordinated Debt Securitiesjunior subordinated debt securities will be in denominations of
$ and integral multiples thereof and may be transferred or exchanged at the
offices described below. Payments on Junior Subordinated Debt Securitiesjunior subordinated debt securities issued
as a Global
Securityglobal security will be made to DTC, to a successor depositary or, in the
event that no depositary is used, to a Paying Agentpaying agent for the Junior Subordinated Debt
Securities.junior subordinated
debt securities. In the event Junior Subordinated Debt Securitiesjunior subordinated debt securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securitiesjunior subordinated debt securities will be registrable and Junior Subordinated
Debt Securitiesjunior subordinated
debt securities will be exchangeable for Junior Subordinated Debt Securitiesjunior subordinated debt securities of
other denominations of a like aggregate principal amount at the corporate trust
office of the Indenture Trusteeindenture trustee in New York, New York; PROVIDED, that paymentYork. Payment of interest may
be made at the option of the CompanyCitigroup by check mailed to the address of the persons
entitled thereto. 25
The CompanySee "-Book-Entry and Settlement."
Citigroup does not intend to issue and sell the Junior Subordinated Debt
Securitiesjunior subordinated debt
securities to any purchasers other than Citigroup Capital.
There are no covenants or provisions in the Indentureindenture that would afford the
holders of the Junior Subordinated Debt Securitiesjunior subordinated debt securities protection in the event of a
highly leveraged transaction, reorganization, restructuring, merger or similar
transaction involving the CompanyCitigroup that may adversely affect such holders.
25
101
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indentureindenture provides that the CompanyCitigroup will not consolidate with or merge
into any other corporation or convey, transfer or lease its assets substantially
as an entirety unless (a)unless:
- the successor is a corporation organized in the United States and
expressly assumes the due and punctual payment of the principal of, (andand
premium, if any)any, and interest on all Junior Subordinated Debt Securitiesjunior subordinated debt securities
issued thereunder and the performance of every other covenant of the
Indentureindenture on the part of the CompanyCitigroup; and
(b)- immediately thereafter no Eventevent of Defaultdefault and no event which, after
notice or lapse of time, or both, would become an Eventevent of Default,default, shall
have happened and be continuing.
Upon any such consolidation, merger, conveyance or transfer, the successor
corporation shall succeed to and be substituted for the CompanyCitigroup under the
Indenture and thereafterindenture. Thereafter the predecessor corporation shall be relieved of all
obligations and covenants under the Indentureindenture and the Junior Subordinated Debt Securities.junior subordinated debt
securities. (Sections 8.1 and 8.2)
SUBORDINATION
The Indentureindenture provides that the Junior Subordinated Debt Securitiesjunior subordinated debt securities are
subordinated and junior in right of payment to all Senior Indebtedness (as
defined below) of the Company.Citigroup. This means that no payment of principal, (includingincluding
redemption payments),payments, premium, if any, or interest on the Junior
Subordinated Debt Securitiesjunior subordinated
debt securities may be made if (i)if:
- any Senior Indebtedness of the
CompanyCitigroup has not been paid when due and any
applicable grace period with respectrelating to such default has ended and such
default has not been cured or waived or ceased to exist,exist; or
(ii)- the maturity of any Senior Indebtedness of the CompanyCitigroup has been accelerated
because of a default.
Upon any distribution of assets of the CompanyCitigroup to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all principal, premium, if any, and interest due or to become due on all Senior
Indebtedness of the CompanyCitigroup must be paid in full before the holders of Junior Subordinated Debt Securitiesjunior
subordinated debt securities are entitled to receive or retain any payment. Upon
satisfaction of all claims related to all Senior Indebtedness of the CompanyCitigroup then
outstanding, the rights of the holders of the Junior Subordinated Debt Securitiesjunior subordinated debt
securities will be subrogated to the rights of the holders of Senior
Indebtedness of the CompanyCitigroup to receive payments or distributions applicable to
Senior Indebtedness until all amounts owing on the Junior Subordinated Debt Securitiesjunior subordinated debt
securities are paid in full.
The term "Senior Indebtedness" means, with respect to the Company, (i)Citigroup:
(1) the principal, premium, if any, and interest in respect of (A)(a)
indebtedness of such
obligor for money borrowed and (B)(b) indebtedness evidenced by securities,
notes, debentures, bonds or other similar instruments issued by such obligor, (ii)Citigroup;
(2) all capital lease obligations of such obligor, (iii)Citigroup;
(3) all obligations of such obligorCitigroup issued or assumed as the deferred purchase
price of property, all conditional sale obligations of such obligorCitigroup and all
obligations of such obligorCitigroup under any conditional sale or title retention
agreement, (butbut excluding trade accounts payable arising in the ordinary course
of business), (iv)business;
(4) all obligations, contingent or otherwise, of such obligorCitigroup in respect of
any letters of credit, banker's acceptance, security purchase facilities or
similar credit transactions, (v)transactions;
(5) all obligations in respect of interest rate swap, cap or other
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements, (vi)agreements;
26
102
(6) all obligations of the type referred to in clauses (i)(1) through (v)(5)
above of other persons for the payment of which such obligorCitigroup is responsible or
26
liable as obligor, guarantor or otherwiseotherwise; and
(vii)(7) all obligations of the type referred to in clauses (i)(1) through (vi)(6)
above of other persons secured by any lien on any property or asset of
such obligor (whetherCitigroup, whether or not such obligation is assumed by such obligor),obligor, except for
(1)(A) any such indebtedness that is by its terms subordinated to or
PARI PASSUequally with the Junior Subordinated Debt Securitiesjunior subordinated debt securities and
(2)(B) any indebtedness between or among such obligorCitigroup or its affiliates,
including all other debt securities and guarantees in respect of
those debt securities, issued to (a) any other Citigroup Trusttrust or a
trustee of such trust and (b) any other trust, or a trustee of such
trust, partnership or other entity affiliated with the CompanyCitigroup that is
a financing vehicle of the Company (a
"financing entity")Citigroup in connection with the issuance by
such financing entityvehicle of preferredcapital securities or other securities
guaranteed by the CompanyCitigroup pursuant to an instrument that ranks PARI PASSUequally
with, or junior to, the Guarantee.guarantee.
Such Senior Indebtedness shall continue to be Senior Indebtedness and be
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
The Indentureindenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company.Citigroup.
OPTIONAL REDEMPTION
Subject to obtaining any required regulatory approval, the CompanyCitigroup shall have the right to redeem the Junior Subordinated Debt Securities,junior subordinated debt
securities, in whole or in part, from time to time, on or after ,
or at any time in certain
circumstances upon the occurrence of a Tax Event, an Investment Company Event
or a Regulatory Capital Event, as described under "Description of the Capital
Securities--Special Event Redemption,"above, upon not less than 30 nor
more than 60 days' notice, at anotice. The redemption price will be equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest, including
Additional Interestadditional interest (as defined herein)described below), if any, to the redemption date. If a
partial redemption of the Capital Securitiescapital securities resulting from a partial redemption
of the Junior
Subordinated Debt Securitiesjunior subordinated debt securities would result in the delisting of the
Capital
Securities, the Companycapital securities, Citigroup may only redeem the Junior Subordinated Debt Securitiesjunior subordinated debt
securities in whole. (Section 11.2) Citigroup may need regulatory approval to
redeem the junior subordinated debt securities. See "Description of the Capital
Securities -- Special Event Redemption."
INTEREST
Each Junior Subordinated Debt Security shallThe junior subordinated debt securities will bear interest at the annual
rate of %, from and including the original date of issuance, payable
in arrears on of each year, (eachcommencing
. Each date on which interest is paid is called an "Interest Payment Date"),
commencing"interest
payment date." Interest will be paid to the person in whose name such Junior Subordinated Debt
Securityjunior
subordinated debt security is registered, subject to certainwith limited exceptions, at the close
of business on the Business Daybusiness day next preceding such Interest Payment Date.interest payment date. In
the event the Junior Subordinated Debt Securitiesjunior subordinated debt securities shall not continue to remain
in book-entry only form, the CompanyCitigroup shall have the right to select record dates,
which shall be more than 14 days but less than 60 days prior to the Interest Payment Date.interest
payment date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full period for which interest is computed will be computed on the
basis of the actual number of days elapsed per 30-day month. In the event that
any date on which interest is payable on the Junior
Subordinated Debt Securitiesjunior subordinated debt securities
is not a Business Day,business day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business
Day (andbusiness day, and without any interest
or other payment in respect of any such delay),
except that,delay. However, if such Business Daybusiness day is
in the next succeeding calendar year, then such payment shall be made on the
immediately preceding Business Day,business day, in each case with the same force and effect
as if made on such date.
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103
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The CompanyCitigroup can defer interest payments by extending the interest payment
period for a period not exceeding consecutive periods, PROVIDED, thatperiods. However,
no Extension Periodextension period may extend beyond the maturity of the Junior Subordinated Debt
Securities, atjunior subordinated
debt securities. At the end of which Extension Period, the Companysuch extension period, Citigroup shall pay all
interest then accrued and unpaid, (includingincluding any Additional Interest)additional interest as described
under "Additional Interest" below, together with interest thereon compounded
at the rate specified for the Junior
Subordinated Debt Securitiesjunior subordinated debt securities
to the extent permitted by applicable law
("Compound Interest"); PROVIDED FURTHER, that duringlaw. During any such Extension Period,
(a) the Companyextension period:
- Citigroup shall not declare or pay any dividend on, make any
distributions with respectrelating to, or redeem, purchase, acquire or make a
liquidation payment with
respectrelating to, any of its capital stock or make any
guarantee payment with respect thereto (otherother than
(i)- repurchases, redemptions or other acquisitions of shares of capital
stock of the CompanyCitigroup in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants, (ii)consultants;
- as a result of an exchange or conversion of any class or series of
the Company'sCitigroup's capital stock for any other class or series of the Company'sCitigroup's
capital stock,stock; or
(iii)- the purchase of fractional interests in shares of the Company'sCitigroup's capital
stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged),exchanged; and
(b) the Company- Citigroup shall not make any payment of interest, onprincipal or principal of (or premium,
if any, on),on, or repay, repurchase or redeem, any debt securities issued by
the CompanyCitigroup which rank PARI PASSUequally with or junior to the Junior Subordinated Debt Securities.junior subordinated
debt securities.
The foregoing, however, will not apply to any stock dividends paid by the CompanyCitigroup
where the dividend stock is the same stock as that on which the dividend is
being paid. Prior to the termination of any Extension Period, the Companyextension period, Citigroup may
further defer payments of interest by extending such Extension Period; PROVIDED, HOWEVER, that such
Extension Period,extension period. Such
extension period, including all such previous and further extensions, however,
may not exceed consecutive interest periods, (includingincluding the
interest period in which notice of such Extension Period (as described below)extension period is
given);
PROVIDED FURTHER, that no Extension Periodgiven. No extension period, however, may extend beyond the maturity of the
Junior Subordinated Debt Securities.junior subordinated debt securities. Upon the termination of any Extension
Periodextension
period and the payment of all amounts then due, the CompanyCitigroup may commence a new
Extension Period, subject toextension period, if consistent with the terms set forth in this section. No
interest during an Extension Period,extension period, except at the end thereof,of such period, shall be
due and payable.
The CompanyCitigroup has no present intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior Subordinated
Debt Securities.junior
subordinated debt securities. If the Institutional Trustee shall beinstitutional trustee is the sole holder of
the Junior Subordinated Debt Securities, the Companyjunior subordinated debt securities, Citigroup shall give the Regular Trusteesregular
trustees and the Institutional Trusteeinstitutional trustee notice of its selection of such Extension Periodextension
period one Business Daybusiness day prior to the earlier of
(i)(1) the date distributions on the Capital Securitiescapital securities would be payable, if
not for such Extension Period,extension period, or
(ii)(2) the date the Regular Trusteesregular trustees are required to give notice to the New York Stock
Exchange (orNYSE
or other applicable self-regulatory organization)organization or to holders of the
Capital Securitiescapital securities of the record date or the date such distribution
would be payable, if not for such Extension Period,extension period,
but in any event one Business Daybusiness day prior to such record date. The Regular Trusteesregular
trustees shall give notice of the
Company'sCitigroup's selection of such Extension Periodextension period to
the holders of the Capital
Securities.capital securities. If the Institutional Trustee shallinstitutional trustee is not be the
sole holder of the Junior Subordinated Debt Securities, the Companyjunior subordinated debt securities, Citigroup shall give the
holders of
28
104
the Junior Subordinated Debt Securitiesjunior subordinated debt securities notice of its selection of such
Extension
Periodextension period ten Business Daysbusiness days prior to the earlier of
(i)(1) the next succeeding Interest Payment Dateinterest payment date or
(ii)(2) the date upon which the CompanyCitigroup is required to give notice to the New York Stock Exchange (orNYSE or
other applicable self-regulatory organization)organization or to holders of the
Junior Subordinated Debt Securitiesjunior subordinated debt securities of the record or payment date of
such related interest payment. (Sections 13.1 and 13.2)
ADDITIONAL INTEREST
If at any time Citigroup Capital is required to pay any taxes, duties,
assessments or governmental charges of whatever nature, (otherother than withholding
taxes)taxes, imposed by the United States, or any other taxing authority, then
the
CompanyCitigroup will be required to pay additional interest ("Additional Interest")
28
on the Junior Subordinated Debt Securities.junior subordinated
debt securities. The amount of any Additional
Interestadditional interest will be an amount
sufficient so that the net amounts received and retained by Citigroup Capital
after paying any such taxes, duties, assessments or other governmental charges
will be not less than the amounts Citigroup Capital would have received had no
such taxes, duties, assessments or other governmental charges been imposed. This
means that Citigroup Capital will be in the same position it would have been if
it did not have to pay such taxes, duties, assessments or other charges.
INDENTURE EVENTS OF DEFAULT
The Indentureindenture provides that the following are Eventsevents of Default with respectdefault relating to
the Junior Subordinated Debt Securities: (a)junior subordinated debt securities:
(1) default in the payment of the principal of, (oror premium, if any, on)on, any
Junior Subordinated Debt Securityjunior subordinated debt security at its maturity;
(b)(2) default for 30 days in the payment of any installment of interest on
any Junior Subordinated Debt Security; (c)junior subordinated debt security;
(3) default for 90 days after written notice in the performance of any
other covenant in respect of the Junior
Subordinated Debt Securities; (d) certainjunior subordinated debt securities;
(4) specified events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of the
Company;Citigroup; and
(e)(5) any other Eventevent of Defaultdefault provided in the applicable resolution of the
Boardboard of Directorsdirectors or supplemental indenture under which the Junior Subordinated Debt Securitiesjunior
subordinated debt securities are issued.
The Indenture Trusteeindenture trustee may withhold notice to the holders of the Junior Subordinated Debt Securitiesjunior
subordinated debt securities of any default with respect thereto, (exceptexcept in the
payment of principal, premium or interest)interest, if it considers such withholding to
be in the interests of such holders. (Section 5.1)
If any Indenture Eventindenture event of Defaultdefault shall occur and be continuing, the
Institutional Trustee,institutional trustee, as the holder of the Junior Subordinated Debt Securities,junior subordinated debt securities,
will have the right to declare the principal of and the interest on the Junior
Subordinated Debt Securities (includingjunior
subordinated debt securities, including any Compound Interestcompound interest and Additional
Interest,additional
interest, if any)any, and any other amounts payable under the Indentureindenture to be
forthwithimmediately due and payable and topayable. The institutional trustee may also enforce its
other rights as a creditor with
respectrelating to the Junior Subordinated Debt Securities.junior subordinated debt securities.
(Section 5.2) An Indenture
Eventindenture event of Defaultdefault also constitutes a Declaration Eventdeclaration event
of Default.default. The holders of Capital Securitiescapital securities in certainlimited circumstances have the
right to direct the Institutional Trusteeinstitutional trustee to exercise its rights as the holder
of the Junior
Subordinated Debt Securities.junior subordinated debt securities. See "Description of the Capital
Securities--DeclarationSecurities -- Declaration Events of Default" and "--Voting"-- Voting Rights."
NotwithstandingDespite the foregoing, if a Declaration Eventdeclaration event of Defaultdefault has occurred and
is continuing and such event is attributable to the failure of the
CompanyCitigroup to pay
interest or principal on the Junior Subordinated Debt Securities
on the datejunior subordinated debt securities when such
interest or principal is otherwise payable, the CompanyCitigroup acknowledges that, in such event, a
holder of Capital Securitiescapital securities may institute a
Direct Actionsue for payment on or after the respective due
date specified in the Junior Subordinated Debt Securities. The Companyjunior
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105
subordinated debt securities. Citigroup may not amend the Indentureindenture to remove
the foregoingthis right to bring a Direct Actiondirect action without the prior written consent of all of
the holders of Capital Securitiescapital securities of Citigroup Capital. NotwithstandingDespite any payment made
to such holder of Capital Securitiescapital securities by the
CompanyCitigroup in connection with a Direct Action, the Companydirect
action, Citigroup shall remain obligated to pay the principal of or interest on
the Junior Subordinated Debt Securitiesjunior subordinated debt securities held by Citigroup Capital or the
Institutional Trusteeinstitutional trustee of Citigroup Capital, and
the CompanyCapital. Citigroup shall be subrogated to the
rights of the holder of such Capital
Securities with respectcapital securities relating to payments on the
Capital Securitiescapital securities to the extent of any payments made by the CompanyCitigroup to such
holder in any Direct Action.direct action. The holders of Capital Securitiescapital securities will not be able
to exercise directly any other remedy available to the holders of the Junior Subordinated Debt Securities.junior
subordinated debt securities. (Sections 5.7 and 5.8)
MODIFICATIONS AND AMENDMENTS
Modifications and amendments to the Indentureindenture may be made by the CompanyCitigroup and
the Indenture Trusteeindenture trustee with the consent of the Holdersholders of a majority in principal
amount of the Junior Subordinated Debt Securitiesjunior subordinated debt securities at the time outstanding,
PROVIDED, thatoutstanding.
However, no such modification or amendment may, without the consent of the
Holderholder of each Junior Subordinated Debt Securityjunior subordinated debt security affected thereby:
(i)(1) modify the terms of payment of principal, premium, if any, or interest
on; or
(ii)(2) reduce the percentage of 29
Holdersholders of Junior Subordinated Debt Securitiesjunior subordinated debt securities
necessary to modify or amend the Indentureindenture or waive compliance by
the CompanyCitigroup with any covenant or past default,
PROVIDED, FURTHER, that ifdefault.
If the Junior Subordinated Debt Securitiesjunior subordinated debt securities are held by Citigroup Capital or a
trustee of Citigroup Capital, such supplemental indenture shall not be effective
until the holders of a majority in liquidation preference of Trust Securitiestrust securities of
Citigroup Capital shall have consented to such supplemental indenture; PROVIDED FURTHER, that ifindenture. If the
consent of the Holderholder of each outstanding Junior Subordinated Debt Securityjunior subordinated debt security is
required, such supplemental indenture shall not be effective until each holder
of the Trust
Securitiestrust securities of Citigroup Capital shall have consented to such
supplemental indenture. (Section 9.2)
DISCHARGE AND DEFEASANCE
The CompanyCitigroup may discharge allmost of its obligations (except those set forth
below) to holders of the Junior Subordinated Debt Securitiesjunior
subordinated debt securities issued under the Indenture, which Junior Subordinated Debt Securitiesindenture if such junior
subordinated debt securities have not already been delivered to the Indenture Trusteeindenture
trustee for cancellation and which either have become due and payable or are by their
terms due and payable within one year, (oror are to be called for redemption within
one year)year. Citigroup discharges its obligations by depositing with the Indenture
Trusteeindenture
trustee an amount certified to be sufficient to pay when due the principal of
and premium, if any, and interest on all outstanding Junior Subordinated Debt
Securitiesjunior subordinated debt
securities and to make any mandatory sinking fundscheduled installment payments thereon when
due. (Section 4.1)
Unless otherwise specified herein with respectin this prospectus relating to the Junior Subordinated
Debt Securities, the Company,junior
subordinated debt securities, Citigroup, at its option, (i)option:
(1) will be dischargedreleased from any and all obligations in respect of the Junior Subordinated Debt Securities (except
for certain obligations to pay all expenses of Citigroup Capital, to register
the transferjunior
subordinated debt securities, which is known as "defeasance and
discharge"; or
exchange of Junior Subordinated Debt Securities, to replace
mutilated, defaced, destroyed, lost or stolen Junior Subordinated Debt
Securities, and to maintain Paying Agents and hold monies for payment in trust),
or (ii)(2) need not comply with certain covenants specified herein with respectregarding the
junior subordinated debt securities, which is known as "covenant
defeasance."
If Citigroup exercises its covenant defeasance option, the failure to the Junior Subordinated Debt Securities, and the occurrence of an event
described in clause (c) under "Events of Default" abovecomply
with respect to any defeased covenant and any other Eventevent of Default provideddefault in the applicable resolution
of the Boardboard of Directorsdirectors or supplemental indenture under which the
Junior Subordinated Debt Securities are issued shallwill no longer be an Eventevent
of Default if, indefault under the indenture.
To exercise either case, the Company depositsits defeasance and discharge or covenant defeasance
options, Citigroup must
(1) deposit with the Indenture Trustee,indenture trustee, in trust, money or U.S. Government
Obligations that through the payment of interest
thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay all the principal of (andand
premium, if any)any, and any interest on the Junior Subordinated Debt Securities on the datesjunior subordinated debt
securities when such payments are due (which may include one or more redemption dates designated by
the Company) in accordance with the termsdue; and
30
106
(2) deliver an opinion of the Junior Subordinated Debt
Securities. Such a trust may only be established, if, among other things, the
Company shall have delivered an Opinion of Counsel,counsel, which, in the case of a defeasance and
discharge pursuant to clause (i),(1) of this sentence, must be based upon a
ruling or administrative pronouncement of the Internal Revenue Service,IRS, to the effect that
the Holdersholders of the Junior Subordinated Debt Securitiesjunior subordinated debt securities will not
recognize gain or loss for federal income tax purposes as a result of
such deposit or defeasance and will be subjectrequired to pay federal income
tax in the same manner as if such defeasance had not occurred.
(Sections 4.2, 4.3 and 4.4) In.
When there is a defeasance and discharge, the eventindenture will no longer
govern the Company omitsjunior subordinated debt securities, Citigroup will no longer be
liable for payment and the holders of such junior subordinated debt securities
will be entitled only to comply with its remainingthe deposited funds. When there is a covenant
defeasance, however, Citigroup will continue to be obligated for payments when
due if the deposited funds are not sufficient to pay the holders.
The obligations under the Indenture after a defeasance of
the Indenture with respect to the Junior Subordinated Debt Securities as
described under clause (ii) above and the Junior Subordinated Debt Securities
are declared due and payable because of the occurrence of any undefeased Event
of Default, the amount of money and U.S. Government Obligations on deposit with
the Indenture Trustee may be insufficientindenture to pay amounts due onall expenses of Citigroup
Capital, to register the Junior
Subordinated Debt Securities at the timetransfer or exchange of the acceleration resulting from such
Event of Default. However, the Companyjunior subordinated debt
securities, to replace mutilated, defaced, destroyed, lost or stolen junior
subordinated debt securities, and to maintain paying agents and hold monies for
payment in trust will remain liable in respect of such
payments.
30
continue even if Citigroup exercises its defeasance and
discharge or covenant defeasance options.
CONCERNING THE INDENTURE TRUSTEE
The Indenture Trusteeindenture trustee has extended substantial credit facilities, (thethe
borrowings under which constitute Senior Indebtedness)Indebtedness, to the Company. The
CompanyCitigroup. Citigroup
and certain of its subsidiaries also maintain bank accounts, borrow money and
have other customary commercial banking or investment banking relationships with
the Indenture Trusteeindenture trustee in the ordinary course of business.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Capital Securitiescapital securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of Citigroup
Capital as a result of the occurrence of a Special Event, the Junior
Subordinated Debt Securitiesjunior
subordinated debt securities will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the depositary or its nominee. Each
global certificate is referred to as a "global security." Except under the
limited circumstances described below, Junior
Subordinated Debt Securitiesjunior subordinated debt securities
represented by a Global Securityglobal security will not be exchangeable for, and will not
otherwise be issuable as, Junior Subordinated
Debt Securitiesjunior subordinated debt securities in definitive
form. The Global Securitiesglobal securities described above may not be transferred except by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or to a successor depositary
or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. SuchThese
laws may impair the ability to transfer beneficial interests in such a Global Security.global
security.
Except as provided below, owners of beneficial interests in such a Global
Securityglobal
security will not be entitled to receive physical delivery of Junior
Subordinated Debt Securitiesjunior
subordinated debt securities in definitive form and will not be considered the
Holders (asholders, as defined in the Indenture) thereofindenture, of such global security for any purpose
under the Indenture, and no Global Securityindenture. A global security representing Junior Subordinated Debt
Securities shall bejunior subordinated debt
securities is only exchangeable except for another Global Securityglobal security of like denomination
and tenor to be registered in the name of the depositary or its nominee or to a
successor depositary or its nominee. Accordingly,This means that each Beneficial Ownerbeneficial owner must
rely on the procedures of the depositary, or if such person is not a
Participant,participant, on the procedures of the Participantparticipant through which such person owns
its interest, to exercise any rights of a holder under the Indenture.indenture.
THE DEPOSITARY
If Junior Subordinated Debt Securitiesjunior subordinated debt securities are distributed to holders of
Capital
Securitiescapital securities in liquidation of such holders' interests in Citigroup
Capital, DTC will act as securities depositary for the Junior Subordinated Debt Securities.
For a description of DTC and the specific terms of the depositary arrangements,
see "Description of the Capital Securities--Book-Entry Only Issuance--The
Depository Trust Company."junior subordinated debt
securities. As of the date of this Prospectus,prospectus, the description thereinin this
prospectus of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments
with respect31
107
relating to the Capital
Securitiescapital securities apply in all material respects to any debt
obligations represented by one or more Global Securitiesglobal securities held by DTC. The CompanyCitigroup
may appoint a successor to DTC or any successor depositary in the event DTC or
such successor depositary is unable or unwilling to continue as a depositary for
the Global Securities.global securities. For a description of DTC and the specific terms of the
depositary arrangements, see "Description of the Capital
Securities -- Book-Entry Only Issuance -- The Depository Trust Company."
None of the Company,Citigroup, Citigroup Capital, the Indenture Trustee,indenture trustee, any paying
agent and any other agent of the CompanyCitigroup or the Indenture Trusteeindenture trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Securityglobal security
for such Junior Subordinated Debt Securitiesjunior subordinated debt securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
31
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Securityglobal security shall be exchangeable for Junior Subordinated Debt
Securitiesjunior subordinated debt
securities registered in the names of persons other than the depositary or its
nominee only if (i)if:
- the depositary notifies the CompanyCitigroup that it is unwilling or unable to
continue as a depositary for such Global Securityglobal security and no successor
depositary shall have been appointed, (ii)appointed;
- the depositary, at any time, ceases to be a clearing agency registered
under the Exchange Act at which time the depositary is required to be so
registered to act as such depositary and no successor depositary shall
have been appointed, (iii) the Company,appointed;
- Citigroup, in its sole discretion, determines that such Global Securityglobal security
shall be so exchangeableexchangeable; or
(iv)- there shall have occurred an Indenture Eventindenture event of Default with respectdefault relating to such
Junior Subordinated Debt Securities.junior subordinated debt securities.
Any Global Securityglobal security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Junior
Subordinated Debt Securitiesjunior subordinated debt securities registered in such
names as the depositary shall direct. It is expected that such instructions will
be based upon directions received by the depositary from its Participants with respectparticipants
relating to ownership of beneficial interests in such Global Security.global security.
CERTAIN COVENANTS
If the Junior Subordinated Debt Securitiesjunior subordinated debt securities are issued to Citigroup Capital
or a trustee of such trust in connection with the issuance of Trust Securitiestrust securities
by Citigroup Capital and
(i)(1) there shall have occurred and be continuing an Eventevent of Default, (ii) the Companydefault;
(2) Citigroup shall be in default with respectrelating to its payment of any
obligations under the Guarantee,guarantee; or
(iii) the Company(3) Citigroup shall have given notice of its election to defer payments of
interest on the Junior
Subordinated Debt Securitiesjunior subordinated debt securities by extending the
interest payment period as
provided in the Indenture and such period, or any extension thereof,of such
period, shall be continuing,continuing;
then
(a) the CompanyCitigroup shall not declare or pay any dividend on, make any
distributions with respectrelating to, or redeem, purchase, acquire or make a
liquidation payment with respectrelating to, any of its capital stock or make any
guarantee payment with respect thereto (otherother than
(i)- repurchases, redemptions or other acquisitions of shares of capital
stock of the CompanyCitigroup in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants, (ii)consultants;
- as a result of an exchange or conversion of any class or series of
the Company'sCitigroup's capital stock for any other class or series of the Company'sCitigroup's
capital stock,stock; or
(iii)32
108
- the purchase of fractional interests in shares of the Company'sCitigroup's capital
stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged),exchanged; and
(b) the CompanyCitigroup shall not make any payment of interest, onprincipal or principal of (or premium,
if any, on),on, or repay, repurchase or redeem any debt securities issued
by the CompanyCitigroup which rank PARI
PASSUequally with or junior to the Junior Subordinated Debt Securities.junior
subordinated debt securities.
The foregoing,above restriction, however, will not apply to any stock dividends paid by
the CompanyCitigroup where the dividend stock is the same stock as that on which the
dividend is being paid. (Section 13.3)
For soSo long as the Trust Securitiestrust securities remain outstanding, the CompanyCitigroup will covenant
(i) toto:
- directly or indirectly maintain 100% ownership of the Common
Securitiescommon securities
of the Trust; PROVIDED, HOWEVER, that anyCitigroup Capital, unless a permitted successor of the
Company under the Indenture may succeedCitigroup succeeds
to the Company'sits ownership of such
Common Securities, (ii) tothe common securities;
- not voluntarily dissolve, wind-up or terminate the
Trust,Citigroup Capital, except
in connection with
(a) a distribution of Junior Subordinated Debt
Securities as described under "Distribution of the Junior Subordinated Debt
Securities" and in connection with certainjunior subordinated debt securities or
(b) mergers, consolidations or amalgamations permitted by the
Declaration, (iii) todeclaration;
- timely perform its duties as Sponsorsponsor of the TrustCitigroup Capital; and
(iv) to- use its reasonable efforts to cause the
TrustCitigroup Capital to
(a) to remain a statutory business trust, except in connection with the
distribution of Junior Subordinated Debt Securitiesjunior subordinated debt securities to the holders
of Trust
Securitiestrust securities in liquidation of the Trust,Citigroup Capital, the
redemption of all of the Trust
Securitiestrust securities of the Trust,Citigroup Capital, or certain
mergers, consolidations or amalgamations, each as permitted by the
Declarationdeclaration of the Trust,Citigroup Capital, and
(b) to otherwise continue to be classified as a grantor trust for United
States federal income tax purposes. (Section 10.5)
32
MISCELLANEOUS
The Indentureindenture provides that the CompanyCitigroup will pay all fees and expenses
related to (i)to:
- the offering of the Trust Securitiestrust securities and the Junior Subordinated
Debt Securities, (ii)junior subordinated debt
securities;
- the organization, maintenance and dissolution of Citigroup Capital, (iii)Capital;
- the retention of the Citigroup Trusteestrustees; and
(iv)- the enforcement by the Institutional Trusteeinstitutional trustee of the rights of the holders
of the Capital
Securities.capital securities.
33
109
DESCRIPTION OF GUARANTEE
Set forth below is a summary of information concerning the Guaranteeguarantee that
will be executed and delivered by the CompanyCitigroup for the benefit of the holders of
Capital Securities.capital securities. The Guaranteeguarantee will be qualified as an indenture under the
Trust Indenture Act. The Chase Manhattan Bank will act as indenture trustee
under the Guarantee (the "Guarantee Trustee").guarantee trustee.
The terms of the Guaranteeguarantee will be those set forth in the Guaranteeguarantee and those
made part of the Guaranteeguarantee by the Trust Indenture Act. The summary doesis not
purportintended to be complete and is subjectqualified in all respects toby the provisions of
and is qualified in its entirety by
reference to, the form of Guarantee,guarantee, which is filed as an exhibit to the Registration Statementregistration
statement of which this Prospectusprospectus forms a part, and the Trust Indenture Act.
The Guaranteeguarantee will be held by the Guarantee Trusteeguarantee trustee for the benefit of the
holders of the Capital Securities.capital securities.
GENERAL
Pursuant to and to the extent set forth in the Guarantee, the Companyguarantee, Citigroup will
irrevocably and unconditionally agree to pay in full to the holders of the
Capital Securities (exceptcapital securities, except to the extent paid by Citigroup Capital),Capital, as and when
due, regardless of any defense, right of set-off or counterclaim which Citigroup
Capital may have or assert, the following payments, (the "Guarantee Payments"),which are referred to as
"guarantee payments," without duplication:
(i)- any accrued and unpaid distributions that are required to be paid on the
Capital Securities,capital securities, to the extent Citigroup Capital has funds available
therefor, and (ii)for such distributions;
- the redemption price of $ per Capital Security,capital security, plus all accrued and
unpaid distributions, (the "Redemption Price"), to the extent Citigroup Capital has funds available
therefor, with respectfor such redemptions, relating to any Capital Securitiescapital securities called for
redemption by Citigroup Capital,Capital; and
(iii)- upon a voluntary or involuntary dissolution, winding-up or termination of
Citigroup Capital, (otherother than in connection with the distribution of
Junior Subordinated
Debt Securitiesjunior subordinated debt securities to the holders of Capital Securitiescapital securities
or the redemption of all of the Capital Securities)capital securities, the lesser of
(a)- the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Capital Securitiescapital securities to the date of payment, or
(b)- the amount of assets of Citigroup Capital remaining for distribution
to holders of the Capital Securitiescapital securities in liquidation of Citigroup
Capital.
The Company'sCitigroup's obligation to make a Guarantee Paymentguarantee payment may be satisfied by direct
payment of the required amounts by the CompanyCitigroup to the holders of Capital Securitiescapital
securities or by causing Citigroup Capital to pay such amounts to such holders.
The Guaranteeguarantee will be a guarantee on a subordinated basis with respectin relation to the Capital Securitiescapital
securities from the time of issuance of the Capital Securitiescapital securities but will not
apply to any payment of distributions or Redemption Price,redemption price, or to payments upon
the dissolution, winding-up or termination of Citigroup Capital, except to the
extent Citigroup Capital shall havehas funds available therefor.for such payments. If the CompanyCitigroup
does not make interest payments on the Junior Subordinated Debt
Securities,junior subordinated debt securities,
Citigroup Capital will not pay distributions on the Capital
Securitiescapital securities and will
not have funds available therefor. See "Description of
Junior Subordinated Debt Securities."for such payments. The Guarantee,guarantee, when taken together
with the Company'sCitigroup's obligations under the Junior Subordinated Debt Securities,junior subordinated debt securities, the
Indentureindenture and the Declaration,declaration, including its obligations to pay costs, expenses,
debts and liabilities of Citigroup Capital, (otherother than with respectthose relating to Trust
Securities),trust
securities, will provide a full and unconditional guarantee on a subordinated
basis by the CompanyCitigroup of payments due on the Capitalcapital securities. See "Description
of the Junior Subordinated Debt Securities.
33"
34
CERTAIN110
IMPORTANT COVENANTS OF THE COMPANYCITIGROUP
In the Guarantee, the Companyguarantee, Citigroup will covenant that, so long as any Capital
Securitiescapital
securities remain outstanding, if there shall have occurred any event that would
constitute an Eventevent of Defaultdefault under such Guaranteeguarantee or the Declaration, then (a)
the Companydeclaration, then:
- Citigroup shall not declare or pay any dividend on, make any
distributions with respectrelating to, or redeem, purchase, acquire or make a
liquidation payment with
respectrelating to, any of its capital stock or make any
guarantee payment with respect thereto (otherother than
(i)(1) repurchases, redemptions or other acquisitions of shares of capital
stock of the CompanyCitigroup in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants, (ii)consultants;
(2) as a result of an exchange or conversion of any class or series of
the Company'sCitigroup's capital stock for any other class or series of
the Company'sCitigroup's capital stock,stock; or
(iii)(3) the purchase of fractional interests in shares of the Company'sCitigroup's
capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged)exchanged; and
(b) the Company- Citigroup shall not make any payment of interest, on,principal or principal of (or premium,
if any, on),on, or repay, repurchase or redeem, any debt securities issued by
the CompanyCitigroup which rank PARI PASSUequally with or junior to the Junior Subordinated Debt Securities.junior subordinated
debt securities.
The Guarantee,guarantee, however, will except from the foregoing any stock dividends paid
by the CompanyCitigroup where the dividend stock is the same stock as that on which the
dividend is being paid.
MODIFICATION OF GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Capital Securities (in which case no vote will be required), the
GuaranteeThe guarantee may be amended only with the prior approval of the holders of
not less than a majority in aggregate liquidation amount of the outstanding
Capital
Securities.capital securities. No vote will be required, however, for any changes that do
not adversely affect the rights of holders of capital securities. All guarantees
and agreements contained in the Guaranteeguarantee shall bind the successors, assignees,
receivers, trustees and representatives of the
CompanyCitigroup and shall inure to the
benefit of the holders of the Capital Securitiescapital securities then outstanding.
EVENTS OF DEFAULT
An Eventevent of Defaultdefault under the Guaranteeguarantee will occur upon the failure of
the
CompanyCitigroup to perform any of its payment or other obligations thereunder.required by the
guarantee. The holders of a majority in aggregate liquidation amount of the
Capital Securitiescapital securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trusteeguarantee trustee in
respect of the Guaranteeguarantee or to direct the exercise of any trust or power
conferred upon the Guarantee
Trusteeguarantee trustee under the Guarantee.guarantee.
If the Guarantee Trusteeguarantee trustee fails to enforce the Guarantee Trustee'sguarantee trustee's rights
under the Guarantee,guarantee, any holder of related Capital
Securitiescapital securities may directly institute a legal proceeding against the Companysue
Citigroup to enforce the Guarantee Trustee'sguarantee trustee's rights under the Guaranteeguarantee without
first instituting a legal proceeding againstsuing Citigroup Capital, the Guarantee Trusteeguarantee trustee or any other person or
entity. A holder of Capital Securitiescapital securities may also directly institute a legal proceeding against the Companysue Citigroup to
enforce such holder's right to receive payment under the Guaranteeguarantee without first
(i)(1) directing the Guarantee
Trusteeguarantee trustee to enforce the terms of the Guaranteeguarantee or (ii) instituting a legal
proceeding against(2)
suing Citigroup Capital or any other person or entity.
The CompanyCitigroup will be required to provide annually to the Guarantee Trustee a
statementguarantee trustee such
documents, reports and information as to the performancerequired by the Company of certain of its obligations
under the Guarantee and as to any default in such performance.Trust Indenture Act.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, priorPrior to the occurrence of a default with respectrelating to the Guarantee,guarantee, the
guarantee trustee undertakes to perform only such duties as are specifically set
forth in the Guarantee and, afterguarantee. After such default, with respect to the Guarantee, shallguarantee
35
111
trustee will exercise the same degree of care as a prudent individual would
exercise 34
in the conduct of his or her own affairs. Subject to such provision,Provided that the Guarantee Trusteeforegoing
requirements have been met, the guarantee trustee is under no obligation to
exercise any of the powers vested in it by the Guaranteeguarantee at the request of any
holder of Capital Securitiescapital securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guaranteeguarantee will terminate as to the Capital Securitiescapital securities upon full payment
of the Redemption Priceredemption price of all Capital Securities,capital securities, upon distribution of the
Junior Subordinated Debt Securitiesjunior subordinated debt securities to the holders of the Capital Securitiescapital securities or
upon full payment of the amounts payable in accordance with the Declarationdeclaration upon
liquidation of Citigroup Capital. The Guaranteeguarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Capital
Securitiescapital
securities must restore payment of any sums paid under the Capital Securitiescapital securities or
the Guarantee.guarantee.
STATUS OF THE GUARANTEE
The Guaranteeguarantee will constitute an unsecured obligation of the CompanyCitigroup and will
rank (i)rank:
- subordinate and junior in right of payment to all other liabilities of
the Company, (ii) PARI PASSUCitigroup;
- equally with the most senior preferred or preference stock now or
hereafter issued by the CompanyCitigroup and with any guarantee now or hereafter
entered into by the CompanyCitigroup in respect of any preferred or preference stock
of any subsidiary of the CompanyCitigroup; and
(iii)- senior to the
Company'sCitigroup's common stock.
The terms of the Capital Securitiescapital securities provide that each holder of Capital Securitiescapital
securities by acceptance thereofof such securities agrees to the subordination
provisions and other terms of the Guarantee.guarantee.
The Guaranteeguarantee will constitute a guarantee of payment and not of collection
(that is,collection.
This means that the guaranteed party may institute a legal proceeding directly againstsue the guarantor to enforce
its rights under the Guaranteeguarantee without instituting a
legal proceeding againstsuing any other person or entity).entity.
GOVERNING LAW
The Guaranteeguarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
35York State.
36
112
EFFECT OF OBLIGATIONS UNDER THE
JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
As set forth in the Declaration,declaration, the sole purpose of Citigroup Capital is
to issue the Trust Securities evidencing undivided beneficial interests in the
assets of Citigroup Capital,trust securities and to invest the proceeds from such issuance and
sale in the Junior Subordinated Debt Securities.junior subordinated debt securities.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debt Securities,junior subordinated debt securities, such payments will be sufficient to cover
the distributions and payments due on the Trust Securities because oftrust securities. This is due to the
following factors:
(i)- the aggregate principal amount of Junior Subordinated Debt
Securitiesjunior subordinated debt securities
will be equal to the sum of the aggregate stated liquidation amount of
the Trust Securities; (ii)trust securities;
- the interest rate and the interest and other payment dates on the Junior Subordinated Debt Securitiesjunior
subordinated debt securities will match the distribution rate and
distribution and other payment dates for the Capital
Securities; (iii) pursuant tocapital securities;
- under the Indenture, the Company shallindenture, Citigroup will pay, and Citigroup Capital shallwill not
be obligated to pay, directly or indirectly, all costs, expenses, debtdebts
and obligations of Citigroup Capital other than with
respectthose relating to the
Trust Securities;trust securities; and
(iv)- the Declarationdeclaration further provides that the Citigroup Trustees shalltrustees may not
cause or permit Citigroup Capital to among
other things, engage in any activity that is not
consistent with the purposes of Citigroup Capital.
Payments of distributions, (toto the extent funds thereforthere are available)available funds, and
other payments due on the Capital Securities (tocapital securities, to the extent funds thereforthere are available)available
funds, are guaranteed by the Company as andCitigroup to the extent set forth under
"Description of Guarantee"described in this Prospectus.prospectus.
If the CompanyCitigroup does not make interest payments on the Junior Subordinated Debt Securities purchased by
Citigroup Capital, it is expected thatjunior subordinated debt
securities, Citigroup Capital will not have sufficient funds to pay
distributions on the Capital Securities.capital securities. The Guaranteeguarantee is a subordinated
guarantee on a subordinated basis with respectin relation to the Capital Securities
from the time of its issuance butcapital securities. The guarantee does not apply to
any payment of distributions unless and until Citigroup Capital has sufficient
funds for the payment of such distributions. See "Description of Guarantee."
The Guaranteeguarantee covers the payment of distributions and other payments on the
Capital Securitiescapital securities only if and to the extent that the CompanyCitigroup has made a payment
of interest or principal or other payments on the Junior Subordinated Debt
Securities held by Citigroup Capital as its sole asset.junior subordinated debt
securities. The Guarantee,guarantee, when taken together with the Company'sCitigroup's obligations
under the Junior Subordinated Debt
Securitiesjunior subordinated debt securities and the Indentureindenture and its
obligations under the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of
Citigroup Capital (other than with respect to the Trust Securities),declaration, will provide a full and unconditional
guarantee of distributions, redemption payments and liquidation payments on the
Capital Securities.capital securities.
If the CompanyCitigroup fails to make interest or other payments on the Junior
Subordinated Debt Securitiesjunior
subordinated debt securities when due, (takingtaking account of any Extension Period),extension period,
the Declaration provides a mechanism wherebydeclaration allows the holders of the Capital
Securities, using the procedures described in "Description of the Capital
Securities--Book Entry Only Issuance--The Depository Trust Company" and
"--Voting Rights," maycapital securities to direct the
Institutional Trusteeinstitutional trustee to enforce its rights under the Junior Subordinated Debt Securities.junior subordinated debt
securities. If the Institutional Trusteeinstitutional trustee fails to enforce itsthese rights, under the Junior Subordinated Debt Securities, any
holder of Capital Securitiescapital securities may directly institute a legal proceeding against
the Companysue Citigroup to enforce the Institutional Trustee'ssuch rights under the Junior
Subordinated Debt Securities
without first instituting any legal proceeding
againstsuing the Institutional Trusteeinstitutional trustee or any other person or entity. IfSee
"Description of the Capital Securities -- Book Entry Only Issuance -- The
Depository Trust Company" and "-- Voting Rights."
A holder of capital securities may institute a Declaration Eventdirect action if a
declaration event of Defaultdefault has occurred and is continuing and such event is
attributable to the failure of the CompanyCitigroup to pay interest or principal on the
Junior Subordinated Debt Securitiesjunior subordinated debt securities on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Capital Securitiespayable. A direct action may also institute a Direct Action for payment on
or after the respective due date specified in the Junior Subordinated Debt
Securitiesbe brought without first (i)(1) directing
the Institutional Trusteeinstitutional trustee to enforce the terms of the Junior Subordinated Debt Securitiesjunior subordinated debt
securities or (ii) instituting a legal
proceeding against the Company(2) suing Citigroup to enforce the Institutional Trustee'sinstitutional trustee's rights
under the Junior
36
Subordinated Debt Securities.junior subordinated debt securities. In connection with such Direct Action, the Companydirect
action, Citigroup will be subrogated to the rights of such holder of Capital Securitiescapital
securities under the Declarationdeclaration to the extent of any payment made by the CompanyCitigroup
to such holder of Capital Securities in such Direct Action.capital securities. Consequently, the CompanyCitigroup will be entitled
to payment of amounts that a holder of Capital Securitiescapital securities receives in respect of
an unpaid distribution that resulted in the bringing of a Direct
Action to the extent that such holder receives or has already
received full payment with respectrelating to such unpaid distribution from Citigroup
Capital.
The
Company, under the Guarantee,37
113
Citigroup acknowledges that the Guarantee Trusteeguarantee trustee shall enforce the
Guaranteeguarantee on behalf of the holders of the Capital Securities.capital securities. If the
CompanyCitigroup fails
to make payments under the Guarantee,guarantee, the Guarantee provides a
mechanism wherebyguarantee allows the holders of the
Capital Securities maycapital securities to direct the Guarantee
Trusteeguarantee trustee to enforce its rights
thereunder. If the Guarantee Trusteeguarantee trustee fails to enforce the Guarantee,guarantee, any holder
of Capital Securitiescapital securities may directly institute a
legal proceeding against the Companysue Citigroup to enforce the Guarantee Trustee'sguarantee
trustee's rights under the Guarantee withoutguarantee. Such holder need not first instituting a legal proceeding againstsue Citigroup
Capital, the Guarantee Trustee,guarantee trustee, or any other person or entity. A holder of
Capital Securitiescapital securities may also directly institute a legal proceeding
against the Companysue Citigroup to enforce such holder's
right to receive payment under the Guarantee withoutguarantee. Such holder need not first (i) directing(1)
direct the Guarantee Trusteeguarantee trustee to enforce the terms of the Guaranteeguarantee or (ii) instituting a legal proceeding against(2) sue
Citigroup Capital or any other person or entity.
The CompanyCitigroup and Citigroup Capital believe that the above mechanisms and
obligations, taken together, are equivalent to a full and unconditional
guarantee by the CompanyCitigroup of payments due on the Capital Securities.capital securities. See
"Description of Guarantee--General.Guarantee -- General."
38
114
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of Capital Securities.
Unless otherwise stated, thiscapital securities.
The summary is based on laws, regulations, rulings, and decisions now in effect,
all of which may change, possibly with retroactive effect. This summary deals
only with Capital Securities heldholders that purchase the capital securities upon original issuance
and who will hold the capital securities as capital assets by holders who purchase the Capital Securities upon original
issuance. Itassets. This summary does
not deal withaddress tax considerations applicable to investors to whom special classes of holders such as banks,
thrifts, real estate investment trusts,tax rules
may apply, including:
- banks;
- tax-exempt entities;
- insurance companies;
- regulated investment companies,companies;
- common trust funds, insurance companies,funds;
- dealers in securities or currencies,
tax-exempt investors,currencies;
- persons that will hold the capital securities as part of an integrated
investment, including a straddle or conversion transaction, comprised of
a capital security and one or more other positions; or United States
holders (as defined below) that have a functional currency other than the
U.S. dollar.
For purposes of this discussion, a "United States holder" is any person who
is a citizen or resident of the United States; a corporation, partnership or
other entity created or organized in or under the laws of the United States Dollar or
persons that will hold the Capital Securities as a
position in a "straddle," as part of a "synthetic security" or "hedge," as part
of a "conversion transaction" or other integrated investment, or as other than a
capital asset. Further, it does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may bepolitical subdivision thereof; an estate, if United States federal income
taxation is applicable to the Capital Securities. This
summary is based on the Internal Revenue Codeincome of 1986, as amended (the "Code"),
Treasury regulations thereunder and administrative and judicial interpretations
thereof, assuch estate regardless of the date hereof,income's
source; or a trust if a United States court is able to exercise primary
supervision over the trust's administration and one or more United States
persons have the authority to control all of which are subjectthe trust's substantial decisions.
The term "non-United States holder" means a holder who is not a United States
holder. The term "United States" means the United States of America, including
the fifty states and the District of Columbia.
Investors should consult their tax advisors in determining the tax
consequences to change, possibly
with retroactive effect.them of purchasing, holding and disposing of the capital
securities, including the application to their particular situation of the
United States federal income tax considerations discussed below, as well as the
application of state, local, foreign or other tax laws.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
In connection with the issuance of the Junior Subordinated Debt Securities,junior subordinated debt securities,
Skadden, Arps, Slate, Meagher & Flom LLP, ("Skadden, Arps"), tax counsel to the
CompanyCitigroup and Citigroup
Capital, will render its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Indenture (and certainindenture and
other documents),relevant documents, and based on certainthe facts and assumptions contained in
such opinion, the Junior Subordinated Debt Securitiesjunior subordinated debt securities held by Citigroup Capital
will be classified for United States federal income tax purposes as indebtedness
of the Company.
37
Citigroup.
CLASSIFICATION OF CITIGROUP CAPITAL
In connection with the issuance of the Capital Securities,capital securities, Skadden, Arps,
Slate, Meagher & Flom LLP will render its opinion generally to the effect that,
under then current law and assuming full compliance with the terms of the
Declarationdeclaration, the indenture and the Indenture
(and certain other documents),relevant documents, and based on certainthe facts
and assumptions contained in such opinion, Citigroup Capital will be classified
for United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. Accordingly, for United States federal
income tax purposes, each holder of Capital Securitiescapital securities generally will be
considered the owner of an undivided interest in the Junior Subordinated Debt Securities, and
eachjunior subordinated debt
securities. Each holder will be required
39
115
to include in its gross income all interest (oror original issue discount ("OID"))
and any gain recognized with respectrelating to its allocable share of those Junior Subordinated Debt Securities.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNTjunior
subordinated debt securities.
UNITED STATES HOLDERS
Interest Income and Original Issue Discount
Under applicable Treasury regulations, applicable to debt instruments issued on or after
August 13, 1996 (the "Regulations"), a "remote" contingency that stated
interest will not be timely paid will be ignored in determining whether a debt
instrument is issued with OID. The CompanyCitigroup believes that the likelihood of its
exercising its option to defer payments is remote within the meaning of the
Regulations.regulations. Based on the foregoing, the CompanyCitigroup believes that, although the
matter is not free from doubt, the Junior Subordinated Debt Securitiesjunior subordinated debt securities will not
be considered to be issued with OID at the time of their original issuance and, accordingly,
that aissuance.
Accordingly, each holder of the Capital Securitiescapital securities should include in gross income
such holder's allocable share of interest on the Junior Subordinated Debt Securitiesjunior subordinated debt
securities in accordance with such holder's method of tax accounting.
Under the Regulations,regulations, if the option to defer any payment of interest was
determined not to be "remote," or if the CompanyCitigroup exercised such option, the Junior Subordinated Debt Securitiesjunior
subordinated debt securities would be treated as issued with OID at the time of
issuance or at the time of such exercise, as the case may be, andbe. Then, all stated
interest on the Junior Subordinated Debt Securitiesjunior subordinated debt securities would thereafter be treated
as OID as long as the Junior Subordinated Debt Securitiesjunior subordinated debt securities remained outstanding.
In such event, all of a holder's taxable interest income with
respectrelating to the Junior Subordinated Debt Securitiesjunior
subordinated debt securities would constitute OID that would have to be included
in income on an economic accrual basis before the receipt of the cash
attributable to the interest, regardless of such United States holder's method
of tax accounting, and actual distributions of stated interest would not be
reported as taxable income. Consequently, a holder of Capital Securitiescapital securities would
be required to include in gross income OID even though the CompanyCitigroup would not make
any actual cash payments during an Extension Period.extension period.
No rulings or other interpretations have been issued by the IRS which have
addressed the meaning of the term "remote" as used in the Regulations,regulations, and it is
possible that the IRS could take a position contrary to the interpretation herein.in
this prospectus.
Because income on the Capital Securitiescapital securities will constitute interest or OID,
corporate holders of Capital Securitiescapital securities will not be entitled to a
dividends-received deduction with respectrelating to any income recognized with respectrelating to the
Capital Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF
CITIGROUP CAPITAL
Under certain circumstances, as described under "Descriptioncapital securities.
Receipt of the Capital
Securities--Special Event Redemption or Distribution," Junior Subordinated Debt Securities or Cash Upon Liquidation of
Citigroup Capital
Under the circumstances described in this prospectus, junior subordinated
debt securities may be distributed to holders in exchange for the Capital Securitiescapital securities
upon the liquidation of Citigroup Capital. Under current law, such a
distribution, for United States federal income tax purposes, would be treated as
a non-taxable event to each United States holder, and each United States holder
would receive an aggregate tax basis in the Junior Subordinated Debt Securitiesjunior subordinated debt securities
equal to such holder's aggregate tax basis in its Capital Securities.capital securities. A United
States holder's holding period in the Junior Subordinated Debt Securitiesjunior subordinated debt securities
received in liquidation of Citigroup Capital would include the period during
which the Capital Securitiescapital securities were held by such holder. 38
Under certain circumstances described herein (seeSee "Description of the
Capital Securities"),Securities -- Special Event Redemption or Distribution."
Under the Junior Subordinated Debt Securitiescircumstances described in this prospectus, the junior
subordinated debt securities may be redeemed by the CompanyCitigroup for cash and the
proceeds of such redemption distributed by Citigroup Capital to holders in
redemption of their Capital Securities.capital securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition of the redeemed Capital Securities,
andcapital securities. Accordingly, a United States
holder could recognize gain or loss as if it had sold such redeemed Capital
Securitiescapital
securities for cash. See "Description of the Capital Securities" and "United
States Federal Income Taxation--SalesTaxation -- Sales of Capital Securities."
SALES OF CAPITAL SECURITIES40
116
Sales of Capital Securities
A United States holder that sells Capital Securitiescapital securities will be considered to
have disposed of all or part of its PRO RATAratable share of the Junior Subordinated Debt Securities
andjunior subordinated
debt securities. Such United States holder will recognize gain or loss equal to
the difference between its adjusted tax basis in the Capital Securitiescapital securities and the
amount realized on the sale of such Capital Securities.capital securities. Assuming that the CompanyCitigroup
does not exercise its option to defer payment of interest on the Junior Subordinated Debt Securitiesjunior
subordinated debt securities and that the Junior Subordinated Debt Securitiesjunior subordinated debt securities
are not deemed to be issued with OID, a United States holder's adjusted tax
basis in the Capital Securitiescapital securities generally will be its initial purchase price. If
the Junior Subordinated Debt Securitiesjunior subordinated debt securities are deemed to be issued with OID, a
United States holder's tax basis in the Capital Securitiescapital securities generally will be its
initial purchase price, increased by OID previously includible in such United
States holder's gross income to the date of disposition and decreased by
distributions or other payments received on the Capital Securitiescapital securities since and
including the date that the Junior Subordinated Debt Securitiesjunior subordinated debt securities were deemed to
be issued with OID. Such gain or loss generally will be a capital gain or loss,
(exceptexcept to the extent of any accrued interest with respectrelating to such United States
holder's PRO
RATAratable share of the Junior Subordinated Debt Securitiesjunior subordinated debt securities required to be
included in income)income, and generally will be a long-term capital gain or loss if
the Capital
Securitiescapital securities have been held for more than one year.
Should the CompanyCitigroup exercise its option to defer any payment of interest on the
Junior Subordinated Debt Securities,junior subordinated debt securities, the Capital Securitiescapital securities may trade at a price
that does not accurately reflect the value of accrued but unpaid interest
with respectrelating to the underlying Junior Subordinated Debt Securities.junior subordinated debt securities. In the event of
such a deferral, a United States holder who disposes of its Capital Securitiescapital securities
between record dates for payments of distributions thereon will be required to include
in income as ordinary income accrued but unpaid interest on the Junior
Subordinated Debt Securitiesjunior
subordinated debt securities to the date of disposition and to add such amount
to its adjusted tax basis in its PRO RATAratable share of the underlying Junior
Subordinated Debt Securitiesjunior
subordinated debt securities deemed disposed of. To the extent the selling price
is less than the holder's adjusted tax basis, such holder will recognize a
capital loss. Subject to certain limited exceptions, capitalCapital losses generally cannot be applied to offset ordinary
income for United States federal income tax purposes.
Information Reporting and Backup Withholding
Generally, income on the capital securities will be reported to the IRS and
to holders of capital securities following the calendar year of payment. In
addition, United States holders may be subject to a 31 percent backup
withholding tax on such payments if they do not provide their taxpayer
identification numbers to the trustee in the manner required, fail to certify
that they are not subject to backup withholding tax, or otherwise fail to comply
with applicable backup withholding tax rules. United States holders may also be
subject to information reporting and backup withholding tax with respect to the
proceeds from a sale, exchange, retirement or other taxable disposition of the
capital securities.
NON-UNITED STATES HOLDERS
For purposes of this discussion, a "Non-United States Holder" is any person
other than (i) a citizen or a resident of the United States; (ii) a corporation,
partnership, or other entity created or organized in or under the laws of the
United States or any political subdivision thereof; (iii) an estate the income
of which is subject to United States federal income tax regardless of its
source; or (iv) a trust if (A) a U.S. court is able to exercise primary
supervision over the trust's administration and (B) one or more United States
persons have the authority to control all of the trust's substantial decisions.
The term "United States" means the United States of America (including the
States and the District of Columbia).
Under presentcurrent United States federal income tax law:
(i) payments by
Citigroup Capital or any- withholding of its paying agents to any holder of a Capital
Security who or which is a Non-United States Holder will not be subject to United States federal withholding tax; PROVIDED, that, (a)income tax will not apply to a
payment on a capital security to a non-United States holder, provided
that;
(1) the beneficial owner
of the Capital Securityholder does not actually or constructively own 10%10 percent or
more of the total combined voting power of all classes of stock of
the CompanyCitigroup entitled to vote (b) the beneficial owner of the Capital
39
Securityand is not a controlled foreign
corporation that is related to the CompanyCitigroup through stock ownership and
(c) either (A)(2) the beneficial owner of the Capital
Security certifies to Citigroup Capital or its agent,provides a statement signed under penalties of
perjury that it is not a United States holder and providesincludes its name and address and certifies that it is
a non-United States holder in compliance with applicable
requirements, or, (B)with respect to payments made after December 31,
2000, satisfies documentary evidence requirements for establishing
that it is a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
(a "Financial Institution"),non-United States holder, and
holds the Capital Security in such capacity,
certifies to Citigroup Capital or its agent, under penalties of perjury, that
such statement has been received from the beneficial owner by it or by41
117
- a Financial Institution holding such security for the beneficial owner and
furnishes Citigroup Capital or its agent with a copy thereof; and (ii) a
Non-Unitednon-United States Holder of a Capital Securityholder will not be subject to United States federal
withholdingincome tax on any gain realized uponon the sale, exchange, retirement or other
taxable disposition of a Capital Security.
INFORMATION REPORTING TO HOLDERS
Generally,capital security, unless, in the case of an
individual, such holder is present in the United States for 183 days or
more in the taxable year of the retirement or disposition and certain
other conditions are met.
Despite the above, a non-United States holder that is subject to United States
federal income taxation on a net income basis generally will be taxable under
the same rules that govern the taxation of a United States holder receiving or
accruing interest on a capital security or recognizing gain or loss on the Capital Securitiessale,
exchange, retirement or other taxable disposition of a capital security. Special
rules might also apply to a non-United States holder that is a qualified
resident of a country with which the United States has an income tax treaty.
United States information reporting requirements and backup withholding tax
will be reportednot apply to holderspayments on Forms 1099, which forms should be maileda capital security if the beneficial owner (1)
certifies its non-United States status under penalties of perjury and, for
payments made after December 31, 2000, also satisfies documentary evidence
requirements for establishing that it is a non-United States person, or (2)
otherwise establishes an exemption.
Information reporting requirements will not apply to holdersany payment of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, andthe
proceeds fromof the sale of a capital security effected outside the Capital Securities may
be subject toUnited States by
a "backup" withholding taxforeign office of 31% unlessa foreign broker, provided that such broker
- derives less than 50% of its gross income for particular periods from the
holder complies with
certain identification requirements. Any withheld amounts will be allowed asconduct of a credit againsttrade or business in the holder'sUnited States;
- is not a controlled foreign corporation for United States federal income
tax providedpurposes; and
- for payments made after December 31, 2000, is not a foreign partnership
that, at any time during its taxable year is 50% or more, by income or
capital interest, owned by United States holders or is engaged in the
required information is providedconduct of a United States trade or business.
Backup withholding tax will not apply to the IRS onpayment of the proceeds of the
sale of a timely basis.
Thecapital security effected outside the United States Treasury Department recently issued final regulations
governingby a foreign
office of any broker. However, information reporting requirements will be
applicable to such payment unless (1) such broker has documentary evidence in
its records that the beneficial owner is a non-United States person and other
conditions are met or (2) the certification procedures regarding
withholdingbeneficial owner otherwise establishes an
exemption.
Information reporting requirements and backup withholding on certain amounts paidtax will apply to
Non-Unitedthe payment of the proceeds of a sale of a capital security by the United States
Holdersoffice of a broker, unless the beneficial owner certifies its non-United States
person status under penalties of perjury or otherwise establishes an exemption.
For payments made after December 31, 1999. The new Treasury regulations would alter2000, for purposes of applying the
proceduresabove rules for claimingnon-United States holders to an entity that is treated as
fiscally transparent, e.g., a partnership or trust, the benefits of an income tax treaty and may change the
certification procedures relating to the receipt by intermediaries of payments
on behalf of a beneficial owner means
each of a Junior Subordinated Debt Security. Holdersthe ultimate beneficial owners of Capital Securities should consult their tax advisors concerning the effect,
if any, of such new Treasury regulations on an investment in the Capital
Securities.entity.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECTRELATING TO THE
TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
4042
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ERISA CONSIDERATIONS
A fiduciary of a pension, profit-sharing or other employee benefit plan
subject togoverned by the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), (an "ERISA Plan") should consider
the fiduciary standards of ERISA in the context of the ERISA Plan'splan's particular
circumstances before authorizing an investment in the Capital Securitiescapital securities of
the Trust.Citigroup Capital. Among other factors, the fiduciary should consider whether
such an investment is in accordance with the documents governing the ERISA Planplan
and whether the investment is appropriate for the ERISA Planplan in view of its
overall investment policy and diversification of its portfolio.
Certain provisions of ERISA and the Code prohibit ERISA Plans,plans, as well as
individual retirement accounts and Keogh plans subject togoverned by section 4975 of the
Code, (collectively, "Plans"), from engaging in certain transactions involving "plan assets" with parties
that are "parties in interest" under ERISA or "disqualified persons" under the
Code with respect to the Plan.plan. The U.S. Department of Labor has issued a final
regulation (the "Regulation") with regard to whether the underlying assets of an entity in which
employee benefit plans acquire equity interests are deemed to be plan assets.
Under such Regulation,regulation, for purposes of ERISA and section 4975 of the Code,
the assets of the TrustCitigroup Capital would be deemed to be "plan assets" of a Planplan
whose assets were used to purchase Capital Securitiescapital securities of the TrustCitigroup Capital if
the Capital
Securitiescapital securities of the TrustCitigroup Capital were considered to be equity
interests in the TrustCitigroup Capital and no exception to plan asset status were
applicable under the Regulation.such regulation.
If the assets of the TrustCitigroup Capital were deemed to be plan assets of Plansplans
that are holders of the capital securities of Citigroup Capital, Securities of the Trust, a Plan'splan's
investment in the Capital Securitiescapital securities of the TrustCitigroup Capital might be deemed to
constitute a delegation under ERISA of the duty to manage plan assets by a
fiduciary investing in Capital
Securitiescapital securities of the Trust.Citigroup Capital. Also, the CompanyCitigroup
might be considered a "party in interest" or "disqualified person" with respectrelating to
Plansplans whose assets were used to purchase Capital Securitiescapital securities of the Trust.Citigroup
Capital. If this were the case, an investment in Capital Securitiescapital securities of the TrustCitigroup
Capital by a Planplan might constitute, or in the course of the operation of
the TrustCitigroup Capital give rise to, a prohibited transaction under ERISA or the
Code. In particular, it is likely that under such circumstances a prohibited
extension of credit to the CompanyCitigroup would be considered to occur under ERISA and
the Code.
In addition, the CompanyCitigroup might be considered a "party in interest" or
"disqualified person" with respect tofor certain Plansplans for reasons unrelated to the operation
of the Trust, E.G.Citigroup Capital, e.g., because of the provision of services by the
CompanyCitigroup or
an affiliateits affiliates to the Plan.plan. A purchase of Capital Securitiescapital securities of the
TrustCitigroup
Capital by any such Planplan would be likely to result in a prohibited extension of
credit to the Company,Citigroup, without regard to whether the assets of the TrustCitigroup Capital
constituted plan assets.
Because of the possibility that a prohibited extension of credit could be
deemed to occur as a result of the purchase or holding of the Capital Securitiescapital securities
of the TrustCitigroup Capital by a Plan,plan, the Capital Securitiescapital securities of the TrustCitigroup Capital may
be not purchased or held by any Planplan or any person investing "plan assets" of
any Plan,plan, unless such purchaser or holder is eligible for the exemptive relief
available underunder:
- Prohibited Transaction Class Exemption ("PTCE") 96-23 (for certainfor transactions determined
by in-house asset managers),managers,
- PTCE 95-60 (for certainfor transactions involving insurance company general accounts),accounts,
- PTCE 91-38 (for certain transactionfor transactions involving bank collective investment funds),funds,
- PTCE 90-1 (for certainfor transactions involving insurance company separate accounts),accounts,
or
- PTCE 84-14 (for certainfor transactions determined by independent qualified asset
managers).managers.
Any purchaser of the Capital Securitiescapital securities of the TrustCitigroup Capital or any
interest therein will be deemed to have represented to the TrustCitigroup Capital that
either
(a) it is not a Planplan and is not purchasing such securities (oror interest
therein)therein on behalf of, or with "plan assets" of, any Planplan or
43
119
(b) its purchase and holding of the capital securities of Citigroup Capital
Securities of
the Trust (oror any interest therein)therein is eligible for the exemptive relief available
under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
41
Due to the complexity of these rules and the penalties imposed upon persons
involved in prohibited transactions, it is important that any person considering
the purchase of capital securities of Citigroup Capital Securities of the Trust with Planplan assets consult
with its counsel regarding the consequences under ERISA and the Code of the
acquisition and ownership of Capital Securitiescapital securities of the TrustCitigroup Capital and the
availability of exemptive relief under the class exemptions listed above. In
JOHN HANCOCK MUTUAL LIFE INSURANCE CO. V. HARRIS TRUST AND SAVINGS BANK, 114
S.Ct. 517510
U.S. 86 (1993), the Supreme Court ruled that assets held in an insurance
company's general account may be deemed to be "plan assets" for ERISA purposes
under certain circumstances. The issues raised in HARRIS TRUST have also been
the subject of legislative action, and have been addressed in proposed
regulations issued by the U.S. Department of Labor in December 1997.
42has issued a
final regulation with regard to those issues. 29 CFR 2550.401c-1, published 65
Fed. Reg. 614 (Jan. 5, 2000).
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UNDERWRITING
UnderPursuant to the terms and subject to the conditions of the Underwriting Agreementunderwriting agreement dated
(the "Underwriting Agreement"), each Underwriterunderwriter named below
(the "Underwriters") has severally agreed to purchase
from Citigroup Capital, and Citigroup Capital has agreed to sell to such
Underwriter,underwriter, the number of Capital Securitiescapital securities set forth opposite the name of
such Underwriterunderwriter below.
NUMBER OF
CAPITAL
UNDERWRITERS SECURITIES
- -------------------------------------------------------------------------------- ------------ ----------
------------
Total
------------
------------............................................................
--------
Total.......................................................
========
The Underwritersunderwriters are obligated to take and pay for the total number of
Capital Securitiescapital securities offered hereby if any such Capital Securitiescapital securities are purchased.
In the event of default by any Underwriter,underwriter, the Underwriting Agreementunderwriting agreement provides
that, in certain circumstances, purchase commitments of the non-defaulting
Underwritersunderwriters may be increased or the Underwriting Agreementunderwriting agreement may be terminated.
Underwriters, dealers and agents may be entitled, under agreements with
Citigroup Capital and the Company,Citigroup, to indemnification by the CompanyCitigroup against
certain civil liabilities including liabilities under the Securities Act.relating to material misstatements and omissions. Underwriters,
dealers and agents may be customers of, engage in transactions with, or perform
services for, Citigroup Capital and the CompanyCitigroup and affiliates of Citigroup
Capital and the CompanyCitigroup in the ordinary course of business.
Citigroup Capital and the CompanyCitigroup have agreed, during the period beginning on
the date of the Underwriting Agreementunderwriting agreement and continuing to and including the date
that is days after the closing date for the purchase of the Capital
Securities,capital securities,
not to offer, sell, contract to sell or otherwise dispose of any preferred
securities, any preferred stock or any other securities, (includingincluding any backup
undertakings of such preferred stock or other securities)securities, of the CompanyCitigroup or of
Citigroup Capital, in each case that are substantially similar to the Capital Securities,capital
securities, or any securities convertible into or exchangeable for the Capital Securitiescapital
securities or such substantially similar securities of either Citigroup Capital
or the Company,Citigroup, except securities in the offering or with the prior written
consent of .
In view ofThe following table summarizes the fact that the proceeds of the sale of the Capital Securities
will ultimatelycommissions to be used to purchase the Junior Subordinated Debt Securities of
the Company, the Underwriting Agreement provides that the Company will pay as
compensationpaid by Citigroup to
the Underwritersunderwriters:
PER CAPITAL
SECURITY TOTAL
----------- -----
Public offering price....................................... $ $
Underwriting commissions to be paid by Citigroup............ (1) (1)
Proceeds to Citigroup Capital............................... $ $
- ---------------
(1) Underwriting commissions of $ per Capital Securitycapital security, or $ for the accounts of
the several Underwriters ($ in the aggregate); PROVIDED that such
compensationall
% capital securities, will be $ per Capital Securitypaid by Citigroup; except that for
sales of 10,000 or more Capital
Securities% capital securities to a single purchaser. Therefore, topurchaser,
the extent of such sales, the
actual amount of Underwriters' Compensationcommissions will be less than$ per capital security.
Citigroup estimates that its total expenses for the aggregate
amount specified in the preceding sentence.offering, excluding
underwriting commissions, will be approximately $9,635,000.00.
The Underwritersunderwriters propose to offer the Capital Securities,capital securities, in part, directly
to the public at the initial public offering price set forth on the cover page
of this Prospectus, andprospectus. The underwriters may also offer the capital securities to certain
dealers at a price that represents a concession not in excess of $ ,
provided that such concession for sales of 10,000 or more Capital Securitiescapital securities to
a single purchaser will not be in excess of $ per Capital Security.capital security. The
Underwritersunderwriters may allow, and such dealers may reallow, a concession not in excess
of $ per Capital Securitycapital security to certain brokers and dealers. After the Capital Securitiescapital
securities are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the representatives of the
Underwriters.
43underwriters.
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121
Application will be made to list the Capital Securitiescapital securities on the NYSE. If
approved for listing, we expectCitigroup expects the Capital Securitiescapital securities will begin
trading on the NYSE within 30 days after they are first issued.
The broker-dealer subsidiaries of the Company (the "Broker-Dealer
Subsidiaries")Citigroup are members of the National
Association of Securities Dealers, Inc. (the "NASD") and subsidiaries of the Company, and may participate in distributions of
the Capital Securities.capital securities. Accordingly, offerings of Capital
Securitiescapital securities in which
Broker-Dealer SubsidiariesCitigroup's broker-dealer subsidiaries participate will conform with the
requirements set forth in Rule 2720 of the Conduct Rules of the NASD.
In connection with this offering and in accordance with applicable law and
industry practice, the underwriters may over-allot or effect transactions whichthat
stabilize, maintain or otherwise affect the market price of the Capital
Securitiescapital
securities at levels above those whichthat might otherwise prevail in the open
market, including by entering stabilizing bids, effecting syndicate covering
transactions or imposing penalty bids.bids, each of which is described below.
- A stabilizing bid means the placing of any bid, or the effecting of any
purchase, for the purpose of pegging, fixing or maintaining the price of
a security.
- A syndicate covering transaction means the placing of any bid on behalf
of the underwriting syndicate or the effecting of any purchase to reduce
a short position created in connection with the offering.
- A penalty bid means an arrangement that permits the managing underwriter
to reclaim a selling concession from a syndicate member in connection
with the offering when Capital Securitiescapital securities originally sold by the
syndicate member are purchased in syndicate covering transactions.
SuchThese transactions may be effected on the NYSE, in the over-the-counter
market, or otherwise. The underwriters are not required to engage in any of
these activities. Anyactivities, or continue such activities if commenced, may be discontinued at any time.commenced.
If any Broker-Dealer Subsidiarybroker-dealer subsidiary of Citigroup makes an offering of the
Capital Securities,capital securities, such offering will be conducted pursuant to theany applicable
sections of Rule 2810 of the Conduct Rules of the NASD. The Underwritersunderwriters may not
confirm sales to any discretionary account without the prior specific written
approval of a customer.
This Prospectusprospectus may also be used by any Broker-Dealer Subsidiarybroker-dealer subsidiary of
Citigroup in connection with offers and sales of the Capital Securitiescapital securities in
market-making transactions at negotiated prices related to prevailing market
prices at the time of sale. Any Broker-Dealer Subsidiaryof Citigroup's broker-dealer subsidiaries may
act as principal or agent in such transactions. No Broker-Dealer Subsidiary hasNone of Citigroup's
broker-dealer subsidiaries have any obligation to make a market in any of the
Capital Securitiescapital securities and may discontinue any market-making activities at any time
without notice, at itstheir sole discretion.
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122
LEGAL MATTERS
The validity of the Capital Securities, the Junior Subordinated Debt
Securities, the Guarantee and certain matters relating thereto and certain
United States federal income tax matters will be passed upon for the Company and
Citigroup Capital by Skadden, Arps, Slate, Meagher & Flom LLP New York, New York. CertainYork, will act as
legal matters
will be passed upon for the Underwriters bycounsel to Citigroup. Dewey Ballantine LLP, New York, New York.York, will act
as legal counsel to the underwriters. Kenneth J. Bialkin, a partner of Skadden,
Arps, Slate, Meagher & Flom LLP is a director of the
CompanyCitigroup and he and other
attorneys in such firm beneficially own an aggregate of less than one percent1% of the
common stock of the Company.Citigroup. Dewey Ballantine LLP has from time to time acted as
counsel for the CompanyCitigroup and certain of its subsidiaries and may do so in the future. A member
of Dewey Ballantine LLP participating in this matter is the beneficial owner of
sharesan aggregate of the Company'sless than 1% of Citigroup's common stock.
EXPERTS
The consolidated financial statements and schedules of Travelers GroupCitigroup Inc.
("Travelers") as of December 31,
19971999 and 1996,1998, and for each of the years in the three-year period ended December
31, 1997, incorporated by reference or included
in Travelers' Annual Report on Form 10-K, as amended, for the year ended
December 31, 1997, and incorporated by reference herein,1999, have been audited by KPMG Peat Marwick LLP, independent certified public accountants, as set forth in
their reports
44
thereon (also incorporated by reference herein), which reports state that KPMG
Peat Marwick LLP did not audit the consolidated financial statements of Salomon
Inc and its subsidiaries, appearing in Salomon Inc's Annual Report on Form 10-K
for the year ended December 31, 1996 (the "Salomon Financials"), as of December
31, 1996, and for each of the two years in the period ended December 31, 1996
and that their opinion with respect to any amounts derived from the Salomon
Financials is based on the report of Arthur Andersen LLP. The consolidated
financial statements of Travelers referred to above are incorporated by
reference herein in reliance upon such reports and upon the authority of said
firms as experts in accounting and auditing.
The consolidated financial statements of Citicorp and its subsidiaries as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997, and the related consolidated balance sheets of
Citibank, N.A. and subsidiaries as of December 31, 1997 and 1996, included in
the 1997 Citicorp Annual Report and Form 10-K, have been incorporated by
reference herein, in reliance upon the report (also incorporated by reference
herein) of KPMG Peat Marwick LLP, independent certified public accountants, and
upon the authority of said firm as experts in accounting and auditing.
The supplemental consolidated financial statements and schedule of Citigroup
Inc. (formerly Travelers Group Inc.) ("Citigroup") as of December 31, 1997 and
1996, and for each of the years in the three-year period ended December 31,
1997, included in Citigroup's Current Report on Form 8-K dated October 26, 1998,
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants, as set forth in their report thereon,on the consolidated financial
statements. The consolidated financial statements are included thereinin Citigroup's
annual report on Form 10-K for the year ended December 31, 1999, as amended, and
incorporated herein by reference which report states that KPMG Peat Marwick LLP
did not audit the Salomon Financials (as defined above) and that their opinion
with respect to any amounts derived from the Salomon Financials is based on thein this prospectus. The report of Arthur Andersen LLP. Generally acceptedKPMG LLP also is
incorporated by reference in this prospectus. The report of KPMG LLP covering
the December 31, 1999 consolidated financial statements refers to changes, in
1999, in Citigroup's methods of accounting principles
proscribe giving effect to a consummated business combination accounted for by
the pooling of interests method in financial statementsinsurance-related assessments,
accounting for insurance and reinsurance contracts that do not includetransfer
insurance risk, and accounting for the datecosts of consummation.start-up activities. The supplemental consolidated financial statements do not
extend through the date of consummation. However, they will become the
historical
consolidated financial statements of Citigroup after financial
statements covering the date of consummation of the business combination are
issued. The supplemental consolidated financial statements referred to above are
incorporated by reference hereinin this prospectus in reliance upon such reports givenreport and
upon the authority of said firmsthat firm as experts in accounting and auditing. To the
extent that KPMG Peat Marwick LLP audits and reports on consolidated financial statements of
Citigroup issued at future dates, and consents to the use of their report
thereon, such consolidated financial statements also will be incorporated by
reference in the registration statement in reliance upon their report and said
authority.
AVAILABLE INFORMATION
Our Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the SEC. You can inspect and
copy such reports and other information at the public reference facilities
maintained by the SEC at: Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549; Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and Seven World Trade Center, New York, New York 10048. You can also
obtain copies of such material from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC
also maintains a site on the World Wide Web, the address of which is
http://www.sec.gov, that contains reports, proxy and information statements and
other information regarding issuers, such as our Company, that file
electronically with the SEC. The Company's common stock is listed on the NYSE
and The Pacific Exchange, Inc., and such reports, proxy statements, and other
information can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, and The Pacific Exchange, Inc.,
301 Pine Street, San Francisco, California 94104, and 233 South Beaudry Avenue,
Los Angeles, California 90012.
4547
We have filed with the SEC a Registration Statement on Form S-3 (the
"Registration Statement," which term shall include all amendments, exhibits,
annexes and schedules thereto) pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Capital Securities. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company and
the Capital Securities, reference is made to the Registration Statement and
exhibits thereto. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete, and in each
instance reference is made to the copy of such contract or document filed as an
exhibit to the Company's Registration Statement, each such statement being
qualified in all respects by such reference.
No separate financial statements of Citigroup Capital have been included or
incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the Capital Securities
because (i) all of the voting securities of the Citigroup Capital will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) the Citigroup Capital has no independent operations but exists for the
sole purpose of issuing securities representing undivided beneficial interests
in its assets and investing the proceeds thereof in Junior Subordinated Debt
Securities issued by the Company, and (iii) the obligations of the Citigroup
Capital under the Capital Securities are fully and unconditionally guaranteed by
the Company to the extent that Citigroup Capital has funds available to meet
such obligations. See "Description of the Junior Subordinated Debt Securities"
and "Description of Guarantee."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Our Company incorporates by reference into this Prospectus the following
documents previously filed with the SEC pursuant to the Exchange Act:
1. Annual Report on Form 10-K, as amended, of the Company for the fiscal
year ended December 31, 1997;
2. Quarterly Reports on Form 10-Q of the Company for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998; and
3. Current Reports on Form 8-K of the Company, dated January 6, 1998,
January 26, 1998, February 17, 1998, April 6, 1998, April 8, 1998,
April 20, 1998, June 1, 1998, July 20, 1998, August 18, 1998, August
31, 1998, October 8, 1998, October 21, 1998, October 26, 1998,
October 29, 1998, November 1, 1998 and November 13, 1998.
Any documents we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the later of
(i) the termination of the offering of Capital Securities hereby and (ii) the
date on which any Broker-Dealer Subsidiary ceases offering and selling Capital
Securities pursuant to this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such document.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed to constitute a part of
this Prospectus except as so modified or superseded.
We will provide without charge to each person to whom this Prospectus is
delivered, on the written or oral request of any such person, a copy of any or
all of the documents incorporated by reference in the Registration Statement of
which this Prospectus forms a part other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents.
Requests should be directed to Citigroup Inc., 153 East 53(rd) Street, New York,
NY 10043; Attention: Treasurer; telephone (212) 559-1000.
46
123
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securities
CITIGROUP CAPITAL SECURITIES
% CAPITAL SECURITIES
$ LIQUIDATION AMOUNT
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CITIGROUP INC.
[LOGO]
-------[CITIGROUP LOGO]
------------------------
PROSPECTUS
---------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
124
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the
Registrants in connection with the Securities being registered hereby. All of
the fees set forth below are estimates except for the Commission Registration
fee and the NASD fee.
Commission Registration Fee................................... $1,153,700.00Fee................................. $5,402,628.00
Accounting Fees............................................... 150,000.00Fees............................................. 250,000.00
Trustees' Fees and Expenses................................... 75,000.00
Blue Sky Fees and Expenses.................................... 40,000.00Expenses................................. 315,000.00
Printing and Engraving Fees................................... 500,000.00Fees................................. 1,000,000.00
Rating Agency Fees............................................Fees.......................................... 2,000,000.00
NASD Fee......................................................Fee.................................................... 30,500.00
Legal Fees and Expenses.......................................Expenses..................................... 500,000.00
Stock Exchange Listing Fees................................... 254,300.00
Miscellaneous................................................. 6,500.00
------------
Total..................................................... $4,710,000.00
------------
------------Fees................................. 135,000.00
Miscellaneous............................................... 1,872.00
-------------
Total............................................. $9,635,000.00
=============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware, (the "DGCL")or DGCL, empowers a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that hethe person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by himthe person in connection with such action, suit or proceeding if hethe
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe histhe person's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interest of the corporation, and with respect to
any criminal action or proceeding, had reasonable cause to believe that the
person's conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by himthe person in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner hethe person reasonably believed to be in or not
opposed to the best interests of the corporation, and except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
Subsection (d) of Section 145 of the DGCL provides that any indemnification
under subsections (a) and (b) of Section 145 (unless ordered by a court) shall
be made by the corporation only as authorized in
II-1
125
the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of Section 145. Such determination shall be made, with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by the majority vote of such directors,
even though less than a quorum or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
Section 145 of the DGCL further provides that to the extent a present or
former director or officer of a corporation has been successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, hesuch person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by himsuch person in connection
therewith;therewith and that such expenses may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in Section 145 of the DGCL; that
any indemnification and advancement of expenses provided for by, or granted pursuant
to Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by, or granted
pursuant to Section 145 shall, unless otherwise provided when authorized and
ratified, continue as to sucha person who has ceased to be a director, officer,
employee or agent and shall inure to the
II-1
benefit of such person's heirs,
executors and administrators; and empowers the corporation to purchase and
maintain insurance on behalf of a director, officer, employee or officeragent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against himsuch
person and incurred by himsuch person in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liabilities under Section 145. Section Four of Article IV of
the Company'sCitigroup's By-Laws provides that the CompanyCitigroup shall indemnify its directors and
officers to the fullest extent permitted by the DGCL.
The CompanyCitigroup also provides liability insurance for its directors and officers
which provides for coverage against loss from claims made against directors and
officers in their capacity as such, including, subject to certain exceptions,
liabilities under the federal securities laws.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Tenth of the
Company'sCitigroup's Restated Certificate of Incorporation limits the
liability of directors to the fullest extent permitted by Section 102(b)(7).
The Declaration of each of the Citigroup Trusts provides that no
Institutional Trustee or any of its affiliates, Delaware Trustee or any of its
affiliates, or officer, director, shareholder, member, partner, employee,
representative custodian, nominee or agent of the Institutional Trustee or the
Delaware Trustee (each a "Fiduciary Indemnified Person"), and no Regular
Trustee, affiliate of any Regular Trustee, or any officer, director,
shareholder, member, partner, employee, representative or agent of any Regular
Trustee, or any employee or agent of such Citigroup Trust or its affiliates
(each a "Company Indemnified Person") shall be liable, responsible or
accountable in damages or otherwise to such Citigroup Trust, any affiliate of
such Citigroup Trust or any holder of securities issued by such Citigroup Trust,
or to any officer, director, shareholder, partner, member, representative,
employee or agent of such Citigroup Trust or its Affiliates for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
II-2
126
Fiduciary Indemnified Person or Company Indemnified Person in good faith on
behalf of such Citigroup Trust and in a manner such Fiduciary Indemnified Person
or Company Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Fiduciary Indemnified Person or Company Indemnified
Person by such Declaration or by law, except that a Fiduciary Indemnified Person
or Company Indemnified Person shall be liable for any loss, damage, or claim
incurred by reason of such Fiduciary Indemnified Person's or Company Indemnified
Person's gross negligence (or in the case of a Fiduciary Indemnified Person,
negligence) or willful misconduct with respect to such acts or omissions. The
Declaration of each Citigroup Trust also provides that, to the full extent
permitted by law, the CompanyCitigroup shall indemnify any Company Indemnified Person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in right of such Citigroup Trust)
by reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Citigroup Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Declaration of each
Citigroup Trust also provides that to the full extent permitted by law,
the
CompanyCitigroup shall indemnify any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in right of such Citigroup Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
II-2
opposed to the best interests of the Citigroup Trust and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such Company Indemnified Person shall have been adjudged to be liable to
the Citigroup Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper. The Declaration of each Citigroup Trust further provides that
expenses (including attorneys' fees) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or
proceeding referred to in the immediately preceding two sentences shall be paid
by the CompanyCitigroup in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the CompanyCitigroup as authorized in the
Declaration.
The directors and officers of the CompanyCitigroup and the Regular Trustee are covered
by insurance policies indemnifying them against certain liabilities, including
certain liabilities arising under the Securities Act, which might be incurred by
them in such capacities and against which they cannot be indemnified by
the CompanyCitigroup or the Citigroup Trusts. Any agents, dealers or underwriters who
execute any underwriting or distribution agreement relating to securities
offered pursuant to this Registration Statement will agree to indemnify
the
Company'sCitigroup's directors and their officers and the Citigroup Trustees who signed
the Registration Statement against certain liabilities that may arise under the
Securities Act with respect to information furnished to the CompanyCitigroup or any of the
Citigroup Trusts by or on behalf of such indemnifying party.
For the undertaking with respect to indemnification, see Item 17 herein.
See the forms of Underwriting Agreements and the form of Distribution
Agreement filed or to be filed as Exhibits 1.01, 1.02, 1.03, 1.04, 1.05 and 1.06
for certain indemnification provisions.
II-3
127
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------- -------------------------------------------------------------------------------------------------
1.01 -- Underwriting Agreement Basic Provisions, dated January 12,
1993 relating to Debt Securities (incorporated by reference
to Exhibit 1.01 to Amendment No. 1 to the Company'sCitigroup's
Registration Statement on Form S-3 (No. 33-55542)).
1.02 -- Form of Underwriting Agreement for Index Warrants will be
filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference.
1.03 -- Form of Underwriting Agreement for Preferred Stock
(incorporated by reference to Exhibit 1.2 to the Company'sCitigroup's
Registration Statement on Form S-3 (No. 333-27155)).
1.04 -- Form of Distribution Agreement relating to the Company'sCitigroup's
Medium-Term Senior Notes, Series A,D, and Medium-Term
Subordinated Notes, Series A.*D.+
1.05 -- Form of Underwriting Agreement for Capital Securities.*Securities
(incorporated by reference to Exhibit 1.05 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
1.06 -- Form of Underwriting Agreement for Common Stock will be
filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference.
4.01 -- Restated Certificate of Incorporation of the Company.*Citigroup
(incorporated by reference to Exhibit 4.01 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.02 -- Certificate of Designation of 5.321% Cumulative Preferred
Stock, Series YY, of Citigroup (incorporated by reference to
Exhibit 4.45 to Citigroup's Registration Statement on
Form S-3 (No. 333-68949-01 to 08)).
4.03 -- Certificate of Amendment to Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.01.03
to Citigroup's Quarterly Report on Form 10-Q dated March 31,
2000).
4.04 -- By-Laws of the CompanyCitigroup, as amended effective October 8, 199826, 1999
(incorporated by reference to Exhibit 3.02 to the Company'sCitigroup's
Quarterly Report on Form 10-Q dated September 30, 1998)1999).
4.034.05 -- Indenture, dated as of March 15, 1987, between Primerica
Corporation, a New Jersey corporation, and The Bank of New
York, as trustee (incorporated by reference to Exhibit 4.01
to the Company's
Registration Statement on Form S-3 (No. 33-55542)).
II-3
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
4.04Citigroup's Registration Statement on Form S-3 (No.
33-55542)).
4.06 -- First Supplemental Indenture, dated as of December 15, 1988,
among Primerica Corporation, Primerica Holdings, Inc. and
The Bank of New York, as trustee (incorporated by reference
to Exhibit 4.02 to the Company'sCitigroup's Registration Statement on
Form S-3 (No. 33-55542)).
4.054.07 -- Second Supplemental Indenture, dated as of January 31, 1991,
between Primerica Holdings, Inc. and The Bank of New York,
as trustee (incorporated by reference to Exhibit 4.03 to
the Company'sCitigroup's Registration Statement on Form S-3 (No.
33-55542)).
4.064.08 -- Third Supplemental Indenture, dated as of December 9, 1992,
among Primerica Holdings, Inc., Primerica Corporation and
The Bank of New York, as trustee (incorporated by reference
to Exhibit 5 to the Company'sCitigroup's Form 8-A dated December 21,
1992, with respect to the Company'sCitigroup's 7 3/4% Notes Due June 15,
1999 (No. 1-9924)).
4.074.09 -- Fourth Supplemental Indenture, dated as of November 2, 1998,
between the CompanyCitigroup and The Bank of New York, as trustee
(incorporated by reference to Exhibit 4.01 to the Company'sCitigroup's
Quarterly Report on Form 10-Q dated September 30, 1998).
4.084.10 -- Indenture, dated as of July 17, 1998, between theCitigroup and
Bank One Trust Company, andN.A. (formerly The First National
Bank of Chicago,Chicago), as trustee (incorporated by reference to
Exhibit 4.05 to the Company'sCitigroup's Registration Statement on Form
S-3 (No. 333-51201)).
4.094.11 -- First Supplemental Indenture, dated as of December 15, 1998
between theCitigroup and Bank One Trust Company, andN.A. (formerly
The First National Bank of Chicago,Chicago), as trustee.*
4.10trustee
(incorporated by reference to Exhibit 4.09 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.12 -- Second Supplemental Indenture, dated as of January 21, 1999,
between Citigroup and Bank One Trust Company, N.A. (formerly
The First National Bank of Chicago), as trustee
(incorporated by reference to Exhibit 4.44 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.13 -- Form of proposed Index Warrant Agreement for Index Warrants,
with form of proposed Index Warrant Certificate attached as
an exhibit thereto, will be filed as an Exhibit to a Current
Report on Form 8-K and incorporated herein by reference.
4.114.14 -- Form of Certificate for Preferred Stock will be filed as an
exhibit to a Current Report on Form 8-K and incorporated
herein by reference.
4.124.15 -- Form of Deposit Agreement (incorporated by reference to
Exhibit 4.174.18 to the Company'sCitigroup's Registration Statement on Form
S-3 (No. 333-27155)).
4.134.16 -- Form of Depositary Receipt (included in Exhibit 4.12).
4.144.15).
II-4
128
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.17 -- Forms of Medium-Term Senior Notes, Series AD and Medium-Term
Subordinated Notes, Series A.*
4.15 -- Certificate of Trust of Citigroup Capital VI, as amended.*
4.16D.+
4.18 -- Certificate of Trust of Citigroup Capital VII, as amended.*
4.17amended
(incorporated by reference to Exhibit 4.16 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.19 -- Certificate of Trust of Citigroup Capital VIII, as amended.*
4.18 -- Certificate of Trust of Citigroup Capital IX.*
4.19 -- Certificate of Trust of Citigroup Capital X.*amended
(incorporated by reference to Exhibit 4.17 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.20 -- Certificate of Trust of Citigroup Capital XI.*IX (incorporated
by reference to Exhibit 4.18 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.21 -- Certificate of Trust of Citigroup Capital XII.*X (incorporated by
reference to Exhibit 4.19 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.22 -- Certificate of Trust of Citigroup Capital XIII.*XI (incorporated
by reference to Exhibit 4.20 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.23 -- Form of Amended and Restated DeclarationCertificate of Trust forof Citigroup Capital VI.*XII (incorporated
by reference to Exhibit 4.21 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.24 -- Form of Amended and Restated DeclarationCertificate of Trust forof Citigroup Capital VII.*XIII (incorporated
by reference to Exhibit 4.22 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.25 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital VIII.*VII (incorporated by reference to Exhibit
4.24 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.26 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital IX.*VIII (incorporated by reference to Exhibit
4.25 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.27 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital X.*IX (incorporated by reference to Exhibit
4.26 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.28 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital XI.*X (incorporated by reference to Exhibit
4.27 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.29 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital XII.*XI (incorporated by reference to Exhibit
4.28 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.30 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital XIII.*XII (incorporated by reference to Exhibit
4.29 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.31 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital XIII (incorporated by reference to Exhibit
4.30 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.32 -- Form of Indenture between the CompanyCitigroup and The Chase Manhattan
Bank, as trustee (incorporated by reference to Exhibit 4.11
to the Company's Registration Statement on Form S-3 (No. 333-12439)).
II-4
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
4.32Citigroup's Registration Statement on Form S-3 (No.
333-12439)).
4.33 -- First Supplemental Indenture, dated as of December 15, 1998,
between the CompanyCitigroup and The Chase Manhattan Bank, as trustee.*
4.33trustee
(incorporated by reference to Exhibit 4.32 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.34 -- Forms of Capital Security for each of the Trusts (included
in Exhibits 4.23-4.30)4.25-4.31).
4.344.35 -- Forms of Common Security for each of the Trusts (included in
Exhibits 4.23-4.30).
4.35 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital VI (incorporated by
reference to Exhibit 4.14 to the Company's Registration Statement on Form S-3 (No. 333-27155))4.25-4.31).
4.36 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital VII (incorporated by reference to Exhibit
4.15 to the Company'sCitigroup's Registration Statement on Form S-3 (No.
333-27155)).
4.37 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital VIII.*VIII (incorporated by reference to Exhibit
4.37 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
II-5
129
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.38 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital IX.*IX (incorporated by reference to Exhibit
4.38 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.39 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital X.*X (incorporated by reference to Exhibit
4.39 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.40 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital XI.*XI (incorporated by reference to Exhibit
4.40 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.41 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital XII.*XII (incorporated by reference to Exhibit
4.41 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.42 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital XIII.*XIII (incorporated by reference to Exhibit
4.42 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.43 -- Form of Junior Subordinated Debt Securities (included in
Exhibit 4.31)4.32).
5.01 -- Opinion of Stephanie B. Mudick, Esq.*+
5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with
respect to the Capital Securities and Preferred Stock.*+
12.01 -- Supplemental Calculation of Ratio of Income to Fixed Charges
and(incorporated by reference to Exhibit 12.01 to Citigroup's
Quarterly Report on Form 10-Q dated September 30, 2000).
12.02 -- Supplemental Calculation of Ratio of Income to Combined
Fixed Charges Including Preferred Stock Dividends
(incorporated by reference to Exhibit 12.01 to the Company's CurrentCitigroup's
Quarterly Report on Form 8-K10-Q dated November 13, 1998)September 30, 2000).
23.01 -- Consent of KPMG Peat Marwick LLP, independent public accountants.*
23.02 -- Consent of KPMG Peat Marwick LLP, independent public accountants.*
23.03 -- Consent of KPMG Peat Marwick LLP, independent public accountants.*
23.04 -- Consent of Arthur Andersen LLP, independent public accountants.*
23.05 -- Consent of Stephanie B. Mudick, Esq. (included in Exhibit
5.01).
23.06+
23.03 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.02).+
24.01 -- Powers of Attorney of certain Directors.*+
25.01 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939, as amended, of The Bank of
New York, as Trustee under the Indenture dated as of March
15, 1987, as supplemented.*+
25.02 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939, as amended, of Bank One
Trust Company, N.A. (formerly The First National Bank of
Chicago,Chicago), as Trustee under the Indenture dated as of July
17, 1998, as supplemented.*+
25.03 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
trustee under the Declaration of Trust of Citigroup Capital
VI.*VII.+
25.04 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
trustee under the Declaration of Trust of Citigroup Capital
VII.*VIII.+
25.05 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
trustee under the Declaration of Trust of Citigroup Capital
VIII.*IX.+
25.06 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
trustee under the Declaration of Trust of Citigroup Capital
IX.*
II-5
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
X.+
25.07 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
trusteeTrustee under the Declaration of Trust of Citigroup Capital
X.*XI.+
25.08 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Trustee under the Declaration of Trust of Citigroup Capital
XI.*XII.+
25.09 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Trustee under the Declaration of Trust of Citigroup Capital
XII.*XIII.+
25.10 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Citigroup Capital XIII.*
25.11 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Trustee under the Indenture dated as of October 7, 1996, as
supplemented.*+
II-6
130
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
25.11 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Capital Securities Guarantee of
Citigroup Inc. for the benefit of holders of Preferred
Capital Securities of Citigroup Capital VII.+
25.12 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Capital Securities Guarantee of
Citigroup Inc. for the benefit of holders of Capital
Securities of Citigroup Capital VI.*VIII.+
25.13 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Capital Securities Guarantee of
Citigroup Inc. for the benefit of holders of Preferred Capital
Securities of Citigroup Capital VII.*IX.+
25.14 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Capital Securities Guarantee of
Citigroup Inc. for the benefit of holders of Capital
Securities of Citigroup Capital VIII.*X.+
25.15 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Capital Securities Guarantee of
Citigroup Inc. for the benefit of holders of Capital
Securities of Citigroup Capital IX.*XI.+
25.16 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Capital Securities Guarantee of
Citigroup Inc. for the benefit of holders of Capital
Securities of Citigroup Capital X.*XII.+
25.17 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Capital Securities Guarantee of
Citigroup Inc. for the benefit of holders of Capital
Securities of Citigroup Capital XI.*
25.18 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XII.*
25.19 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XIII.*+
- ---------------------------------------
* Filed herewith.
II-6
+ Filed previously.
ITEM 17. UNDERTAKINGS.
Each of Citigroup Inc., Citigroup Capital VI, Citigroup Capital VII,
Citigroup Capital VIII, Citigroup Capital IX, Citigroup Capital X, Citigroup
Capital XI, Citigroup Capital XII and Citigroup Capital XIIIThe undersigned registrants hereby undertakes:undertake:
(A)(1) To file, during any period in which offers or sales are being
made, of the securities registered hereby, a post-effective amendment to this registration statement:
(i) toTo include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) toTo reflect in the prospectus any facts or events arising after the
effective date of thisthe registration statement (or the most recent
post-effective amendment hereof)thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement; and
(iii) toTo include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
PROVIDED, HOWEVER,provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by
Citigroup Inc. pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, that are incorporated by reference in
this registration statement.
II-7
131
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered herein,therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) That, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing of Citigroup Inc.'s annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, as amended, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934, as amended) that is incorporated by
reference in thisthe registration statement shall be deemed to be a new
registration statement relating to the securities offered herein,therein, and the
offering of such securities at that time shall be deemed to be the initial
BONA FIDEbona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers
and controlling persons of any suchthe registrants pursuant to the provisions
described under Item 15 above, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in suchthe Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of
expenses incurred or paid by a director, officer or controlling person of
the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, hereby, the registrants will,
unless in the opinion of their counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in suchthe Act and will be governed by the final adjudication of such
issue.
(D)(1) For purposes of determining any liability under the Securities
Act of 1933, as amended, the information omitted from the form of
prospectus filed as part of this registration statement in
II-7
reliance upon
Rule 430A and contained in a form of prospectus filed by the registrants
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of
1933, as amended, shall be deemed to be part of this registration statement
as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial BONA FIDEbona fide offering thereof.
II-8
132
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Citigroup Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement or Amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of New York, State of New
York, this 15(th)20th day of December, 1998.
CITIGROUP INC.
By: /s/ HEIDI G. MILLER
-----------------------------------------
Heidi G. MillerNovember, 2000.
CITIGROUP INC.
By: /s/ TODD S. THOMSON
------------------------------------
Todd S. Thomson
Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OFPursuant to the requirements of the Securities Act of 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED THIS 15(TH) DAY OF DECEMBER, 1998.as amended,
this Registration Statement or Amendment thereto has been signed below by the
following persons in the capacities indicated this 20th day of November, 2000.
SIGNATURES
- ------------------------------------------------------------------
/s/ JOHN S. REED Chairman of the Board, Co-Chief Executive Officer
-------------------------------------------- (Principal Executive Officer) and Director
John S. Reed
/s/ SANFORD I. WEILL Chairman of the Board, Co-ChiefChief Executive Officer
--------------------------------------------- --------------------------------------------------- (Principal Executive Officer) and Director
Sanford I. Weill
/s/ HEIDI G. MILLERTODD S. THOMSON Chief Financial Officer -------------------------------------------- (Principal Financial
- --------------------------------------------------- Officer)
Heidi G. MillerTodd S. Thomson
/s/ IRWIN ETTINGER Chief Accounting Officer -------------------------------------------- (Principal Accounting
- --------------------------------------------------- Officer)
Irwin Ettinger
/s/ ROGER W. TRUPIN Controller (Principal Accounting Officer)
--------------------------------------------- ---------------------------------------------------
Roger W. Trupin
* Director
--------------------------------------------- ---------------------------------------------------
C. Michael Armstrong
* Director
--------------------------------------------
Judith Arron
* Director
--------------------------------------------- ---------------------------------------------------
Alain J.P. Belda
* Director
--------------------------------------------- ---------------------------------------------------
Kenneth J. Bialkin
* Director
--------------------------------------------- ---------------------------------------------------
Kenneth T. Derr
* Director
--------------------------------------------- ---------------------------------------------------
John M. Deutch
II-9
133
SIGNATURES
----------
* Director
--------------------------------------------- ---------------------------------------------------
Ann Dibble Jordan
* Director
--------------------------------------------- ---------------------------------------------------
Robert I. Lipp
* Director
- ---------------------------------------------------
Reuben Mark
* Director
--------------------------------------------- ---------------------------------------------------
Michael T. Masin
* Director
--------------------------------------------- ---------------------------------------------------
Dudley C. Mecum
* Director
--------------------------------------------- ---------------------------------------------------
Richard D. Parsons
* Director
--------------------------------------------- ---------------------------------------------------
Andrall E. Pearson
* Director
--------------------------------------------- ---------------------------------------------------
Robert B. ShapiroE. Rubin
* Director
--------------------------------------------- ---------------------------------------------------
Franklin A. Thomas
* Director
--------------------------------------------
Edgar S. Woolard
* Director
--------------------------------------------- ---------------------------------------------------
Arthur Zankel
*By: /s/ HEIDI G. MILLER
----------------------------------------
Heidi G. MillerSTEPHANIE B. MUDICK
- ---------------------------------------------------
Stephanie B. Mudick
Attorney-in-Fact
II-10
134
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
each of Citigroup Capital VI, Citigroup Capital VII, Citigroup Capital VIII, Citigroup Capital IX,
Citigroup Capital X, Citigroup Capital XI, Citigroup Capital XII and Citigroup
Capital XIII certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement or Amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of New York, State of New
York, this 15(th)20th day of December, 1998.
CITIGROUP CAPITAL VI
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL VII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL VIII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL IX
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------November, 2000.
CITIGROUP CAPITAL VII
By: /s/ TODD S. THOMSON
------------------------------------
Todd S. Thomson, as Trustee
By: /s/ IRWIN ETTINGER
------------------------------------
Irwin Ettinger, as Trustee
II-11
CITIGROUP CAPITAL X
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL XI
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL XII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL XIII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------By: /s/ STEPHANIE B. MUDICK
------------------------------------
Stephanie B. Mudick, as Trustee
CITIGROUP CAPITAL VIII
By: /s/ TODD S. THOMSON
------------------------------------
Todd S. Thomson, as Trustee
By: /s/ IRWIN ETTINGER
------------------------------------
Irwin Ettinger, as Trustee
By: /s/ STEPHANIE B. MUDICK
------------------------------------
Stephanie B. Mudick, as Trustee
CITIGROUP CAPITAL IX
By: /s/ TODD S. THOMSON
------------------------------------
Todd S. Thomson, as Trustee
By: /s/ IRWIN ETTINGER
------------------------------------
Irwin Ettinger, as Trustee
By: /s/ STEPHANIE B. MUDICK
------------------------------------
Stephanie B. Mudick, as Trustee
II-11
135
CITIGROUP CAPITAL X
By: /s/ TODD S. THOMSON
----------------------------------
Todd S. Thomson, as Trustee
By: /s/ IRWIN ETTINGER
------------------------------------
Irwin Ettinger, as Trustee
By: /s/ STEPHANIE B. MUDICK
------------------------------------
Stephanie B. Mudick, as Trustee
CITIGROUP CAPITAL XI
By: /s/ TODD S. THOMSON
------------------------------------
Todd S. Thomson, as Trustee
By: /s/ IRWIN ETTINGER
------------------------------------
Irwin Ettinger, as Trustee
By: /s/ STEPHANIE B. MUDICK
------------------------------------
Stephanie B. Mudick, as Trustee
CITIGROUP CAPITAL XII
By: /s/ TODD S. THOMSON
------------------------------------
Todd S. Thomson, as Trustee
By: /s/ IRWIN ETTINGER
------------------------------------
Irwin Ettinger, as Trustee
By: /s/ STEPHANIE B. MUDICK
------------------------------------
Stephanie B. Mudick, as Trustee
II-12
136
CITIGROUP CAPITAL XIII
By: /s/ TODD THOMSON
----------------------------------
Todd Thomson, as Trustee
By: /s/ IRWIN ETTINGER
------------------------------------
Irwin Ettinger, as Trustee
By: /s/ STEPHANIE B. MUDICK
------------------------------------
Stephanie B. Mudick, as Trustee
II-13
137
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1.01 -- Underwriting Agreement Basic Provisions, dated January 12,
1993 relating to Debt Securities (incorporated by reference
to Exhibit 1.01 to Amendment No. 1 to Citigroup's
Registration Statement on Form S-3 (No. 33-55542)).
1.02 -- Form of Underwriting Agreement for Index Warrants will be
filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference.
1.03 -- Form of Underwriting Agreement for Preferred Stock
(incorporated by reference to Exhibit 1.2 to Citigroup's
Registration Statement on Form S-3 (No. 333-27155)).
1.04 -- Form of Distribution Agreement relating to Citigroup's
Medium-Term Senior Notes, Series D. and Medium-Term
Subordinated Notes, Series D.+
1.05 -- Form of Underwriting Agreement for Capital Securities
(incorporated by reference to Exhibit 1.05 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
1.06 -- Form of Underwriting Agreement for Common Stock will be
filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference.
4.01 -- Restated Certificate of Incorporation of Citigroup
(incorporated by reference to Exhibit 4.01 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.02 -- Certificate of Designation of 5.321% Cumulative Preferred
Stock, Series YY, of Citigroup. (incorporated by reference
to Exhibit 4.45 to Citigroup's Registration Statement on
Form S-3 (No. 333-68949-01 to 08)).
4.03 -- Certificate of Amendment to Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.01.03
to Citigroup's Quarterly Report on Form 10-Q dated May 12,
2000.)
4.04 -- By-Laws of Citigroup, as amended effective October 26, 1999
(incorporated by reference to Exhibit 3.02 to Citigroup's
Quarterly Report on Form 10-Q dated September 30, 1999).
4.05 -- Indenture, dated as of March 15, 1987, between Primerica
Corporation, a New Jersey corporation, and The Bank of New
York, as trustee (incorporated by reference to Exhibit 4.01
to Citigroup's Registration Statement on Form S-3 (No.
33-55542)).
4.06 -- First Supplemental Indenture, dated as of December 15, 1988,
among Primerica Corporation, Primerica Holdings, Inc. and
The Bank of New York, as trustee (incorporated by reference
to Exhibit 4.02 to Citigroup's Registration Statement on
Form S-3 (No. 33-55542)).
4.07 -- Second Supplemental Indenture, dated as of January 31, 1991,
between Primerica Holdings, Inc. and The Bank of New York,
as trustee (incorporated by reference to Exhibit 4.03 to
Citigroup's Registration Statement on Form S-3 (No.
33-55542)).
4.08 -- Third Supplemental Indenture, dated as of December 9, 1992,
among Primerica Holdings, Inc., Primerica Corporation and
The Bank of New York, as trustee (incorporated by reference
to Exhibit 5 to Citigroup's Form 8-A dated December 21,
1992, with respect to Citigroup's 7 3/4% Notes Due June 15,
1999 (No. 1-9924)).
4.09 -- Fourth Supplemental Indenture, dated as of November 2, 1998,
between Citigroup and The Bank of New York, as trustee
(incorporated by reference to Exhibit 4.01 to Citigroup's
Quarterly Report on Form 10-Q dated September 30, 1998).
4.10 -- Indenture, dated as of July 17, 1998, between Citigroup and
Bank One Trust Company, N.A. (formerly The First National
Bank of Chicago), as trustee (incorporated by reference to
Exhibit 4.05 to Citigroup's Registration Statement on Form
S-3 (No. 333-51201)).
4.11 -- First Supplemental Indenture, dated as of December 15, 1998
between Citigroup and Bank One Trust Company, N.A. (formerly
The First National Bank of Chicago), as trustee
(incorporated by reference to Exhibit 4.09 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.12 -- Second Supplemented Indenture, dated as of January 21, 1999,
between Citigroup and The First National Bank of Chicago
(predecessor to Bank One Trust Company, N.A.), as trustee
(incorporated by reference to Exhibit 4.44 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
II-12 138
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.13 -- Form of proposed Index Warrant Agreement for Index Warrants,
with form of proposed Index Warrant Certificate attached as
an exhibit thereto, will be filed as an Exhibit to a Current
Report on Form 8-K and incorporated herein by reference.
4.14 -- Form of Certificate for Preferred Stock will be filed as an
exhibit to a Current Report on Form 8-K and incorporated
herein by reference.
4.15 -- Form of Deposit Agreement (incorporated by reference to
Exhibit 4.18 to Citigroup's Registration Statement on Form
S-3 (No. 333-27155)).
4.16 -- Form of Depositary Receipt (included in Exhibit 4.15).
4.17 -- Forms of Medium-Term Senior Notes, Series D and Medium-Term
Subordinated Notes, Series D.+
4.18 -- Certificate of Trust of Citigroup Capital VII, as amended
(incorporated by reference to Exhibit 4.16 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.19 -- Certificate of Trust of Citigroup Capital VIII, as amended
(incorporated by reference to Exhibit 4.17 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.20 -- Certificate of Trust of Citigroup Capital IX (incorporated
by reference to Exhibit 4.18 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.21 -- Certificate of Trust of Citigroup Capital X (incorporated by
reference to Exhibit 4.19 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.22 -- Certificate of Trust of Citigroup Capital XI (incorporated
by reference to Exhibit 4.20 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.23 -- Certificate of Trust of Citigroup Capital XII (incorporated
by reference to Exhibit 4.21 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.24 -- Certificate of Trust of Citigroup Capital XIII (incorporated
by reference to Exhibit 4.22 to Citigroup's Registration
Statement on Form S-3 (No. 333-68949-01 to 08)).
4.25 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital VII. (incorporated by reference to Exhibit
4.24 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.26 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital VIII (incorporated by reference to Exhibit
4.25 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.27 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital IX (incorporated by reference to Exhibit
4.26 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.28 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital X (incorporated by reference to Exhibit
4.27 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.29 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital XI (incorporated by reference to Exhibit
4.28 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.30 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital XII (incorporated by reference to Exhibit
4.29 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
139
EXHIBIT
NUMBER DESCRIPTION
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4.31 -- Form of Amended and Restated Declaration of Trust for
Citigroup Capital XIII (incorporated by reference to Exhibit
4.30 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08), except that the Regular Trustees shall
be Stephanie B. Mudick, Todd S. Thomson and Irwin Ettinger).
4.32 -- Form of Indenture between Citigroup and The Chase Manhattan
Bank, as trustee (incorporated by reference to Exhibit 4.11
to Citigroup's Registration Statement on Form S-3 (No.
333-12439)).
4.33 -- First Supplemental Indenture, dated as of December 15, 1998,
between Citigroup and The Chase Manhattan Bank, as trustee
(incorporated by reference to Exhibit 4.32 to Citigroup's
Registration Statement on Form S-3 (No. 333-68949-01 to
08)).
4.34 -- Forms of Capital Security for each of the Trusts (included
in Exhibits 4.25-4.31).
4.35 -- Forms of Common Security for each of the Trusts (included in
Exhibits 4.25-4.31).
4.36 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital VII (incorporated by reference to Exhibit
4.15 to Citigroup's Registration Statement on Form S-3 (No.
333-27155)).
4.37 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital VIII (incorporated by reference to Exhibit
4.37 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.38 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital IX (incorporated by reference to Exhibit
4.38 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.39 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital X (incorporated by reference to Exhibit
4.39 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.40 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital XI (incorporated by reference to Exhibit
4.40 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.41 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital XII (incorporated by reference to Exhibit
4.41 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.42 -- Form of Guarantee with respect to the Capital Securities of
Citigroup Capital XIII (incorporated by reference to Exhibit
4.42 to Citigroup's Registration Statement on Form S-3 (No.
333-68949-01 to 08)).
4.43 -- Form of Junior Subordinated Debt Securities (included in
Exhibit 4.32).
5.01 -- Opinion of Stephanie B. Mudick, Esq.+
5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with
respect to the Capital Securities and Preferred Stock.+
12.01 -- Supplemental Calculation of Ratio of Income to Fixed Charges
(incorporated by reference to Exhibit 12.01 to Citigroup's
Quarterly Report on Form 10-Q dated September 30, 2000).
12.02 -- Supplemental Calculation of Ratio of Income to Combined
Fixed Charges Including Preferred Stock Dividends
(incorporated by reference to Exhibit 12.01 to Citigroup's
Quarterly Report on Form 10-Q dated September 30, 2000).
23.01 -- Consent of KPMG LLP, independent public accountants.*
23.02 -- Consent of Stephanie B. Mudick, Esq. (included in Exhibit
5.01).+
23.03 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.02).+
24.01 -- Powers of Attorney of certain Directors.+
25.01 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939, as amended, of The Bank of
New York, as Trustee under the Indenture dated as of March
15, 1987, as supplemented.+
140
EXHIBIT
NUMBER DESCRIPTION
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