AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1998FEBRUARY 10, 1999
REGISTRATION NO. 333-333-68949-01 TO 08
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 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 OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBERS)
153 EAST 53RD STREET
NEW YORK, NY 10043
(212) 559-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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STEPHANIE B. MUDICK, ESQ.
GENERAL COUNSEL-CORPORATE LAW
CITIGROUP INC.
153 EAST 53RD STREET
NEW YORK, NY 10043
(212) 559-1000
(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 (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 Form 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 Form 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.)
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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) 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), 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 timeINTRODUCTORY 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 A, and
Medium-Term Subordinated Notes, Series A, 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 registration of $4,150,000,000 aggregate principal
amount ofcapital 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.
3each
offering.
2
SUBJECT TO COMPLETION, DATED DECEMBER 15, 1998
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE 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.FEBRUARY 10, 1999
The information in this prospectus is not complete and may be changed. Citigroup
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.
PROSPECTUS
[LOGO]
May Offer--
DEBT SECURITIES
INDEX WARRANTS
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WeDebt 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 Inc. These securities are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency or
instrumentality.
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, 19981999
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
the "Company")most significant terms of the offered securities. 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
6 for information on Citigroup, including its financial statements.
CITIGROUP INC.
Citigroup's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSBCSSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, the CompanyCitigroup 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
Citigroup. Citigroup's principal executive office is at 153 East 53(rd) Street,
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 $6,000,000,000 of:
- debt securities;
- index warrants;
- preferred stock;
- depositary shares; and
- common stock.
A prospectus supplement will describe the Company.specific types, amounts, prices,
and detailed terms of any of these offered securities.
DEBT SECURITIES
Debt securities are 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 payments on the senior debt were not made.
The Companysenior and subordinated debt will be issued under separate indentures
between Citigroup and a trustee. The trustees under the indentures are banks or
trust companies. 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 or filed as exhibits
to Citigroup's registration statement No. 333-68949, Citigroup's most recent
annual report on Form 10-K, Citigroup's recent quarterly reports on Form 10-Q
and Citigroup's recent current reports on Form 8-K. You can receive copies of
these documents by following the directions on page 6.
2
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 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 would be required
to assume Citigroup's responsibilities for the debt and, so long as the
transaction has not resulted in an event of default, Citigroup would be
released from all liabilities and obligations under the debt securities.
- 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 discharge the debt securities issued under the indentures 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
3
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.
333-68949. You can receive copies of these documents by following the directions
on page 6.
Index warrants are securities that, when exercised by the purchaser at a
time when certain conditions are met, 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.
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, Inc., The Nasdaq-Amex Market
Group or the Chicago Board Options Exchange, Incorporated.
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 certain obligations of Citigroup or
their rights concerning those index warrants. However, certain important changes
in the terms of that security, including changes in the amount or manner of
payment on an index warrant or changes to the exercise times, cannot be made
unless every holder of that security 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 certain 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. 333-68949.
You can receive copies of this document by following the directions on page 6.
4
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.
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 use some of the proceeds to refinance or extend
the maturity of existing debt obligations. Citigroup will use a portion of the
proceeds from the sale of warrants and notes on which certain or all payments of
interest, principal or premium may be linked to an index 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 Inc.
These broker-dealer subsidiaries, including their successors, also expect to
offer and 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 related prospectus supplements
and pricing supplements in connection with these activities.
5
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, Citigroup filed a registration
statement (No. 333-68949) 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 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 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, 1997;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998;
(c) Current Reports on Form 8-K 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,
November 13, 1998, December 15, 1998 and January 25, 1999; 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:
Treasurer
Citigroup Inc.
153 East 53(rd) Street
New York, NY 10043
212-559-1000
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.
6
CITIGROUP INC.
Citigroup's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, Citigroup changed its name from Travelers Group Inc. to
Citigroup Inc. in connection with the merger of Citicorp into a subsidiary of
Citigroup.
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 bank regulatory authorities, thestate
insurance departments of a number of states,
and various capital requirements imposed by securities regulators. The Company
isCertain of Citigroup's
subsidiaries have 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.
The principal office of the CompanyCitigroup is located at 153 East 53rd Street, New
York, NY 10043, and its telephone number is (212) 559-1000.
If you would like
additional information about our Company, please refer to 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 Company 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 a
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.
37
USE OF PROCEEDS AND HEDGING
GENERAL. TheCitigroup will use the proceeds to be received by the Companyit receives from the sale of the
Offered Securities will be usedoffered securities for general corporate purposes, principally toto:
- fund the business of its operating units and tounits;
- fund investments in, or extensions of credit or capital contributions to,
its subsidiariessubsidiaries; and
to- lengthen 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 result of payments
pursuant to such swap or related hedge transactions.from that transaction.
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 ("Indexed Notes") may be used by
the CompanyCitigroup 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 synthetic instruments
relating to such Indexrelevant index or Underlying Assets,underlying assets, as the case may be, and,be.
Citigroup may also, if applicable, use the 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 positions using dynamic hedging techniques and
may take long or short positions in the index, the Underlying Assets,underlying assets, options,
futures contracts, forward contracts, swaps, or other derivative or synthetic
instruments related to the index and such Assets.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 synthetic 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 untilwhen such 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 synthetic 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 by the Companyindexed
notes 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)shows (1) the supplemental consolidated ratio of income
to fixed charges and (ii)(2) the supplemental consolidated ratio of income to
combined fixed charges including preferred stock dividends of the CompanyCitigroup 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
59
EUROPEAN MONETARY UNION
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
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 IIIstill become participating member states after
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).1999.
Stage III includes the introduction of a single currency (the "Euro")the "Euro," which will beis legal tender in
the Participating Member States,participating member states, existing in parallel with the present national
currency of each Participating Member State.participating member state. 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
regulationsPursuant to European Council Regulation No. 2866/98 of the European Union (and, if any, of such Relevant Jurisdiction)
relating to theDecember 31, 1998,
one 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.
6equals:
- - 13.7603 Austrian schillings - 1,936.27 Italian lire
- - 40.3399 Belgian francs - 40.3399 Luxembourg francs
- - 5.94573 Finnish marks - 2.20371 Dutch guilders
- - 6.55957 French francs - 200.482 Portugese escudos
- - 1.95583 German marks - 166.386 Spanish pesetas.
- - 0.787564 Irish pounds
10
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 in or filed as
part ofexhibits to the Registration Statementregistration statement on Form S-3 (No. 333- )333-68949) 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 complete and are subject to, and are
qualified by,debt securities. 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 in this prospectus is 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 TrusteeYork. The
trustee under the Subordinated Debt Indenturesubordinated debt indenture will be The First National Bank of
Chicago under an Indenture dated as of July 17, 1998, as
amended or supplemented from time to time.Chicago.
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,Citigroup, without limitation as toany limit on aggregate principal amount, 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,
at par or at a discount, 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 and 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)11
- 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;
- 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 the"book-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)physical (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 Indenturesdebt 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,Citigroup, and 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"Book-Entry Procedures And Settlement For Debt Securities." 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 thereofof $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. NoYou 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 instrumentstransfer. (SECTION 2.05)
12
BOOK-ENTRY PROCEDURES AND SETTLEMENT FOR DEBT SECURITIES
Most series of transfer (in form satisfactory to the
Company and the Trustee) duly executed by, the registered holder or his attorney
duly authorized in writing (SECTION 2.05).
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, on the Debt Securities (other
than a Global Security)debt securities will be made in the designated currency against
surrender of such Debt Securities at the principal corporate trust officebook-entry securities. Upon issuance,
all book-entry securities of the Trustee in The City of New York. Unless otherwise indicated in the Prospectus
Supplement, payment of any installment of interest on Securities will be made to
the person in whose name such Security is registered at the close of business on
the Record Date for such interest. Unless otherwise indicated in the Prospectus
Supplement, payments of such interest will be made at the principal corporate
trust office of the Trustee in The City of New York, or by a check mailed to the
holder at such holder's registered address (SECTIONS 2.01 AND 5.02).
GLOBAL SECURITIES
The Debt Securitiessame class of a series maywill be issued in whole or in part in the
form ofrepresented by
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 Securitiesfully registered global notes, without interest coupons. Each global
note will be deposited with, or on behalf of, The Depository Trust Company, ("DTC")a
securities depository, and will be 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. DTC will thus be the only registered holder of these debt securities and
will be considered the sole owner of the debt securities for purposes of the
indenture.
Purchasers of debt securities may hold interests in the global notes only
through DTC (if they are a participant in such system) or 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
("participants"). DTC will maintain accounts showing the debt security holdings
of its participants, and these participants will in turn maintain accounts
showing the debt security holdings of their customers (some of whom may
themselves be securities intermediaries holding debt securities for their
customers). Thus, each beneficial owner of a book-entry debt security will hold
that debt security indirectly through a hierarchy of intermediaries, with DTC at
the "top" and the beneficial owner's own securities intermediary at the
"bottom."
The debt 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 debt securities will generally not be
entitled to have the debt securities represented by the global notes registered
in its name and will not be considered the owner under the indenture. In most
cases, a beneficial owner will also not be able to obtain a physical (paper)
certificate evidencing the holder's ownership of debt securities. The book-entry
system for holding debt 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 nomineeglobal note may
exchange the securities for definitive notes (physical (paper) certificates)
only if:
(a) DTC is unwilling or unable to continue as depositary for such global
note 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 notes in registered form.
Unless we indicate otherwise in the applicable prospectus supplement, any
global note that is exchangeable will be exchangeable in whole for definitive
notes in registered form, of like tenor and of an equal aggregate principal
amount, in denominations of $1,000 and whole multiples of $1,000 in excess of
that amount. Definitive notes 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 prospectus supplement, for book-entry debt
securities, references to actions taken by debt security holders will mean
actions taken by DTC upon instructions from its participants, and references to
payments and notices of redemption to debt security holders and notices of
redemption to DTC or another
nomineeas the registered holder of DTC or by DTC or any nomineethe debt securities for
distribution to a successor ofparticipants in accordance with DTC's procedures.
DTC or a nominee of
such successor.
DTC has advised the Company that it is a limited-purposelimited 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
13
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Sectionunder section 17A of
the Securities Exchange Act.Act of 1934. The rules applicable to DTC was createdand its
participants are on file with the SEC.
DTC's management is aware that some computer applications, systems, and the
like for processing dates that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000 problems."
DTC has informed its participants and other members of the financial community
that it has developed and is implementing a program so that its systems, as they
relate to hold
securities for persons that have accounts with DTC ("participants")the timely payment of distributions (including principal and income
payments) to facilitate the clearancesecurityholders, book-entry deliveries, and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accountstrades
within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
Citigroup will not have any responsibility or liability for any aspect of
the participants, thereby eliminating the need for physical movementrecords relating to, or payments made on account 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 ownbeneficial ownership
interests in the book-entry securities heldor for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, on the debt securities (other
than those represented by DTC only through participants.
Uponglobal notes) will be made in the issuance by the Company of a Global Security, DTC will credit, on
its book-entry registration and transfer system, the respective principal
amountsdesignated currency
against surrender of the debt securities represented by such Global Securityat the principal corporate trust office
of the relevant trustee in The City of New York. Payment will be made to the
accountsregistered holder at the close of participants. Ownership of beneficial interests in a Global Securitybusiness on the record date for such payment.
Interest payments will be limitedmade at the principal corporate trust office of the
relevant trustee in The City of New York, or by a check mailed to participants or persons that may hold interests through participants.
Ownership of beneficial intereststhe holder at
his registered address (SECTIONS 2.01 AND 5.02). Payments in Global Securitiesany other manner
will be shown on, andspecified in 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 the
principal of, or premium, if any, or interest on Subordinated Debt Securities,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 must be paid in full before any payment may be made to any holders
of subordinated debt securities. Holders of subordinated debt securities must
return and deliver any payments received by them, other than in a plan of
reorganization or through a defeasance trust as described below, directly to the
holders of Senior Indebtedness until all Senior
14
Indebtedness (including any interest thereon accruing after the commencement of any such
proceedings) shall first beis paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any holders of
Subordinated Debt Securities (except as permitted by the next succeeding
sentence). In such event, any payment or distribution under Subordinated Debt
Securities, whether in cash, securities or other property (other than (i)
Reorganization Securities and (ii) payments made from 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 delivered 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 been 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 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, SECTION 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)(c) any indebtedness between or among the CompanyCitigroup and its affiliates,
including (x) any Junior Subordinated Debt, (y) any Capital
Securities Guarantees and (z) 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
preferred 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:
- 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.
15
"Capital Securities Guarantees" means the guarantees issued by the CompanyCitigroup in
connection withwith:
- 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. The Senior Debt Indenturesenior debt indenture provides that the CompanyCitigroup
will not, and will not permit any Subsidiary (as defined below) 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 be 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 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's- 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 Debt
Indenture and the Subordinated Debt Indenture, the Company has agreedThe 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:
16
- either the CompanyCitigroup is the continuing corporation, or the successor
corporation, (ifif other than the Company)Citigroup, expressly assumes by supplemental
indenture the obligations evidenced by the securities issued pursuant to
the Indentureindenture (in which case, except in the case of such a lease,
the CompanyCitigroup will be discharged therefrom)from its obligations under the indenture) and
(ii)- immediately thereafter,after the Company or the successor corporation (if other than the Company)consummation of such a transaction, there would not
be inany default in the performance of any covenant or condition of the
Indentureindenture (SENIOR DEBT INDENTURE, SECTIONS 5.05 AND 14.01; SUBORDINATED
DEBT INDENTURE, SECTIONS 5.04 AND 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 thataffected. However, no such modification will, without the
consent of the holder of each Debt Security affected thereby, (i)may:
- 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, change the currency in which any such
securities are payable, or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof,of such
securities, without the consent of the holder of each security so
affected,affected; or
(ii)- reduce the aforesaid percentage of securities referred to above of any series 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,outstanding; or
(iii)- modify, without the written consent of the Trustee,trustee, the rights, duties or
immunities of the Trusteetrustee (SECTIONS 13.01 AND 13.02).
13
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 Subordinated Debt Securities.subordinated debt securities
(SUBORDINATED DEBT INDENTURE, 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 (other 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, whether voluntary or not
(SECTION 6.01).
17
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 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 5.06;
SUBORDINATED 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
Securitiesdebt
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 6.02
AND 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 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 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 enforceother than 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, includingdue, a request to the Trusteetrustee by
the holders of not less than 25% in principal amount of the Debt Securitiesdebt securities of
that series outstanding is required for the trustee to take action, and anaction. An offer
satisfactory to the Trusteetrustee of security and indemnity against liabilities
incurred by it in so doingis also required (SECTION 6.07).
DEFEASANCE
SENIOR DEBT INDENTURE. The Senior Debt Indenture provides that, ifIf so specified with respect towhen the Senior Debt Securitiessenior debt securities of a
particular series is 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 indebtedness on all
outstanding Senior Debt Securitiessenior debt securities of such series ("defeasance and
discharge"); or
(b)- 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
("covenant defeasance"), at any time prior to
Maturity, when.
In the Company has deposited with the Trustee, in trust for the
benefitcase 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 additioncovenant defeasance, 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, 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, Citigroup will no
longer be liable for payment and 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 options (SENIOR DEBT INDENTURE, SECTIONS 11.03 AND 11.04).
Under current federal income tax law, the defeasance and discharge
contemplated in the preceding paragraph would 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 Securities18
senior 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 maydefeasance and discharge all of its
obligations (except those set forthand covenant
defeasance provisions contained in the Subordinated Debt Indenture) to
holders of Subordinated Debt Securities of a particular series, which
Subordinated Debt Securities have not already been delivered tosubordinated debt indenture are
substantially the Trusteesame as those described above 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 duesenior debt indenture
(SUBORDINATED DEBT INDENTURE, SECTION 11.01)SECTIONS 11.01, 11.02, 11.03, 11.04 AND 11.05).
The Company, at its option, (i) will be released from its obligations in
respect ofUnder 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 respectsubordinated debt indenture, Citigroup must also deliver 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, in either case, the Company irrevocably deposits with the
Trustee, in trust, cash or U.S. Government Obligations (or a combination
thereof) that, through the payment of interest thereon and principal thereof in
accordance with their terms will provide funds in an amount sufficient 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.
1619
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. 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 of
specified securities or securities indices or specified foreign currencies or
currency indices, or a combination 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 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.
20
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 theiryour own
tax advisors prior tobefore purchasing any acquisition of
Index Warrants.index warrants.
21
BOOK-ENTRY PROCEDURES AND SETTLEMENT FOR INDEX WARRANTS
Subject to the rulesMost series of index warrants will be book-entry securities. Upon issuance,
all book-entry securities of the Warrant Depositary (as defined below) and unless
otherwise specified in the Prospectus Supplement, the Index Warrants offered
therebysame issue will be issued in the form of a single Index Warrant Global Certificate
thatrepresented by one or more
fully registered global certificates. Each global certificate will be deposited
with, or on behalf of, a depositary, The Depository Trust Company, ("DTC"), New York, New York ("Warrant Depositary")a securities depository,
and will be 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 Warrant
18
Depositary or by the Warrant Depositary or any such nominee to a successor of
the Warrant DepositaryDTC or a nominee of such successor.
The Company anticipates thatDTC. DTC will thus be
the following provisionsonly registered holder of these index warrants and will apply to all
depository arrangements.
Uponbe considered the
issuance of an Index Warrant Global Certificate, the Warrant
Depositary will credit, on its book-entry registration and transfer system, the
respective numberssole owner of the individual Index Warrants represented byindex warrants for purposes of the index warrant agreement.
Purchasers of index warrants may hold interests in the global certificates
only through DTC (if they are a participant in 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 Companysystem) or through one
or more agents, by the Company or such agent or agents. Ownership of beneficial
interests ina
securities intermediary--banks, brokerage houses and other institutions that
maintain securities accounts for customers--that has 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 Depositaryaccount with DTC or its
nominee (with respect("participants"). DTC will maintain accounts showing the index warrant
holdings of its participants, and these participants will in turn maintain
accounts showing the index warrant holdings of their customers (some of whom may
themselves be securities intermediaries holding index warrants for their
customers). Thus, each beneficial owner of a book-entry index warrant will hold
that index warrant indirectly through a hierarchy of intermediaries, with DTC at
the "top" and the beneficial owner's own securities intermediary at the
"bottom."
The index warrants 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 index warrants will generally not be
entitled to have the index warrants represented by the global notes registered
in its name and will not be considered the owner under the index warrant
agreement. In most cases, a beneficial interestsowner will also not be able to obtain a
physical (paper) certificate evidencing the holder's ownership of participants) or by participants or persons that may hold interestsindex
warrants. The book-entry system for holding index warrants eliminates the need
for physical movement of certificates and is the system through participants (with respect to beneficial interests of indirect
participants). Thewhich most
publicly traded common stock is held in the United States. However, the laws of
some statesjurisdictions require that certainsome purchasers of securities to take physical
delivery of suchtheir securities in certificateddefinitive form. Such
limits and suchThese laws may impair the
ability to transfer book-entry securities.
A beneficial interestsowner of book-entry securities represented by a global
certificate may exchange the securities for definitive index warrants (physical
(paper) certificates) only if:
(a) DTC is unwilling or unable to continue as depositary for such global
certificate 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 an Index Warrant Global Certificate.
So longits sole discretion decides to allow some or all book-entry
securities to be exchangeable for definitive index warrants in registered
form.
In this prospectus and the prospectus supplement, for book-entry index
warrants, references to actions taken by index warrant holders will mean actions
taken by DTC upon instructions from its participants, and references to payments
and notices of redemption to index warrant holders will mean payments and
notices of redemption to DTC 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
Warrantsindex warrants for
all purposesdistribution to participants in accordance with DTC's procedures.
DTC is a limited purpose trust company organized 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 anylaws of the individual Index Warrants
represented by such Index Warrant Global CertificateState
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 in their names,under section 17A of the Securities Exchange Act of 1934. The
rules applicable to DTC and its participants are on file with the SEC.
DTC's management is aware that some computer applications, systems, and the
like for processing dates that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000 problems."
DTC has informed its participants and other members of the financial community
that it has developed and is implementing a program so that its systems, as they
22
relate to the timely payment of distributions (including principal and income
payments) to securityholders, book-entry deliveries, and settlement of trades
within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
Citigroup and the index warrant agent 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
Certificatebook-entry securities or for
maintaining, supervising or reviewing any records relating to suchthe 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.
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,therein;
- 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 or23
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
20
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.
21warrants.
24
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain generalbriefly summarizes the material terms of Citigroup's preferred
stock. You should read the Company's Preferred Stock to which any Prospectus Supplement may relate. Certainparticular terms of any series of Preferred Stockpreferred stock
offered by any Prospectus SupplementCitigroup which will be described in more detail in any prospectus
supplement relating to such series, together with 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 certainmore detailed 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'sCitigroup's Restated Certificate of Incorporation (as defined below) and the Certificatecertificate of
Designationdesignation relating to each particular series of Preferred Stock which will be filed or incorporated by
reference, as the casepreferred stock for provisions
that may be important to you. The Restated Certificate of Incorporation and the
certificates of designation are filed as an exhibitexhibits to the Registration Statementregistration statement
of which this Prospectusprospectus forms a part at or priorpart. The prospectus supplement will also state
whether any of the terms summarized below do not apply to the timeseries of
the issuance of
such Preferred Stock.preferred stock being offered. For a description of the Company'sCitigroup's outstanding
Preferred
Stock,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's authorized capital stock
consists of 6 billion shares of Common Stock and 30 million shares of Preferred
Stock. The following summary contains a description of certain general terms of
the Company's Common Stock to which any Prospectus Supplement may relate. The
descriptions below of certain provisions of the Company's Common Stock and
Preferred Stock do not purport to be complete and are subject 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.
COMMON STOCK
As of November 30, 1998, the Company had outstanding approximately 2.3
billion shares of its Common Stock. Each holder of Common 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's stockholders. Except as otherwise provided by law, the
holders of shares of Common Stock vote as one class together with the shares of
Series I Preferred Stock, Series J Preferred Stock and Series K Preferred Stock
(as defined below). Holders of Common Stock may not cumulate their votes in the
election of directors, and are entitled to share equally in such dividends as
may be declared by the Board of Directors out of funds legally available
therefor, but only after payment of dividends required to be paid on outstanding
shares of Preferred Stock.
Upon voluntary or involuntary liquidation, dissolution or winding up of the
Company, the holders of the Common Stock share pro rata in the assets remaining
after payments to creditors and provision for the preference of any Preferred
Stock. There are no preemptive or other subscription rights, conversion rights
or redemption or sinking fund provisions with respect to shares of Common Stock.
All of the outstanding shares of Common Stock are fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is Citibank, N.A. The
Common Stock is listed on the New York Stock Exchange, Inc. (the "NYSE") and The
Pacific Exchange, Inc.
PREFERRED STOCK
Under the Company'sCitigroup's Restated Certificate of Incorporation (as amended, the(the "Certificate of
Incorporation"), the Board of Directors of the CompanyCitigroup is authorized to issue
shares of the Preferred Stockpreferred 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 each such
series and to fixthe series;
- the designation, powers, preferences and rights of the shares of each such seriesthe
series; and
- the qualifications, limitations or restrictions thereof,of such series, except as
will beotherwise stated and expressed in the resolution or resolutions providing forCertificate of Incorporation.
Prior to the issue thereof adopted byissuance of any series of preferred stock, 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 series of Preferred Stock, the Board of Directors of the
CompanyCitigroup will adopt resolutions creating and designating suchthe
series as a series of Preferred Stockpreferred stock and suchthe resolutions will be filed in a
Certificatecertificate of Designation (a "Certificate of Designation")designation as an amendment to the Certificate of Incorporation.
As used herein theThe term "Board of Directors of the Company"
means the Board of Directors of the Company andCitigroup" includes any duly authorized
committee thereof.committee.
The rights of holders of the Preferred Stockpreferred stock offered hereby will be subject
to, and may be adversely
affected by the rights of holders of any shares of Preferred Stockpreferred stock that may be
issued in the future. The Board of Directors may cause shares of Preferred Stockpreferred stock
to be issued in public or private transactions for any proper corporate purpose,
which may include issuanceissuances to obtain additional financing in connection with
acquisitions or otherwise, and issuanceissuances to officers, directors and employees of
the CompanyCitigroup and its subsidiaries pursuant to benefit plans or otherwise. Shares of
Preferred Stockpreferred stock issued by the
CompanyCitigroup 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 CompanyCitigroup deemed undesirable by the Board of Directors of
the Company.Citigroup.
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 Stockpreferred stock become entitled
to vote for the election of directors because dividends on the Preferred Stockpreferred stock
are in arrears as described below, Preferred Stockpreferred stock may then be deemed a "class
of voting securities" and a holder of 25% or more of the Preferred Stock (orpreferred stock or a
holder of 5% or more of the Preferred Stockpreferred stock that otherwise exercises a
"controlling influence" over the Company)Citigroup may then be subject to regulationregulated 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 (orpreferred stock or a holder of 10% or more of the
Preferred Stockpreferred stock that otherwise possesses certain "control factors" with respectrelating to
the Company)Citigroup may then be subject to regulationregulated as a "savings and loan holding company" in
accordance with the Home Owner's Loan Act of 1933, as
amended.1933. In addition, at such time, (i)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; (ii)preferred stock;
25
- 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;preferred stock; and
(iii)- any savings and loan holding company generally could not retain in excess
of 5% of the Preferred Stock.preferred stock.
Before exercising its option to redeem any shares of Preferred Stock, the Companypreferred stock, Citigroup
will obtain the approval of the Federal Reserve Board to the extent then
required by applicable law.
No fullThe 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.
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 declaredset forth in the prospectus supplement relating to series of
preferred stock. Dividends will be payable to holders of record of preferred
stock as they appear on the books of Citigroup or, paidif 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 of any series ranking, as tounless full dividends on a parity with or
junior to any other series of Preferred Stock for any period unless full
dividendspreferred stock
that ranks on an equal or senior basis have been or are contemporaneously declared and paid or declared and a
sum sufficient for the payment thereoffunds have
been set apart for such payment on suchfor
- all prior dividend periods of the other series of Preferred Stock for (i) all dividend periods terminatingpreferred stock that pay
dividends on a cumulative basis; 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 (inof the case of aother series of preferred
stock that pay dividends on a noncumulative basis.
Partial dividends declared on shares of preferred stock).
When dividends are not paid in full upon any series of Preferred Stockstock and any other series
of 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 parityan equal basis as to dividends will be declared
pro rata. A pro rata sodeclaration means that the amountratio 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, inwill be the casesame for both series of
noncumulativepreferred 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 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, unlessuntil full dividends on all outstanding shares of any such series of Preferred Stockthe
preferred stock have been
declared and paid or set apart for payment for
- all pastprior dividend periods inif the
case of a series of cumulative preferred stock pays dividends on a
cumulative basis; or
for- the immediately preceding dividend period if the preferred stock pays
dividends on a noncumulative basis.
26
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 case ofapplicable prospectus supplement, 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) willmay be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or uponredeemable at 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 Company had outstanding 1,600,000
shares (evidenced by 8,000,000 depositary shares, each 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. No shares of the Company's 9.50% Cumulative Preferred Stock,
Series L ("Series L Preferred Stock") are outstanding as of the date hereof.
SERIES F PREFERRED STOCK. The Series F Preferred Stock is redeemable,time, in whole or in part, at the
Company's option at any time onof Citigroup or after June 16, 2007
atthe 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.
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
$250 per share, plusany accrued and unpaid dividends. The Series F Preferred Stock provides for cumulative quarterly
dividends atSuch distributions will be made before any
distribution is made on any securities ranking junior relating to liquidation,
including common stock. If the rateliquidation amounts payable relating to the
preferred stock of 6.365% per year, calculated asany series and any other securities ranking on a percentageparity
regarding liquidation rights are not paid in full, the holders of the $250
perpreferred
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 value.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 the Series F Preferred Stock do notshares of preferred stock will have no voting rights, except (i)except:
- as otherwise stated in the prospectus supplement;
- as otherwise stated in the certificate of designation establishing such
series; or
- as required by applicable law.
27
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of the date of this prospectus, Citigroup's authorized capital stock
consists of 6 billion shares of common stock and 30 million shares of preferred
stock. The following briefly summarizes the material terms of Citigroup's common
stock and outstanding preferred stock. You should read the more detailed
provisions of Citigroup's Restated Certificate of Incorporation and the
certificate of designation relating to any series of preferred stock for
provisions that may be important to you.
COMMON STOCK
As of December 31, 1998, Citigroup had outstanding approximately 2.3 billion
shares of its common stock. Each holder of common stock is entitled to one vote
per share for the election of directors and for all other matters to be voted on
by Citigroup's stockholders. Except as otherwise provided by law, (ii)the holders of
shares of common stock vote as one class together with holders of the shares of
the outstanding Series I Preferred Stock, Series J Preferred Stock and Series K
Preferred Stock, which are described below. Holders of common stock may not
cumulate their votes in the election of directors, and are entitled to share
equally in the dividends that may be declared by the Board of Directors, but
only after payment of dividends required to be paid on outstanding shares of
preferred stock.
Upon voluntary or involuntary liquidation, dissolution or winding up of
Citigroup, the holders of the common stock share ratably in the assets remaining
after payments to creditors and provision for the preference of any preferred
stock. There are no preemptive or other subscription rights, conversion rights
or redemption or scheduled installment payment provisions relating to shares of
common stock. All of the outstanding shares of common stock are fully paid and
nonassessable. The transfer agent and registrar for the common stock is
Citibank, N.A. The common stock is listed on The New York Stock Exchange, Inc.
(the "NYSE") and The Pacific Exchange, Inc.
PREFERRED STOCK
The general terms of Citigroup's preferred stock are described above under
certain
circumstances if six quarterly dividends are in arrears and (iii)"Description of Preferred Stock."
As of the date of this prospectus, Citigroup had outstanding the following
series of preferred stock with the following terms:
NUMBER OF REDEMPTION DATE NEXT
SHARES DIVIDENDS PER PRICE PER REDEEMABLE GENERAL
TITLE OF SERIES OUTSTANDING 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
Series I Cumulative Convertible
Preferred Stock................... 140,000(1) $90.00 1,000 October 31, 1999(7) Yes(11)
8.08% Cumulative Preferred Stock,
Series J.......................... 400,000 $40.40 500 Currently(8) Yes(11)
8.40% Cumulative Preferred Stock,
Series K.......................... 500,000 $42.00 500 March 31, 2001 Yes(11)
9.50% Cumulative Preferred Stock,
Series L.......................... -- (2) 9.50% 500 June 30, 2001 Yes(11)
5.864% Cumulative Preferred Stock,
Series M.......................... 800,000 5.864% 250 October 8, 2007 No
Graduated Rate Cumulative Preferred
Stock, Series O................... 625,000 Variable Rate(3) 100 August 15, 1999(9) No
28
NUMBER OF REDEMPTION DATE NEXT
SHARES DIVIDENDS PER PRICE PER REDEEMABLE GENERAL
TITLE OF SERIES OUTSTANDING YEAR SHARE ($) BY CITIGROUP VOTING RIGHTS
- ------------------------------------ ----------- ----------------- ------------ --------------------- -------------
Adjustable Rate Cumulative Preferred
Stock, Series Q................... 700,000 Variable Rate(4) 250 May 31, 1999 No
Adjustable Rate Cumulative Preferred
Stock, Series R................... 400,000 Variable Rate(4) 250 August 31, 1999 No
8.30% Noncumulative Preferred Stock,
Series S.......................... 500,000 8.30% 250 November 15, 1999 No
8 1/2% Noncumulative Preferred
Stock, Series T................... 600,000 8.50% 250 February 15, 2000 No
7 3/4% Cumulative Preferred Stock,
Series U.......................... 500,000 7.75% 250 May 15, 2000 No
Fixed Adjustable Rate Cumulative
Preferred Stock, Series V......... 250,000 Variable Rate(5) 500 February 15, 2006(10) No
Cumulative Adjustable Rate Preferred
Stock, Series Y................... 2,262 Variable Rate(6) 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 above table indicates that the holders of the preferred stock have
no general voting rights, this means that they do not vote on matters submitted
to a
two-thirds vote of all sharesthe common stockholders. However, the holders of Preferred Stock then outstandingthis preferred
stock do have other special voting asrights (1) that are required by law, (2) that
apply if there is a class is requireddefault in paying dividends 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 Certificate of Incorporation 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.listed above.
- ------------------------------
(1) Each share of Series I Preferred Stock is convertible (at the option of the
holder thereof) into 44.60526 shares of Common Stock,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.(2) 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.(3) 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%. AfterBetween
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.(4) 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 up of the
Company, the holder 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 provisionsrelevant part 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.
(5) 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, 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 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.(6) 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 (as defined in
the Certificate of Incorporation) of the 90-day rate for commercial paper
multiplied by the stock's $100,000 per share liquidation value.
The holders(7) Redemption is mandatory.
(8) Called for redemption on February 11, 1999.
29
(9) If not redeemed on August 15, 1999, also redeemable at any time after August
15, 2004 or following a Change in Tax Law.
(10) Prior to February 15, 2006, in the event of a Change in Tax Law, 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.
(11) Holders of shares of Series I Preferred Stock are entitled to 44.60526
votes per share, and holders of shares of Series J, 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. 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 Citigroup at the time
entitled to vote together as a class) on all matters submitted to a vote of
stockholders of Citigroup. In addition, holders of Series I, J and 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 I, J and K Preferred Stock
then outstanding voting separately 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 Y Preferred Stock or (y) alter or change
the provisions ofCitigroup may not amend the Certificate of
Incorporation soto increase the authorized amount of preferred stock or to
authorize any other stock ranking on a parity with the preferred stock
either as to adversely affect the
powers, preferencespayment of dividends or rights of the holders of Series Y Preferred Stock.
32
upon liquidation.
CERTAIN PROVISIONS OF THE COMPANY'SCITIGROUP'S CERTIFICATE OF INCORPORATION AND BY-LAWS
BUSINESS COMBINATIONS. The Certificate of Incorporation 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 Stockvoting stock beneficially owned by any Interested Stockholder (defined therein, generally, asinterested stockholder
(generally, a 25% stockholder), to approve any merger or other Business Combination (as defined therein, which term
includesbusiness
combination (which would include a merger, sale of $25,000,000 of assets, and
similar extraordinary corporate transactions) between, or otherwise involving,
the CompanyCitigroup and any Interested Stockholder,interested stockholder, unless 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 minimum price, form of consideration and procedural requirements are
satisfied.
AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BY-LAWS. Under the
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 theThe 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 Certificate of Incorporation
relating to Business Combinationsbusiness combinations require a vote of the holders of 66 2/3% of
the then outstanding shares of Voting Stock,voting stock, excluding Voting Stockvoting stock held by
Interested Stockholders,interested stockholders, unless 75% of the Board of Directors recommend such
amendment and the directors comprising such 75% would qualify as Continuing
Directors. The Board of Directors, at any meeting, may alter or amend the
By-Laws upon the affirmative vote of at least 66 2/3% of the entire Board of
Directors.
VACANCIES. Vacancies on the Board of Directors resulting from an increase
in the number of directors may be filled by a majority of the Board of Directors
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 Board
of Directors may be filled by a majority of the directors then in office, even
if less than a quorum, andquorum. Any director elected to fill a vacancy that did not
result from increasing the director so electedsize of the Board of Directors shall havehold office for
a term coinciding with the samepredecessor director's remaining term as that of his predecessor.
33term.
30
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 to and qualified in its entirety by
reference todepositary receipts. You should read
the forms of Deposit Agreement and Depositary Receipt relating to
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.
31
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:
(1) all outstanding Depositary Sharesdepositary shares have been redeemed;
or (ii)(2) each share 35
of Preferred Stockpreferred stock has been converted into or exchanged for
Common Stock;common stock; or
(iii)(3) there has been a final distribution in respect of the Preferred Stockpreferred stock in
connection with any liquidation, dissolution or winding up of the CompanyCitigroup
and such distribution has been distributed to the holders of Depositary Shares.depositary
shares.
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,
32
the number of whole or fractional shares of the related series of Preferred Stockpreferred
stock as are represented by such Depositary Shares.depositary shares.
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 faith 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.
3633
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 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. 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. Such 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.
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
34
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.
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. 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 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 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 CompanyCitigroup against certain civil liabilities,
including liabilities under the Securities Act. 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.
35
ERISA MATTERS
By virtue of the Company'sCitigroup's affiliation with certain of its subsidiaries,
including insurance company subsidiaries and the Broker-Dealer Subsidiaries,its broker-dealer subsidiaries,
that provide services to many employee benefit plans, including investment
advisory and asset management services, the CompanyCitigroup 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 respectrelating 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 Securitiesoffered securities will be passed upon for the CompanyCitigroup by
Stephanie B. Mudick, Esq., General Counsel-Corporate Law of the Company,Citigroup, 153 East
53(rd) Street, 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. Ms. Mudick, General Counsel-Corporate Law and an
Assistant Secretary of the Company,Citigroup, 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.Citigroup's common stock. Certain legal matters will be passed upon for the
underwriters or agents by Dewey Ballantine LLP, New York, New York, or by
counsel to be identified in the applicable Prospectus Supplement.prospectus supplement. 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 Group Inc.
("Travelers")
as of December 31, 1997 and 1996, 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, 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. Those 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 toregarding 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.
36
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, included therein and
incorporated herein by reference, whichreference. This report states that KPMG Peat Marwick LLP did not audit
the Salomon Financials (as defined above) and that their opinion with respect toregarding any amounts derived from
the Salomon Financials is based on the report of Arthur Andersen LLP. Generally
accepted accounting principles proscribe giving effect to a consummated business
combination accounted for by the pooling of interests method in financial
statements that do not include the date of consummation. 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 herein in reliance upon such reports givenand upon the authority of said
firms 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 Company37
The information in this prospectus supplement is subject tonot complete and may be
changed. Citigroup Inc. may not sell these securities until 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 haveregistration
statement filed with the SEC a Registration Statement on Form S-3 (the
"Registration Statement," which term shall include all amendments, exhibits,
annexesSecurities and schedules thereto) pursuantExchange Commission is effective. This
prospectus supplement is not an offer to the Securities Act of 1933, as
amended (the "Securities Act"), with respectsell these securities and it is not
soliciting an offer 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.
40
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
orbuy these securities in any other subsequently filed document which alsostate where the offer or sale
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.
41permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 15, 1998FEBRUARY 10, 1999
PROSPECTUS SUPPLEMENT
(To Prospectus Datedprospectus dated , 1998)
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. WE 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.
1999)
$6,000,000,000
[LOGO]
MEDIUM-TERM SENIOR NOTES, SERIES A
MEDIUM-TERM SUBORDINATED NOTES, SERIES A
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 and $5,992,500,000 after paying the agent commissions of
between $7,500,000 and $180,000,000.
MATURITY: 9 months or more from the
date of
issue.
INTEREST RATES: Fixed, Floating,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 Costzero coupon.
date of Funds Rate
- Federal Funds Rateissue.
INDEXED NOTES: Payments of interest or
RANKING: Senior notes are part of our
principal may be linked to the
senior indebtedness; and
price of one or more securities,
Subordinated notes are part of
currencies, commodities or our
subordinated indebtedness.
other goods.
PAYMENT DATES: Generally semi-annually for Fixed Rate
Notes.
Interest on Floating Rate or Indexed
NotesREDEMPTION: 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 "Description
permit or repurchasable by
us;
- May be repayable at your option;
- May be renewable at your optionrequire redemption of
the Notes" and the pricing or
extendible at our option;
- Interest rate may be resetrepurchase at our option from timeor
supplement for features that
your option. 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 certainCertain indexation 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.
, 1999
SALOMON SMITH BARNEY
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
-----
Risk Factors......................................................................... S-3
Important Currency Information....................................................... S-3S-6
Description of Notes................................................................. S-3
Currency Risks....................................................................... S-25
Risks of Indexed Notes............................................................... S-26the Notes............................................................. S-7
Certain United States Federal Income Tax Considerations.............................. S-27S-32
Plan of Distribution................................................................. S-33S-39
Legal Matters........................................................................ S-40
PROSPECTUS
Prospectus Summary..................................................................... 2
Citigroup Inc.......................................................................... 7
Use of Proceeds and Hedging............................................................ 48
Ratio of Income to Fixed Charges and Ratio of Income to Combined Fixed Charges
Including
Preferred Stock Dividends.......................................................... 59
European Monetary Union................................................................ 610
Description of Debt Securities......................................................... 711
Description of Index Warrants.......................................................... 1720
Description of Preferred Stock......................................................... 2225
Description of Capital Stock........................................................... 2428
Description of Depositary Shares....................................................... 3431
Plan of Distribution................................................................... 3734
ERISA Matters.......................................................................... 3836
Legal Matters.......................................................................... 3936
Experts................................................................................ 39
Available Information.................................................................. 40
Incorporation of Certain Documents by Reference........................................ 4136
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IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each Note (as defined below) in the
currency designated by Citigroup Inc. (formerly Travelers Group Inc.)
("Citigroup" or the "Company") for such Note (the "Specified Currency"). If
requested by a prospective purchaser of a Note having a Specified Currency other
than U.S. dollars, the Agent may at its discretion arrange for the exchange of
U.S. dollars into such Specified Currency to enable the purchaser to pay for
such Note. Each such exchange will be made by the Agent on such terms and
subject to such conditions, limitations and charges as the Agent may from time
to time establish in accordance with its regular foreign exchange practice. All
costs of exchange will be borne by the purchaser.
References herein to "U.S. dollars," "U.S.$," "dollar" or "$" are to the
lawful currency of the United States.
DESCRIPTION OF NOTES
The following description of the particular terms of the Medium-Term Senior
Notes, Series A (the "Senior Notes") and Medium-Term Subordinated Notes, Series
A (the "Subordinated Notes" and, together with the Senior Notes, the "Notes")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made. The pricing
supplement (the "Pricing Supplement") for each offering of Notes will contain
the specific information and terms for that offering. The Pricing Supplement may
also add, update or change information contained in the Prospectus and this
Prospectus Supplement. It is important for you to consider the information
contained in the Prospectus, this Prospectus Supplement and the Pricing
Supplement in making your investment decision.
GENERAL
The Company's Senior Notes are a series of Senior Debt Securities issued
under the Senior Debt Indenture, and the Company's Subordinated Notes are a
series of Subordinated Debt Securities issued under the Subordinated Debt
Indenture. At the date of this Prospectus Supplement, the Notes offered pursuant
to this Prospectus Supplement are limited to an aggregate initial public
offering price or purchase price of up to $6,000,000,000 or the equivalent
thereof in one or more foreign or composite currencies, which amount is subject
to reduction as a result of the sale of other securities under the registration
statement of which this Prospectus Supplement and the accompanying Prospectus
form a part or under a registration statement to which this Prospectus
Supplement and the accompanying Prospectus relate. The amount of Notes sold of
either series will reduce the amount of Notes of the other series that may be
sold. The Company reserves the right to withdraw, cancel or modify the offer
made hereby without notice. The aggregate amount of Notes may be increased from
time to time to such larger amount as may be authorized by the Company. The U.S.
dollar equivalent of the public offering price or purchase price of a Note
having a Specified Currency other than U.S. dollars will be determined on the
basis of 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 Currency on the applicable
issue date. Such determination will be made by the Company or its agent, as
exchange rate agent for the applicable series of Notes (the "Exchange Rate
Agent").
The Senior Notes will constitute part of the Senior Indebtedness of the
Company and will rank PARI PASSU with all other unsecured debt of the Company
except subordinated debt. The Subordinated 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, to all Senior Indebtedness of the Company. See
"Description of Debt Securities--Subordinated Debt" in the Prospectus. On a
consolidated basis, after giving effect to
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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
Indebtedness of the Company outstanding was approximately $78.1 billion,
consisting of the following: approximately $42.5 billion of term debt,
approximately $21.2 billion of commercial paper and approximately $14.4 billion
of other short-term borrowings.
The Notes will be issued in fully registered form only, without coupons.
Each Note will be issued initially as either a Global Security registered in the
name of a nominee of The Depository Trust Company, as Depositary, or such other
depositary as is stated in the Pricing Supplement, (a "Book-Entry Note") or, if
specified in the applicable pricing supplement to this Prospectus Supplement (a
"Pricing Supplement"), a certificate issued in temporary or definitive form (a
"Certificated Note"). Except as set forth in the Prospectus under "Description
of Debt Securities--Global Securities," Book-Entry Notes will not be issuable as
Certificated Notes. See "Book-Entry System" below.
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes denominated in U.S. dollars will be $1,000 and
any larger amount that is an integral multiple of $1,000, and the authorized
denominations of Notes having a Specified Currency other than U.S. dollars will
be the approximate equivalents thereof in the Specified Currency.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will mature on 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"),
which maturity date may be subject to extension 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, prior to its Stated Maturity. Each Note
having a Specified Currency of Pounds Sterling will mature in compliance with
such regulations as the Bank of England may promulgate from time to time.
The Pricing Supplement relating to a Note will describe the following terms:
(i) the Specified Currency for such Note; (ii) whether such Note bears interest
at a fixed rate (a "Fixed Rate Note") (which rate may be zero in the case of
certain OID Notes, as defined below), a floating rate (a "Floating Rate Note"),
and/or is an amortizing note on which a portion or all the principal amount is
payable prior to Stated Maturity in accordance with a schedule, by application
of a formula, or by reference to an index (an "Amortizing Note") and/or is an
indexed note (an "Indexed Note") on which the amount of any interest payment, in
the case of an Indexed Rate Note (as defined below), and/or the principal amount
payable at maturity, in the case of an Indexed Principal Note (as defined
below), 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
(expressed as a percentage of the aggregate principal amount or face amount
thereof) at which such Note will be issued (the "Issue Price"); (iv) the date on
which such Note will be issued (the "Original Issue Date"); (v) the date of the
Stated Maturity; (vi) if such Note is a Fixed Rate Note, the rate per annum at
which such Note will bear interest, if any, and whether and the manner in which
such rate may be changed prior to its Stated Maturity; (vii) if such Note is a
Floating Rate Note, the Base Rate, the Initial Interest Rate, the Interest Reset
Period or the Interest Reset Dates, the Interest Payment Dates, and, if
applicable, the Index Maturity, the Maximum Interest Rate, the Minimum Interest
Rate, the Spread or Spread Multiplier (all as defined below), and any other
terms relating to the particular method of calculating the interest rate for
such Note and whether and the manner in which such Spread or Spread Multiplier
may be changed prior to Stated Maturity; (viii) whether such Note is an OID Note
(as defined below); (ix) if such Note is an Amortizing Note, the terms for
repayment prior to Stated Maturity; (x) if such Note is an Indexed Note, in the
case of an 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, its
Face Amount (as defined below) and the manner in which the principal amount
payable at Stated Maturity will be determined; (xi) whether such Note may be
redeemed at the option of the Company, or repaid at the option of the Holder,
prior to Stated
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Maturity as described under "Optional Redemption, Repayment and Repurchase"
below and, if so, the provisions relating to such redemption or repayment,
including, in the case of an OID Note or Indexed Note, the information necessary
to determine the amount due upon redemption or repayment; (xii) whether such
Note is subject to an optional extension beyond its Stated Maturity as described
under "Extension of Maturity" below; (xiii) whether such Note will be
represented by a Global Security or a certificate issued in definitive form;
(xiv) certain special United States federal income tax consequences of the
purchase, ownership and disposition of certain Notes, if any; (xv) whether such
Note is a Renewable Note (as defined below), and, if so, the specific terms
thereof; (xvi) the use of proceeds, if such use materially differs from that
disclosed in the accompanying Prospectus; and (xvii) any other terms of such
Note provided in the accompanying Prospectus to be set forth in a Pricing
Supplement or otherwise not inconsistent with the provisions of the Indenture
under which such Note will be issued.
"Business Day" with respect to any Note means any day, other than a Saturday
or Sunday, that is (i) not a day on which banking institutions are authorized or
required by law or regulation to be closed in (a) The City of New York or (b) if
the Specified Currency 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, shall be Brussels, Belgium) and (ii) if 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 Note are transacted in the London interbank market.
"OID Note" is defined under "Certain United States Federal Income Tax
Considerations--United States Holders--Original Issue Discount."
A "basis point" or "bp" equals one one-hundredth of a percentage point.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and any premium and interest on each Note are payable by
the Company in the Specified Currency for such Note. If the Specified Currency
for a Note is other than U.S. dollars, the Company will (unless otherwise
specified in the applicable Pricing Supplement) arrange to convert all payments
in respect of such Note into U.S. dollars in the manner described in the
following paragraph. The Holder of a Note having a Specified Currency other than
U.S. dollars may (if the applicable Pricing Supplement and such Note so
indicate) elect to receive all payments in respect of such Note in the Specified
Currency by delivery of a written notice to the Trustee for such Note not later
than fifteen calendar days prior to the applicable payment date, except under
the circumstances described under "Currency Risks--Payment Currency" below. Such
election will remain in effect until revoked by written notice to such Trustee
received not later than fifteen calendar days prior to the applicable payment
date and 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,
the amount of any U.S. dollar payment in respect of such Note will be determined
by the Exchange Rate Agent based on the highest firm bid quotation expressed in
U.S. dollars received by the Exchange Rate Agent at approximately 11:00 a.m.,
New York City time, on the second Business Day preceding the applicable payment
date (or, if no such rate is quoted on such date, the last date on which such
rate was quoted), from three (or, if three are not available, then two)
recognized foreign exchange dealers in The City of New York (one or more of
which may be the Agent (as defined herein) and another of which may be the
Exchange Rate Agent) selected by the Exchange Rate Agent, for the purchase by
the quoting dealer, for settlement on such payment date, of the aggregate amount
of such Specified Currency payable on such payment date in respect of all Notes
denominated in such Specified Currency. All currency exchange costs will be
borne by the Holders of such Notes by deductions from such payments. If no such
bid quotations are available, such payments will be made in such Specified
Currency, unless such
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Specified Currency is unavailable due to the imposition of exchange controls or
to other circumstances beyond the Company's control, in which case such payments
will be made as described under "Currency Risks--Payment Currency" below.
Unless otherwise specified in the applicable Pricing Supplement, U.S. dollar
payments of interest on Notes (other than interest payable at Stated Maturity)
will be made, except as provided below, by check mailed to the registered
Holders of such Notes (which, in the case of Global Securities representing
Book-Entry Notes, will be a nominee of the Depositary); PROVIDED, HOWEVER, that,
in the case of a Note issued between a Regular Record Date and the related
Interest Payment Date, unless otherwise specified in the related Pricing
Supplement, interest for the period beginning on the Original Issue Date for
such Note and ending on such Interest Payment Date shall be paid on the next
succeeding Interest Payment Date to the registered Holder of such Note on the
related Regular Record Date. A Holder of $10,000,000 (or the equivalent thereof
in a Specified Currency other than U.S. dollars) or more in aggregate principal
amount of Notes of like tenor and term shall be entitled to receive such U.S.
dollar payments by wire transfer of immediately available funds, but only if
appropriate wire transfer instructions have been received in writing by the
Trustee for such Notes 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. Unless otherwise specified in the applicable Pricing
Supplement, principal and any premium and interest payable at the Stated
Maturity of a Note will be paid in immediately available funds upon surrender of
such Note at the corporate trust office or agency of the Trustee for such Note
in The City of New York.
Unless otherwise specified in this Prospectus Supplement or the applicable
Pricing Supplement, any payment required to be made in respect of a Note 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, but may be made on the next succeeding
Business Day with the same force and effect as if made on such date, and no
additional interest shall accrue as a result of such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any OID Note (other than an Indexed Note (as defined herein)) 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, the amount of principal due and payable with respect to such
Note shall be limited to the aggregate principal amount of such Note multiplied
by the sum of its Issue Price (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the date of
issue to the date of declaration, which amortization shall be calculated using
the "interest method" (computed in accordance with generally accepted accounting
principles in effect on the date of declaration).
The Regular Record Date with respect to any Interest Payment Date for a
Floating Rate Note, Fixed Rate Note or an Indexed Rate Note shall be the date
(whether or not a Business Day) fifteen calendar days immediately preceding such
Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date, or
from the last Interest Payment Date to which interest has been paid or duly
provided for, at the rate per annum stated in the applicable Pricing Supplement
until the principal amount thereof is paid or made available for payment, except
as described below under "Subsequent Interest Periods" and "Extension of
Maturity," and except that if so specified in the applicable Pricing Supplement,
the rate of interest payable on certain Fixed Rate Notes may be subject to
adjustment from time to time as described in such Pricing Supplement. Unless
otherwise set forth in the applicable Pricing Supplement, interest on each Fixed
Rate Note will be payable semiannually in arrears on such dates as set forth in
the applicable Pricing
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Supplement (each such day being an "Interest Payment Date") and at Stated
Maturity. Unless otherwise specified in the applicable Pricing Supplement, if an
Interest Payment Date with respect to any Fixed Rate Note would otherwise be a
day that is not a Business Day, such Interest Payment Date shall not be
postponed; PROVIDED, HOWEVER, that any payment required to be made in respect of
such Note 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, but may be made on the
next succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. However, if with respect to any Fixed Rate Note, "Accrue to Pay" is
specified in the applicable Pricing Supplement, and any Interest Payment Date
with respect to such Fixed Rate Note would otherwise be a day that is not a
Business Day, such Interest Payment Date shall be postponed to the next
succeeding Business Day. Each payment of interest in respect of an Interest
Payment Date shall include interest accrued through the day before such Interest
Payment Date. Unless otherwise specified in the applicable Pricing Supplement,
interest on Fixed 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 Date to, but not including, the first Interest Reset
Date (as defined below) (the period hereinafter called the "Initial Interest
Period"), each Floating Rate Note will bear interest at the Initial Interest
Rate set forth, or otherwise described, in the Pricing Supplement. From each
Interest Reset Date to, but not including, the following Interest Reset Date
(each such period, an "Interest Reset Period," and together with the Initial
Interest Period, the "Interest Periods"), the interest rate for each Floating
Rate Note will be determined by reference to an interest rate basis (the "Base
Rate"), plus or minus the Spread (as defined below), if any, or multiplied by
the Spread Multiplier (as defined below), if any. The "Spread" is the number of
basis points that may be specified in the applicable Pricing Supplement as being
applicable to such Note, and the "Spread Multiplier" is the percentage that may
be specified in the applicable Pricing Supplement as being applicable to such
Note, except in each case as described below under "Subsequent Interest Periods"
and "Extension of Maturity," and except that if so specified in the applicable
Pricing Supplement, the Spread or Spread Multiplier on certain Floating Rate
Notes may be subject to adjustment from time to time as described in such
Pricing Supplement. The applicable Pricing Supplement will designate one of the
following Base Rates as applicable to a Floating Rate Note: (i) LIBOR (a "LIBOR
Note"), (ii) the Commercial Paper Rate (a "Commercial Paper Rate Note"), (iii)
the Treasury Rate (a "Treasury Rate Note"), (iv) the Federal Funds Rate (a
"Federal Funds Rate Note"), (v) the CD Rate (a "CD Rate Note"), (vi) the Prime
Rate (a "Prime Rate Note"), (vii) the J.J. Kenny Rate (a "J.J. Kenny Rate
Note"), (viii) the Eleventh District Cost of Funds Rate (an "Eleventh District
Cost of Funds Rate Note"), or (ix) such other Base Rate as is set forth in such
Pricing Supplement and in such Note. The "Index Maturity" for any Floating Rate
Note is the period of maturity of the instrument or obligation from which the
Base 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" means the daily statistical release entitled "Composite 3:30 p.m.
Quotations for U.S. Government Securities" published by the Federal Reserve Bank
of New York.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the
rate at which interest may accrue during any interest period ("Maximum Interest
Rate") and (ii) a minimum limitation, or floor, on the rate at which interest
may accrue during any interest period ("Minimum Interest Rate"). In addition to
any Maximum Interest Rate that may be applicable to any Floating Rate Note, the
interest rate on a Floating Rate Note will in no event be higher than the
maximum rate permitted by applicable law, as the same may be
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modified by United States law of general application. The Notes will be governed
by the law of the State of New York and, under such law as of the date of this
Prospectus Supplement, the maximum rate of interest under provisions of the
penal law, with certain 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 Company will appoint and enter into agreements with agents (each a
"Calculation Agent") to calculate interest rates on Floating Rate Notes. Unless
otherwise specified in a Pricing Supplement, The Bank of New York will be the
Calculation Agent for each Senior Note that is a Floating Rate Note and The
First National Bank of Chicago will be the Calculation Agent for each
Subordinated Note that is a Floating Rate Note. All determinations of interest
by the Calculation Agent shall, in the absence of manifest error, be conclusive
for all purposes and binding on the holders of the Floating Rate Notes.
The interest rate on each Floating Rate Note will be 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. Unless otherwise specified in the applicable Pricing Supplement, the
Interest Reset Dates will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week; in the case of
Treasury Rate Notes that reset weekly, Tuesday of each week (except as provided
below under "Treasury Rate Notes"); in the case of Floating Rate Notes that
reset monthly, the third Wednesday of each month (with the exception of monthly
reset Eleventh District Cost of Funds Rate Notes, which reset on the first
calendar day of each month); in the case of Floating Rate Notes that reset
quarterly, the third Wednesday of March, June, September and December of each
year; in the case of Floating Rate Notes that reset semiannually, the third
Wednesday of each of two months of each year specified in the applicable Pricing
Supplement; and, in the case of Floating Rate Notes that reset annually, the
third Wednesday of one month of each year specified in the applicable Pricing
Supplement. If an Interest Reset Date for any Floating Rate Note would otherwise
be a day that is not a Business Day, such Interest Reset 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
Reset Date shall be the immediately preceding Business Day. If an auction of
direct obligations of United States Treasury Bills ("Treasury bills") falls on a
day that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset
Date shall be the succeeding Business Day.
Unless otherwise specified in the applicable Pricing Supplement and except
as set forth in the next sentence, the rate of interest that goes into effect on
any Interest Reset Date shall be determined on a date (the "Rate Determination
Date") preceding such 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, interest
payable in respect of Floating Rate Notes shall be the interest accrued from and
including the Original 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 of 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
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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 Note with more than one Interest Reset Date
during any period for which accrued interest is being calculated, accrued
interest shall 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) by an accrued
interest factor. Such 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, unless otherwise specified in the applicable Pricing Supplement, by
dividing the interest rate in effect on such day by 360 ("Actual over 360"), in
the case of LIBOR Notes, Prime Rate Notes, J.J. Kenny Rate Notes, Eleventh
District Cost of Funds Rate Notes, Commercial Paper Rate Notes, Federal Funds
Rate Notes and CD Rate Notes, or by the actual number of days in the year
("Actual over Actual"), in the case of Treasury Rate Notes. For purposes of
making the foregoing calculation, the interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on such date. With respect to
all other Floating Rate Notes, accrued interest shall 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) by the interest
rate in effect during the period for which accrued interest is being calculated,
and multiplying that product 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 LIBOR Notes, Prime Rate Notes, J.J. Kenny Rate Notes, Eleventh District
Cost of Funds Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes
and CD Rate Notes, or by the actual number of days in the year, in the case of
Treasury Rate Notes.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on a Floating
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
all currency amounts used in or resulting from such calculation on Floating Rate
Notes will be rounded to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Floating Rate Notes
that reset daily, weekly or monthly (other than Eleventh District Cost of Funds
Rate Notes), on the third Wednesday of each month or on the third Wednesday of
March, June, September and December of each year, as specified in the applicable
Pricing Supplement or, in the case of Eleventh District Cost of Funds Rate
Notes, on the first calendar day of each March, June, September and December, as
specified in the applicable Pricing Supplement; in the case of Floating Rate
Notes that reset quarterly, on the third Wednesday of March, June, September,
and December of each year; in the case of Floating Rate Notes that reset
semiannually, on the third Wednesday of each of two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, on the third Wednesday of one month of each year
specified in the applicable Pricing Supplement, and in each case at Maturity
(each such day being an "Interest Payment Date"). If an Interest Payment Date
with respect to any Floating Rate Note would otherwise be a day that is not a
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 shall not be postponed; PROVIDED, FURTHER, that 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, but may be
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made on the next succeeding Business Day with the same force and effect as if
made on such dates, and no additional interest shall accrue as a result of such
delayed payment.
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent for such Note 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 to such Floating Rate Note.
CD RATE NOTES
Each CD Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CD
Rate" for each Interest Reset Period shall be the rate as of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated in the applicable Pricing Supplement as published in
H.15(519) under the heading "CDs (Secondary Market)." In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the Calculation
Date (as defined below) pertaining to such CD Rate Determination Date, then the
"CD Rate" for such Interest Reset Period will be the rate on such CD Rate
Determination Date for negotiable certificates of deposit of the Index Maturity
designated in the applicable Pricing Supplement as published in Composite
Quotations under the heading "Certificates of Deposit." If by 3:00 p.m., New
York City time, on such Calculation Date such rate is not yet published in
either H.15(519) or Composite Quotations, 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 Date of three
leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by the Calculation Agent for such CD Rate Note for
negotiable certificates of deposit of major United States money center banks of
the highest credit standing (in the market for negotiable certificates of
deposit) with a remaining maturity closest to the Index Maturity designated in
the Pricing Supplement in a denomination of $5,000,000; PROVIDED, HOWEVER, that
if the dealers selected as aforesaid by such Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "CD Rate" for such Interest
Reset Period will be the same as the CD Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
The "Calculation Date" pertaining to any CD Rate Determination Date shall be
the tenth calendar day after such CD Rate Determination Date or, if such day is
not a Business Day, the next succeeding Business Day.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread or Spread Multiplier, if any, specified in such Note and in
the applicable Pricing Supplement.
Unless otherwise specified in 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 of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper
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having the Index Maturity specified in the applicable Pricing Supplement, as
such rate shall be published in H.15(519) under the heading "Commercial Paper."
In the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as defined below) pertaining to such Commercial
Paper Rate Determination Date, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield on such Commercial Paper
Rate Determination Date of the rate for commercial paper of the specified Index
Maturity as published in Composite Quotations under the heading "Commercial
Paper." If by 3:00 p.m., New York City time, on such Calculation Date such rate
is not yet published in either H.15(519) or Composite Quotations, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money 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 Date of three leading
dealers of commercial paper in The City of New York selected by the Calculation
Agent for such Commercial Paper Rate Note for commercial paper of the specified
Index Maturity placed for an industrial issuer whose bonds are rated "AA" or the
equivalent by a nationally recognized rating agency; PROVIDED, HOWEVER, that if
the dealers selected as aforesaid by such Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "Commercial Paper Rate" for
such Interest Reset Period will be the same as the Commercial Paper Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the Initial Interest Rate).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
DX360
Money Market Yield = ----------- X100
360-(DXM)
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 Paper 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 NOTES
Each Federal Funds Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and the Spread or Spread Multiplier, if any, specified in such Note and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" for each Interest Reset Period shall 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)." In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date (as
defined below) pertaining to such Federal Funds Rate Determination Date, the
"Federal Funds Rate" for such Interest Reset Period shall be the rate on such
Federal Funds Rate Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If by 3:00 p.m., New York City time,
on such Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, then the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date made
publicly available by the Federal Reserve Bank of New York which is equivalent
to the rate which appears in H.15(519) under the heading "Federal Funds
(Effective);" PROVIDED, HOWEVER, that if such rate 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, the "Federal Funds Rate" for such
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Interest Reset Period will be the same as the Federal Funds Rate in effect for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate). In the case of a Federal
Funds Rate Note that resets daily, the interest rate on such Note for the period
from and including a Monday to but excluding the succeeding Monday will be reset
by the Calculation Agent for such Note on such second Monday (or, if not a
Business Day, on the next succeeding Business Day) to a rate equal to the
average of the Federal Funds Rates in effect with respect to 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 NOTES
Each LIBOR Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to LIBOR and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
"LIBOR" for each Interest Reset Period will be determined by the Calculation
Agent for such LIBOR Notes as follows:
(i) On the second London Banking Day prior to the Interest Reset Date for
such Interest Reset Period (a "LIBOR Determination Date"), the
Calculation Agent for such LIBOR Note will determine the offered rates
for deposits in the Specified Currency for the period of the Index
Maturity specified in the applicable Pricing Supplement, commencing on
such Interest Reset Date, which appear on the Designated LIBOR Page at
approximately 11:00 a.m., London time, on such LIBOR Determination Date.
If "LIBOR Telerate" is designated in the applicable Pricing Supplement,
"Designated LIBOR Page" means the display designated as page "3750" on
the Bridge Telerate Service (or such other page as may replace page
"3750" on such service or such other service as may be nominated by the
British Bankers' Association for the purpose of displaying 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. If "LIBOR Reuters" is designated in the applicable
Pricing Supplement, "Designated LIBOR Page" means the display designated
as page "LIBO" on the Reuters Monitor Money Rates Service (or such other
page as may replace the LIBO page on such service or such other service
as may be nominated by the British Bankers' Association for the purpose
of displaying 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) If LIBOR cannot be determined as above (either because the Designated
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 Agent for such LIBOR Note
will request the principal London offices of each of four major banks
in the London interbank market selected by such Calculation Agent to
provide such Calculation Agent with its 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
such LIBOR Determination Date and in a principal amount equal to an
amount of not less than $1,000,000 or the approximate equivalent
thereof in the Specified Currency that is representative of a single
transaction in such market at such time. If at least two such
quotations are provided, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such quotations. If fewer than two such
quotations are provided, "LIBOR" for such Interest Reset Period will be
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the arithmetic mean of rates quoted by three major banks in The City of
New York selected by the Calculation Agent for such LIBOR Note at
approximately 11:00 a.m., New York City time, on such LIBOR
Determination Date for loans in the Specified Currency to leading
European banks, for the period of the specified Index Maturity,
commencing on such Interest Reset Date, and in a principal amount equal
to an amount of not less than $1,000,000 or the approximate equivalent
thereof in the Specified Currency that is representative of a single
transaction in such market at such time; PROVIDED, HOWEVER, that if
fewer than three banks selected as aforesaid by such Calculation Agent
are quoting rates as mentioned in this sentence, "LIBOR" for such
Interest Reset Period will be the same as LIBOR for the immediately
preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the Initial Interest Rate).
TREASURY RATE NOTES
Each Treasury Rate Note will bear interest for each Interest Reset Period at
the interest rate calculated with reference to the Treasury Rate and the Spread
or Spread Multiplier, if any, specified in such Note and in the applicable
Pricing Supplement.
Unless "Constant Maturity" is specified or unless otherwise specified in the
applicable Pricing Supplement, the "Treasury Rate" for each Interest Reset
Period will be the rate for the auction held on the Treasury Rate Determination
Date (as defined below) for such Interest Reset Period of direct obligations of
the United States ("Treasury securities") having the Index Maturity specified in
the applicable Pricing Supplement, as such rate shall be published in H.15(519)
under the heading "U.S. Government Securities-Treasury bills-auction average
(investment)" or, in the event that such rate is not published prior to 3:00
p.m., New York City time, on the Calculation Date (as defined below) pertaining
to such Treasury Rate Determination Date, the auction average rate (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 that the
results of the auction of Treasury securities having the specified Index
Maturity are not published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such auction is held on such
Treasury Rate Determination Date, then the "Treasury Rate" for such Interest
Reset Period shall be calculated by the Calculation Agent for such Treasury Rate
Note and shall be a yield to maturity (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of 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 Agent are not quoting bid
rates as mentioned in this sentence, then the "Treasury Rate" for such Interest
Reset Period will be the same as the Treasury Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
The "Treasury Rate Determination Date" for each Interest Reset Period will
be the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury 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 which 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 Date pertaining to the
Interest Reset Period commencing in the next succeeding week. If an auction date
shall fall on any day that would otherwise be an Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
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If "Constant Maturity" is specified in the applicable Pricing Supplement,
the "Treasury Rate" for each Interest Reset Period will be the rate that is set
forth in the Federal Reserve Board publication H.15(519) opposite the caption
"U.S. Government/Securities/Treasury Constant Maturities/" in the Index Maturity
with respect to the applicable Constant Maturity Treasury Rate Determination
Date (as defined below). If the H.15(519) is not published, the Treasury Rate
shall be the rate that was set forth on Telerate Page 7055, or its successor
page (as determined by the Calculation Agent), on the applicable Constant
Maturity Treasury Rate Determination Date opposite the applicable Index
Maturity. If no such rate is set forth, 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. If the Federal Reserve Board does not provide
such information, then the Treasury Rate for such Interest Reset Date will be
the arithmetic mean of bid-side quotations, expressed in terms of yield,
reported by three leading U.S. government securities dealers (one or more of
which may be an Agent (as defined herein)), according to their written records,
as of 3:00 p.m. (New York City time) on the Constant Maturity Treasury Rate
Determination Date, for the noncallable U.S. Treasury Note that is nearest in
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 maturity to the Index
Maturity, but not more than exactly the Index Maturity. The Calculation Agent
shall calculate the Treasury Rate by interpolating to the Index Maturity based
on an actual/actual date count basis, the yield on the two Treasury Notes
selected. If the Calculation Agent cannot obtain three such adjusted quotations,
the Treasury Rate for such Interest Reset Date will be the arithmetic mean of
all such quotations, or if only one such quotation is obtained, such quotation,
obtained by the Calculation Agent. In all events, the Calculation Agent shall
continue polling dealers until at least one adjusted yield quotation can be
determined.
"The Constant Maturity Treasury Rate Determination Date" shall be the tenth
Business Day prior to the Interest Reset Date for the applicable Interest Reset
Period.
The Treasury constant maturity rate for a Treasury security maturity (the
"CMT Rate") as published in H.15(519) as of any Business Day is intended to be
indicative of the yield of a U.S. Treasury security having as of such Business
Day a remaining term to maturity equivalent to such maturity. The CMT Rate as of
any Business 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
Agents or other affiliates of the Company. 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 Notes will bear interest at the interest rates (calculated with
reference to the Prime Rate and the Spread or Spread Multiplier, if any)
specified in the Prime Rate Notes and in the applicable Pricing Supplement.
S-14
Unless otherwise indicated in the applicable Pricing Supplement, the "Prime
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such Prime Rate Note as of the second Business Day prior to the Interest
Reset Date for such Interest Reset Period (a "Prime Rate Determination Date")
and shall be the rate made available and subsequently published on such date in
H.15(519) under the heading "Bank Prime Loan." In the event that such rate has
not been made available prior to 3:00 P.M., New York City time, on the
Calculation Date (as defined below) pertaining to such Prime Rate Determination
Date, 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
appears on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Rate Determination Date.
If fewer than four such rates but more than one such rate appear on the Reuters
Screen NYMF Page for the Prime Rate Determination Date, the rate shall be the
arithmetic mean of the prime rates quoted on the basis of the actual number of
days in the year divided by 360 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 will be calculated by the Calculation
Agent and will be the arithmetic mean of the prime rates quoted in The City of
New York on such Prime Rate Determination Date by at least three substitute
banks or trust companies organized and doing business under the laws of the
United States, or any State thereof, having 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 the banks or trust companies selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Prime Rate with respect to such Prime Rate Determination Date will
be the Prime Rate in effect on such Prime Rate Determination Date. "Reuters
Screen NYMF Page" means the display designated as page "NYMF" on the Reuters
Monitor Money Rates Service (or such other 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 NOTES
J.J. Kenny Rate Notes will bear interest at the interest rates (calculated
by reference to the J.J. Kenny Rate and the Spread and/or Spread Multiplier, if
any) specified in the J.J. Kenny Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise indicated in an applicable Pricing Supplement, 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 of the second Business Day prior to the
Interest Reset Date for such Interest Reset Period (a "J.J. Kenny Rate
Determination Date") and shall be the per annum rate on such date equal to the
index made available and subsequently published by Kenny Information Systems or
its successor, based upon 30-day yield evaluations at par of bonds, 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" component issuers selected from time to time by Kenny
Information Systems, including without limitation, issuers of general obligation
bonds; PROVIDED, HOWEVER, that the bonds on which the index is based shall not
include any bonds the interest on which is subject to an "alternate minimum tax"
or similar tax under the Code, unless all tax-exempt bonds are subject to such
tax. If such rate is not made available by 3:00 P.M., New York City time, on the
Calculation Date (as defined below) pertaining to such J.J. Kenny Rate
Determination Date, the J.J. Kenny Rate shall be the rate quoted by a successor
indexing agent selected by the Company equaling the prevailing rate for bonds
rated in the highest short-term rating category by Moody's Investors Service,
Inc. and Standard &
S-15
Poor's Corporation in respect of issuers selected by such successor indexing
agent most closely resembling the "high grade" component issuers selected by
Kenny Information Systems that are subject to tender by the holders thereof for
purchase on not more than seven days' notice and the interest on which is (A)
variable on a weekly basis, (B) excludable from gross income for federal income
tax purposes under the Code, and (C) not subject to an "alternate minimum tax"
or similar tax under the Code, unless all tax-exempt bonds are subject to such
tax; PROVIDED, HOWEVER, that if a successor indexing agent is not available, the
J.J. Kenny Rate with respect to such J.J. Kenny Rate Determination Date will be
the J.J. Kenny Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the Initial Interest Rate).
The "Calculation Date" pertaining to any J.J. Kenny Rate Determination Date
shall 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 NOTES
Eleventh District Cost of Funds Rate Notes will bear interest at the
interest rates (calculated by reference to the Eleventh District Cost of Funds
Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh
District Cost of Funds Rate Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in an applicable Pricing Supplement, 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 as of the last working day of the month immediately prior to such
Interest Reset Date for such 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 "Eleventh District Cost of
Funds Rate Determination Date"), and shall 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 Date as set forth under the caption
"Eleventh District" on the Telerate Page 7058 (which page shall be deemed to
include any successor page (as determined by the Calculation Agent)) as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on any
related Eleventh District Cost of Funds Rate Determination Date, the Eleventh
District Cost of Funds Rate for such Eleventh District Cost of Funds Rate
Determination Date shall 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. 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, then the Eleventh District Cost of Funds Rate for
such Eleventh District Cost of Funds Rate Determination Date 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
Any Floating Rate Note may be designated in the applicable Pricing
Supplement as an "Inverse Floating Rate Note," in which event, unless otherwise
specified in the applicable Pricing Supplement, the interest rate on such
Floating Rate Note will be equal to (i) in the case of the period, if any,
commencing on the Issue Date (or the date on which such Note otherwise begins to
accrue interest (if different from the Issue Date)) up to the first Interest
Reset Date, a fixed rate of interest established by the Company as described in
the applicable Pricing Supplement and (ii) in the case of each period commencing
on an Interest Reset Date, a fixed rate of interest specified in the Pricing
Supplement minus the interest rate determined by reference to the Base Rate as
adjusted by the Spread and/or Spread Multiplier, if any; PROVIDED, HOWEVER, that
(x) the interest rate thereon will not be less than zero
S-16
and (y) the interest rate in effect for the ten days immediately prior to the
date of Maturity of such Inverse Floating Rate Note will be that in effect on
the tenth day preceding such date.
FLOATING RATE/FIXED RATE NOTES
The applicable Pricing Supplement may provide that a Note will be a Floating
Rate Note for a specified portion of its term and a Fixed Rate Note for the
remainder of its term, in which event the interest rate on such Note will be
determined as herein provided as if it were a Floating Rate Note and a Fixed
Rate Note hereunder for each such respective period, all as specified in such
applicable Pricing Supplement.
SUBSEQUENT INTEREST PERIODS
The Pricing Supplement relating to each Note will indicate whether the
Company 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, or method of
calculation (in the case of a Floating Rate Note) with respect to such Note and,
if so, the date or dates on which such interest rate or such Spread, Spread
Multiplier, or method of calculation, as the case may be, may be reset (each an
"Optional Reset Date").
The Company shall notify the Trustee for a Note whether or not it intends to
exercise such option with respect to such Note at least 45 but not more than 60
days prior to an Optional Reset Date for such Note. Not later than 40 days prior
to such Optional Reset Date, the Trustee for such Note will mail to the Holder
of such Note a notice (the "Reset Notice"), first class, postage prepaid,
indicating whether the Company 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, or method of calculation,
as the case may be; and (ii) the provisions, if any, for redemption during the
period from such Optional Reset Date to the next Optional Reset Date or, if
there is no such next Optional Reset Date, to the Stated Maturity of such Note
(each such period a "Subsequent Interest 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 such Subsequent Interest Period. Upon the
transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new
interest rate or such new Spread, Spread Multiplier, and/or method of
calculation as the case may be, shall take effect automatically, and, except as
modified by the Reset Notice and as described below, such Note will have the
same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to an Optional
Reset Date for a Note, the Company may, at its option, revoke the interest rate
(in the case of a Fixed Rate Note) or the Spread or Spread Multiplier (in the
case of a Floating Rate Note) provided for in the Reset Notice with respect to
such Optional Reset Date and establish a higher interest 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 Subsequent Interest Period commencing on such
Optional Reset Date by causing the Trustee for such Note to mail notice of such
higher interest rate or higher Spread or Spread Multiplier, as the case may be,
first class, postage prepaid, to the Holder of such Note. Such notice shall be
irrevocable. All Notes with respect to which the interest rate or Spread or
Spread Multiplier is reset on an Optional Reset Date will bear such higher
interest rate (in the case of Fixed Rate Notes) or higher Spread or Spread
Multiplier (in the case of Floating Rate Notes), whether or not tendered for
repayment.
The Holder of a Note will have the option to elect repayment of such Note by
the Company on each Optional Reset Date at a price equal to the principal amount
thereof, plus interest accrued to such Optional Reset Date. In order for a Note
to be repaid on an Optional Reset Date, the Holder thereof must follow the
procedures set forth below under "Optional Redemption, Repayment and Repurchase"
for optional repayment, except that the period for delivery of such Note or
notification to
S-17
the Trustee for such Note shall be at least 25 but not more than 35 days prior
to such Optional Reset Date, and except that a Holder who has tendered a Note
for repayment pursuant to a Reset Notice may, by written notice to the Trustee
for such Note, revoke any such tender for repayment until the close of business
on the tenth day prior to such Optional Reset Date.
AMORTIZING NOTES
The Company may from time to time offer Notes ("Amortizing Notes") on which
a portion or all the principal amount is payable prior to Stated Maturity in
accordance with a schedule, by application of a formula, or by reference to an
Index (as defined below). Further information concerning additional terms and
conditions of any Amortizing Notes, including terms for repayment thereof, will
be set forth in the applicable Pricing Supplement.
INDEXED NOTES
The Company may from time to time offer Indexed Notes on which certain or
all interest payments (in the case of an "Indexed Rate Note"), and/or the
principal amount payable at Stated Maturity or earlier redemption or retirement
(in the case of an "Indexed Principal Note"), is determined by reference to the
principal amount of such Notes (or, in the case of an Indexed Principal Note, to
the amount designated in the applicable Pricing Supplement as the "Face Amount"
of such Indexed Note) and by reference to prices, changes in prices, or
differences between prices, of securities, currencies, intangibles, goods,
articles or commodities or by application of a formula or by such other
objective price, economic or other measures as are described in the applicable
Pricing Supplement (any such measure or measures, an "Index"). A description of
the Index 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 to such Index, will be set forth in the applicable Pricing Supplement.
In the case of a Fixed Rate Note, Floating Rate Note or Indexed Rate Note
that is also an Indexed Principal Note, the amount of any interest payment will
be determined by reference to the Face Amount of such Indexed Note unless
specified otherwise in the applicable Pricing Supplement. In the case of an
Indexed Principal Note, the principal amount payable at Stated Maturity or any
earlier redemption or repayment of the Indexed Note may be different from the
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 be the Agent or another affiliate of the Company, and such third party
either suspends the calculation or announcement of such Index or changes the
basis upon which such Index is calculated (other than changes consistent with
policies in effect at the time such Indexed Note was issued and permitted
changes described in the applicable Pricing Supplement), then such Index shall
be calculated for purposes of such Indexed Note by another 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. If for any reason such Index cannot be calculated on the same basis and
subject to the same conditions and controls as applied to the original third
party, then the indexed interest payments, if any, or any indexed principal
amount of such Indexed Note shall be calculated in the manner set forth in the
applicable Pricing Supplement. Any determination of such third party shall, in
the absence of manifest error, be binding on all parties.
Unless otherwise specified in the applicable Pricing Supplement, (i) for the
purpose of determining whether Holders of the requisite principal amount of
Notes outstanding under the applicable Indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
Indexed Notes will be deemed to be the Face Amount thereof, and (ii) in the
event of an acceleration of the Stated Maturity of an Indexed Note, the
principal amount payable to the Holder of such Note upon acceleration will be
the principal amount determined by reference to the formula by
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which the principal amount of such Note would be determined on the Stated
Maturity thereof, as if the date of acceleration were the Stated Maturity.
An investment in Indexed Notes entails 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 Note is indexed and economic and political events over which the
Company 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. Accordingly, prospective investors
should consult their own financial and legal advisors as to the risks entailed
by investment in Indexed Notes.
DUAL CURRENCY NOTES
The Company may from time to time offer Notes (the "Dual Currency Notes") as
to which the Company has a one time option, exercisable on 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"). Information as to the relative value of the Specified Currency
compared to the Optional Payment Currency will be set forth in the applicable
Pricing Supplement.
The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the Specified Currency and Optional Payment
Currency of such issuance and the Designated Exchange Rate for such issuance,
which will be a fixed exchange rate used for converting amounts denominated in
the Specified Currency into amounts denominated in the Optional Payment Currency
(the "Designated Exchange Rate"). The Pricing Supplement will also specify the
Option Election Dates and Interest Payment Dates for the related issuance of
Dual Currency Notes. Each Option Election Date will be a certain number of days
before an Interest Payment Date or Stated Maturity, as set forth in the
applicable Pricing Supplement, and will be the date on which the Company may
select whether to make all scheduled payments due thereafter in the Optional
Payment Currency rather than in the Specified Currency.
If the Company makes such an election, the amount payable in the Optional
Payment Currency shall be determined using the Designated Exchange Rate
specified in the applicable Pricing Supplement. If such election is made, notice
of such election shall be mailed in accordance with the terms of the applicable
Tranche of Dual Currency Notes within two Business Days of the Option Election
Date and shall state (i) the first date, whether an Interest Payment Date and/or
Stated Maturity, in which scheduled payments in the Optional Payment Currency
will be made and (ii) the Designated Exchange Rate. Any such notice by the
Company, once given, may not be withdrawn. The equivalent value in the Specified
Currency of payments made after such an election may be less, at the then
current exchange rate, than if the Company had made such payment in the
Specified Currency.
For United States federal income tax purposes, holders of Dual Currency
Notes may be subject to rules which differ from the general rules applicable to
holders of other types of Notes offered hereby. The United States federal income
tax consequences of the purchase, ownership and disposition of Dual Currency
Notes will be set forth in the applicable Pricing Supplement.
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RENEWABLE NOTES
The Company may from time to time offer Notes which will mature on an
Interest Payment Date specified in the applicable Pricing Supplement occurring
in or prior to the twelfth month following the Original Issue Date of such Notes
(the "Initial Maturity Date") unless the term of all or any portion of any such
Note (a "Renewable Note") is renewed in accordance with the procedures described
below.
On the Interest Payment Date occurring in the sixth month (unless a
different 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, the last month in a period
equal to twice the Special Election Interval) after such Renewal Date, if the
holder of such Renewable Note elects to extend the term of such Renewable Note
or any portion thereof as described below. If a Holder does not elect to extend
the term of any portion of the principal amount of a Renewable Note during the
specified period prior to any Renewal Date, such portion will become due and
payable on the Interest Payment Date occurring in the sixth month (or the last
month in the Special Election Interval) after such Renewal Date (the "New
Maturity Date").
A Holder of a Renewable Note may elect to renew the term of such Renewable
Note, or if so specified in the applicable Pricing Supplement, any portion
thereof, by delivering a notice to such effect to the Trustee (or any duly
appointed paying agent) at the corporate trust office of the Trustee or agency
of the Trustee in the City of New York not less than 15 nor more than 30 days
prior to such Renewal Date (unless another period is specified in the applicable
Pricing Supplement as the "Special Election Period"). Such election will be
irrevocable and will be binding upon each subsequent Holder of such Renewable
Note. An election to renew the term of a Renewable Note may be exercised with
respect to less than the entire principal amount of such Renewable Note only if
so specified in the applicable Pricing Supplement and only in such principal
amount, or any integral multiple in excess thereof, as is specified in the
applicable Pricing Supplement. Notwithstanding the foregoing, the term of the
Renewable Notes may not be extended beyond the Stated Maturity specified for
such Renewable Notes in the applicable Pricing Supplement.
If the Holder does not elect to renew the term, such Renewable Note must be
presented to the Trustee (or any duly appointed paying agent) and, with respect
to a Renewable Note that is a certificate issued in definitive form, as soon as
practicable following receipt of such Renewable Note the Trustee (or any duly
appointed paying agent) shall issue in exchange therefor in the name of such
Holder (i) a Note, in a principal amount equal to the principal amount of such
exchanged Renewable Note for which no election to renew the term thereof was
exercised, with terms identical to those specified on such Renewable Note
(except that such Note shall have a fixed, nonrenewable Stated Maturity on the
New Maturity Date) and (ii) if an election to renew is made with respect to less
than the full principal amount of such holder's Renewable Note, a replacement
Renewable Note, in a principal amount equal to the principal amount of such
exchanged Renewable Note for which the election to renew was made, with terms
identical to such exchanged Renewable Notes.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note for one or
more periods of whole years from one to five (each an "Extension Period") up to
but not beyond the date (the "Final Maturity") set forth in such Pricing
Supplement.
S-20
The Company may exercise such option with respect to a Note by notifying the
Trustee for such Note at least 45 but not more than 60 days prior to the old
Stated Maturity of such Note. Not later than 40 days prior to the old Stated
Maturity of such Note, the Trustee for such Note will mail to the Holder of such
Note a notice (the "Extension Notice"), first class, postage prepaid. The
Extension Notice will set forth (i) the election of the Company to extend the
Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in the case of
a Fixed Rate Note, the interest rate applicable to the Extension Period or, in
the case of a Floating Rate Note, the Spread, Spread Multiplier or method of
calculation applicable to the Extension Period; and (iv) the provisions, if any,
for redemption during the 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. Upon the mailing by such
Trustee of an Extension Notice to the Holder of a Note, the Stated Maturity of
such Note shall be extended automatically, and, except as modified by the
Extension Notice and as described in the next paragraph, such Note will have the
same terms as prior to the mailing of such Extension Notice. Notwithstanding the
foregoing, not later than 20 days prior to the old Stated Maturity of such Note,
the Company may, at its option, revoke the interest rate (in the case of a Fixed
Rate Note) or the Spread or Spread Multiplier (in the case of a Floating Rate
Note) provided for in the Extension Notice for such Note and establish a higher
interest 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, by
causing the Trustee for such Note to mail notice of such higher interest rate or
higher Spread or Spread Multiplier, as the case may be, first class, postage
prepaid, to the Holder of such Note. Such notice shall be irrevocable. All Notes
with respect to which the Stated Maturity is extended will bear such higher
interest rate (in the case of Fixed Rate Notes) or higher Spread or Spread
Multiplier (in the case of Floating Rate Notes) for the Extension Period,
whether or not tendered for repayment.
If the Company extends the Stated Maturity of a Note, the Holder of such
Note will have the option to elect repayment of such Note by the Company on the
old Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order for a Note to be repaid on the old
Stated Maturity once the Company has extended the Stated Maturity thereof, the
Holder thereof must follow the procedures set forth below under "Optional
Redemption, Repayment and Repurchase" for optional repayment, except that the
period for delivery of such Note or notification to the Trustee for such Note
shall be at least 25 but not more than 35 days prior to the old Stated Maturity
and except that a Holder who has tendered a Note for repayment pursuant to an
Extension Notice may, by written notice to the Trustee for such Note, revoke any
such tender for repayment until the close of business on the tenth day before
the old Stated Maturity.
COMBINATION OF PROVISIONS
If so specified in the applicable Pricing Supplement, any Note may be
subject to 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 to the rules of the Depositary, all Book-Entry
Notes having the same Original Issue Date and otherwise identical terms will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of the Depositary, and
registered in the name of a nominee of the Depositary. Book-Entry Notes will not
be exchangeable for Certificated Notes and, except under the circumstances
described in the Prospectus under "Description of Debt Securities--Global
Securities," 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.
If an issue of Notes is denominated in a currency other than the U.S.
dollar, the Company will make payments of principal and any interest in the
currency in which the Notes 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 Notes is held that it elects, in accordance with and to the
extent permitted by the applicable Pricing Supplement and the revelant Note, to
receive such payment of principal or interest in the foreign currency. On or
prior to the third Business Day after the record date for payment of interest
and twelve days prior to the date for payment of principal, such participant
shall notify DTC of (i) its election to receive all, or the specified portion,
of such payment in the foreign currency and (ii) its instructions for wire
transfer of such payment to a foreign currency account.
A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the Prospectus under
"Description of Debt Securities--Global Securities." The Depositary has
confirmed to the Company, the Agent and the Trustees that it intends to follow
such procedures.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its Stated Maturity or that such Note will be
redeemable at the option of the Company, in whole or in part, and the date or
dates (each an "Optional Redemption Date") on which such Note may be redeemed
and the price (the "Redemption Price") at which (together with accrued interest
to such Optional Redemption Date) such Note may be redeemed on each such
Optional Redemption Date. Unless otherwise specified in the applicable Pricing
Supplement, at least 30 days prior to the date of redemption, such Trustee shall
mail notice of such redemption, first class, postage prepaid, to the Holder of
such Note. Unless otherwise specified in the applicable Pricing Supplement, the
Company may exercise such option with respect to a redemption of a Note in part
only by notifying the Trustee for such Note at least 45 days prior to any
Optional Redemption Date. In the event of redemption of a Note in part only, a
new Note or Notes for the unredeemed portion thereof shall be issued to the
Holder thereof upon the cancellation thereof. The Notes (other than Amortizing
Notes) will not be subject to any sinking fund.
The Pricing Supplement relating to each Note will also indicate whether the
Holder of such Note will have the option to elect repayment of such Note by the
Company prior to its Stated Maturity, and, if so, such Pricing Supplement will
specify the date or dates on which such Note may be repaid (each an "Optional
Repayment Date") and the price (the "Optional Repayment Price") at which,
together with accrued interest to such Optional Repayment Date, such Note may be
repaid on each such Optional Repayment Date.
In order for a Note to be repaid, the Trustee for such Note must receive, at
least 30 but not more than 45 days prior to an Optional Repayment Date (i) such
Note with the form entitled "Option to
S-22
Elect Repayment" on the reverse thereof duly completed, or (ii) 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 forth the name
of the Holder of such Note, the principal amount of such Note to be repaid, the
certificate number or a description of the tenor and terms of such Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Note to be repaid with the form entitled "Option to Elect
Repayment" on the reverse of the Note duly completed will be received by such
Trustee not later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter. If the procedure described in clause
(ii) of the preceding sentence is followed, then such Note and form duly
completed must be received by such Trustee by such fifth Business Day. Any
tender of a Note by the Holder for repayment (except pursuant to a Reset Notice
or an Extension Notice) shall be irrevocable. The repayment option may be
exercised by the Holder of a Note for less than the entire principal amount of
such Note provided that the principal amount of such Note remaining outstanding
after repayment is an authorized denomination. Upon such partial repayment, such
Note shall be canceled and a new Note or Notes for the remaining principal
amount thereof shall be issued in the name of the Holder of such repaid Note.
If a Note is represented by a Global Security, the Depositary's nominee will
be the Holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Note 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, if a
Note is an OID Note (other than an Indexed Note), the amount payable on such
Note in the event of redemption or repayment prior to its Stated Maturity (other
than pursuant to an optional redemption by the Company at a stated Redemption
Price) shall be the Amortized Face Amount of such Note as of the date of
redemption or the date of repayment, as the case may be. The Amortized Face
Amount of a Note on any date shall be the amount equal to (i) the Issue Price
set forth on the face of the applicable Pricing Supplement plus (ii) that
portion of the difference between such Issue Price and the stated principal
amount of such Note that has accrued by such date at (x) the Bond Yield to
Maturity set forth on the face of the applicable Pricing Supplement or (y) if so
specified in the applicable Pricing Supplement, the Bond Yield to Call set forth
on the face thereof (computed in each case in accordance with generally accepted
United States bond yield computation principles), PROVIDED, HOWEVER, that in no
event shall the Amortized Face Amount of a Note exceed its stated principal
amount. The Bond Yield to Call listed on the face of a Pricing Supplement shall
be computed on the basis of the first occurring Optional Redemption Date with
respect to such Note and the amount payable on such Optional Redemption Date. In
the event that any such Note is not redeemed on such first occurring Optional
Redemption Date, the Bond Yield to Call with respect to such Note shall be
recomputed on such Optional Redemption Date on the basis of the next occurring
Optional Redemption Date and the amount payable on such Optional Redemption
Date, and shall continue to be so recomputed on each succeeding Optional
Redemption Date until the Note is so redeemed.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may, at the discretion of the
Company, be held or resold or surrendered to the Trustee for such Notes for
cancellation.
S-23
OTHER PROVISIONS
Any provisions with respect to the determination of an interest rate basis,
the specification of an interest rate basis, calculation of the interest rate
applicable to, or the principal payable at Maturity on, any Note, its Interest
Payment Dates or any other matter relating thereto may be modified by the terms
as specified in the applicable Pricing Supplement.
DEFEASANCE
The defeasance provisions described in the Prospectus will not be applicable
to the Notes.
S-24
CURRENCY RISKSRISK FACTORS
CHANGES IN EXCHANGE RATES AND EXCHANGE CONTROLS COULD RESULT IN A SUBSTANTIAL
LOSS TO YOU.
An investment in Notes thatforeign currency notes, which are notes denominated in a
Specified Currencyspecified 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 Noteindexed note on which all or a part of
any payment due is determined by reference tobased on a currency other than U.S. dollars entails
significant risks that are not associated with a similar investment in
non-Indexed Notes.non-indexed notes. Such risks include, without limitation,but are not limited to:
- the possibility of significant market changes in rates of exchange between
U.S. dollars and such Specified Currency,specified currency;
- the possibility of significant changes in rates of exchange between U.S.
dollars and such Specified Currencyspecified currency resulting from official redenomination
with respectrelating to such Specified Currencyspecified 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 CompanyCitigroup has no control and
which cannot be readily foreseen, such as
- economic events;
- political events; 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.foreign currency note. Depreciation of the Specified Currencyspecified
currency of a Foreign Currency Noteforeign currency note against U.S. dollars would result in a
decrease in the effective yield of such Foreign Currency Noteforeign 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 (otherspecified currency, other than U.S. dollars)dollars, at the time of payment of
principal of, or premium, if any, or interest on, a Foreign Currency Note.foreign currency note. There
can be no assurance that exchange controls will not restrict or prohibit
payments of principal, (andand premium, if any)any, or interest in any such Specified
Currency.specified
currency. Even if there are no actual exchange controls, it is possible that
such Specified Currencyspecified currency would not be available to the CompanyCitigroup when payments on
such Notenote are due because of circumstances beyond the control of the Company.Citigroup. In
any such event, the CompanyCitigroup 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 purchasersin this prospectus supplement. You should consult theiryour own
financial and legal advisors as to the risks entailed by an investment in Notesnotes
denominated in a currency other than U.S. dollars. See "--Payment Currency" and
"Description of the Notes--Payment of Principal and Interest" below.
The information set forth in this Prospectus Supplementprospectus supplement is directed to
prospective purchasers of Notesnotes who are United States residents, and the Companyresidents. Citigroup
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States with respect toregarding any matters that may affect
the purchase or holding of, or receipt of payments of principal, premium or
interest in respect of, Notes.notes. Such persons should consult their advisors with
regard to such matters. Any Pricing Supplementpricing supplement relating to Notesnotes having a
Specified Currencyspecified 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 CURRENCYS-3
THE UNAVAILABILITY OF CURRENCIES COULD RESULT IN A SUBSTANTIAL LOSS TO YOU.
Except as set forth below, if payment in respect of a Notenote is required to be
made in a Specified Currencyspecified currency other than U.S. dollars and such currency isis--
- unavailable due to the imposition of exchange controls or other
circumstances beyond the Company's control or isCitigroup's control;
- no longer used by the government of the country issuing such currencycurrency; or
- no longer used for the settlement of transactions by public institutions
of or within the international banking community,community--
then all payments in respect of such Notenote 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 Ratemarket exchange rate (as described below) for such currency
or as otherwise indicated in the applicable Pricing Supplement.pricing supplement. Any payment in
respect of such Notenote made under such circumstances in U.S. dollars will not
constitute an Eventevent of Defaultdefault under the Indentureindenture under which such Notenote shall
have been issued.
InIf the event of an official redenomination of the Specified Currencyspecified currency of a Note (othernote is officially redenominated, other than
as a result of European Monetary Union, but including, without limitation, an
official redenomination of any such Specified Currencyspecified currency that is a composite
currency),currency, the obligations of the Company with respect toCitigroup regarding payments on Notessuch note
denominated in such Specified Currencyspecified 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 Notesnotes as a result of
(i)- any change in the value of the Specified Currency thereofspecified currency of such notes relative
to any other currency due solely to fluctuations in exchange rates or
(ii)- any redenomination of any component currency of any composite currency,
(unlessunless such composite currency is itself officially redenominated). The procedures described in this section shall
not apply in the event of European Monetary Union.redenominated.
For a description of the
procedure to be followed in connection with European Monetary Union, see "European Monetary Union" in
the Prospectus.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 Notesnotes 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.pricing
supplement.
JUDGMENTS IN A FOREIGN CURRENCY JUDGMENTSCOULD RESULT IN A SUBSTANTIAL LOSS TO YOU.
The Notesnotes 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 andobligation. 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.
RISKSS-4
CHANGES IN THE VALUE OF UNDERLYING ASSETS OF INDEXED NOTES COULD RESULT IN A
SUBSTANTIAL LOSS TO YOU.
An investment in Indexed Notesindexed notes may entail significant risks that are not
associated with a similar investment in a debt instrument that
- has a fixed principal amount,amount;
- is denominated in U.S. dollarsdollars; and
- bears interest at either a fixed rate or a floating rate determined by reference tobased on
nationally published interest rate references.
The risks of a particular Indexed Noteindexed note will depend on the terms of such
Indexed Note, butindexed note. Such risks may include, without limitation,but are not limited to, the possibility of
significant changes in the prices of
securities, currencies,
intangibles, goods, articles or commodities or of other- the underlying assets;
- another objective price,price; and
- economic or other measures making up the relevant Index (the "Underlying
Assets"). Suchindex.
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 the CompanyCitigroup has no control and which cannot readily be
foreseen, such asforeseen. These risks include
- economic events;
- political events; and
political
events and- the supply of, and demand for, the Underlying Assets.underlying assets.
In recent years, currency exchange rates and prices for various Underlying Assetsunderlying
assets have been highly volatile, and suchvolatile. 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.indexed note.
In considering whether to purchase Indexed Notes, investorsindexed notes, you should be aware that
the calculation of amounts payable in respect of Indexed Notesindexed notes may involve
reference to
- an Indexindex determined by an S-26
affiliate of the CompanyCitigroup or
to- prices which are published solely by third parties or entities which are
not subject to regulation underregulated by the laws of the United States.
The risk of loss as a result of the linkage of principal or interest payments on
Indexed Notesindexed notes to an Indexindex and to the Underlying Assetsunderlying assets can be substantial. Prospective purchasersYou
should consult your own financial and legal advisors as to the risks entailed by
an investment in indexed notes.
------------------------
S-5
You should only rely on the information contained or incorporated by
reference in this prospectus supplement, the prospectus and in 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.
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each note in a currency specified by
Citigroup for such note. If requested by a prospective purchaser of a note
having a specified currency other than U.S. dollars, the agent may at its
discretion arrange for the exchange of U.S. dollars into such specified currency
to enable the purchaser to pay for such note. Each such exchange will be made by
the agent on such terms and those conditions, limitations and charges that the
agent may from time to time establish in accordance with its regular foreign
exchange practice shall control the exchange. All costs of exchange will be
borne by the purchaser.
References in this prospectus supplement to "U.S. dollars," "U.S.$,"
"dollar" or "$" are to the lawful currency of the United States.
S-6
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Medium-Term Senior
Notes, Series A and Medium-Term Subordinated Notes, Series A supplements, the
description of the general terms and provisions of the debt securities set forth
in the prospectus. If any specific information regarding the notes in this
prospectus supplement is 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 for each offering of notes 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 supplement may also add,
update or change information contained in the prospectus and this prospectus
supplement. It is important for you to consider the information contained in the
prospectus, this prospectus supplement and the pricing supplement in making your
investment decision.
GENERAL
INTRODUCTION. The senior notes are a series of senior debt securities
issued under Citigroup's senior debt indenture. The subordinated notes are a
series of subordinated debt securities issued under Citigroup's subordinated
debt indenture. At the date of this prospectus supplement, the notes offered
pursuant to this prospectus supplement are limited to an aggregate initial
public offering price or purchase price of up to $6,000,000,000 or its
equivalent in one or more foreign or composite currencies, subject to reduction
as a result of the sale of other securities under the registration statement of
which this prospectus supplement and the accompanying prospectus form a part, or
under a registration statement to which this prospectus supplement and the
accompanying prospectus also relate. The amount of notes sold of either series
will reduce the amount of notes of the other series that may be sold. Citigroup
reserves the right to withdraw, cancel or modify the offer made by this
prospectus supplement without notice. The aggregate amount of notes may be
increased from time to time to such larger amount as may be authorized by
Citigroup. The U.S. dollar equivalent of the public offering price or purchase
price of a note having a specified currency other than U.S. dollars will be
determined on the basis of the market exchange rate, which shall 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 for such
specified currency on the applicable issue date. Such determination will be made
by Citigroup or its agent, as the exchange rate agent for the applicable series
of notes.
RANKING. The senior notes will constitute part of the senior indebtedness
of Citigroup and will rank on an equal basis with all other unsecured debt of
Citigroup other than subordinated debt. The subordinated 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, to all senior indebtedness of
Citigroup. See "Description of Debt Securities--Subordinated Debt" in the
prospectus.
On a consolidated basis, after giving effect to the merger of Citicorp into
a newly formed, wholly owned subsidiary of Citigroup as of September 30, 1998,
the aggregate principal amount of senior indebtedness of Citigroup outstanding
was approximately $78.1 billion. This senior indebtedness consisted of
approximately $42.5 billion of term debt, approximately $21.2 billion of
commercial paper and approximately $14.4 billion of other short-term borrowings.
FORMS OF NOTES. The notes will be issued in fully registered form only,
without coupons. Each note will be issued initially as a book-entry note, which
shall be a global security registered in the name of a nominee of The Depository
Trust Company, as depository ("DTC"), or such other depository as is stated in
the pricing supplement. Alternatively, if specified in the applicable pricing
supplement to this
S-7
prospectus supplement, each note will be issued initially as a certificated
note, which shall be a certificate issued in temporary or definitive form.
Except as set forth in the prospectus under "Description of Debt
Securities--Book-Entry Procedures And Settlement For Debt Securities,"
book-entry notes will not be issuable as certificated notes. See "Book-Entry
System" below.
DENOMINATIONS. Unless otherwise specified in the applicable pricing
supplement, the authorized denominations of notes denominated in U.S. dollars
will be $1,000 and any larger amount that is a whole multiple of $1,000. The
authorized denominations of notes having a specified currency other than U.S.
dollars will be the approximate equivalents in the specified currency.
MATURITY. Unless otherwise specified in the applicable pricing supplement,
each note will mature on a stated maturity date. Such stated maturity date shall
be a business day more than nine months from its date of issue, as selected by
the purchaser and agreed to by Citigroup. The stated maturity date may be
extended at the option of Citigroup. Each note may also be redeemed at the
option of Citigroup, or to repayment at the option of the holder, prior to its
stated maturity. Each note having a specified currency of pounds sterling will
mature in compliance with such regulations as the Bank of England may promulgate
from time to time.
ADDITIONAL INFORMATION. The pricing supplement relating to a note will
describe the following terms:
- the specified currency for such note;
- whether such note
(1) is a fixed rate note, which bears interest at a fixed rate, the rate
of which may be zero in the case of certain OID notes;
(2) is a floating rate note; and/or
(3) is an amortizing note on which a portion or all the principal amount
is payable prior to stated maturity in accordance with a schedule,
by application of a formula, or based on an index; and/or
(4)is an indexed note on which the amount of any interest payment, in
the case of an indexed rate note, and/or the principal amount payable
at maturity, in the case of an indexed principal note, will be
determined based on 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;
- the issue price, which will be expressed as a percentage of the aggregate
principal amount or face amount, and represents the price at which such
note will be issued;
- the original issue date on which such note will be issued;
- the date of the stated maturity;
- if it is a fixed rate note, the rate per annum at which such note will
bear interest, if any, and whether and the manner in which such rate may
be changed prior to its stated maturity;
- if it is a floating rate note, the base rate, the initial interest rate,
the interest reset period or the interest reset dates, the interest
payment dates, and, if applicable, the index maturity, the maximum
interest rate, the minimum interest rate, the spread or spread multiplier,
and any other terms relating to the particular method of calculating the
interest rate for such note and whether and how such spread or spread
multiplier may be changed prior to stated maturity;
- whether it is an OID note;
- if it is an amortizing note, the terms for repayment prior to stated
maturity;
S-8
- if it is an indexed note, in the case of an 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, its face amount and the manner in which
the principal amount payable at stated maturity will be determined;
- whether such note may be redeemed at the option of Citigroup, or repaid at
the option of the holder, prior to stated maturity as described under
"Optional Redemption, Repayment and Repurchase" below and, if so, the
provisions relating to such redemption or repayment, including, in the
case of an OID note or indexed note, the information necessary to
determine the amount due upon redemption or repayment;
- whether such note may have an optional extension beyond its stated
maturity as described under "Extension of Maturity" below;
- whether such note will be represented by a global security or a
certificate issued in definitive form;
- any special United States federal income tax consequences of the purchase,
ownership and disposition of certain notes;
- whether it is a renewable note, and, if so, its specific terms;
- the use of proceeds, if materially different than that disclosed in the
accompanying prospectus; and
- any other terms of such note provided in the accompanying prospectus to be
set forth in a pricing supplement or that are otherwise not inconsistent
with the provisions of the indenture under which such note will be issued.
As used in this prospectus supplement, "business day" means:
- for any note, any day that is not a Saturday or Sunday and that, in The
City of New York, is not a day on which banking institutions generally are
authorized or obligated by law or executive order to close;
- for LIBOR notes only, a London business day, which shall be any such day
on which dealings in deposits in U.S. dollars are transacted in the London
interbank 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 not
a day on which banking institutions generally are authorized or obligated
by law to close; and
- for notes denominated in Euros, a day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is
open.
As used above, a "principal financial center" means the capital city of the
country issuing the specified currency. However, for U.S. dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire and
Swiss francs, the principal financial center shall be The City of New York,
Sydney, Toronto, Frankfurt, Amsterdam, Milan and Zurich, respectively.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of, and any premium and interest on, each note are payable by
Citigroup in the specified currency for such note. If the specified currency for
a note is other than U.S. dollars, Citigroup will, unless otherwise specified in
the applicable pricing supplement, arrange to convert all payments in respect of
such note into U.S. dollars in the manner described in the following paragraph.
The holder of a note having a specified currency other than U.S. dollars may, if
stated in the applicable
S-9
pricing supplement and such note, elect to receive all payments in respect of
such note in the specified currency by delivery of a written notice to the
trustee for such note not later than fifteen calendar days prior to the
applicable payment date, except under the circumstances described under "Risk
Factors-- Currency Risks--Payment Currency" above. Such election will remain in
effect until revoked by written notice to such trustee received not later than
fifteen calendar days prior to the applicable payment date. No such change of
election may be made regarding payments on any note relating to which an event
of default has occurred or Citigroup has given notice of redemption.
In the case of a note having a specified currency other than U.S. dollars,
the amount of any U.S. dollar payment in respect of such note will be determined
by the exchange rate agent:
- based on the highest firm bid quotation expressed in U.S. dollars received
by the exchange rate agent at approximately 11:00 a.m., New York City
time, on the second business day preceding the applicable payment date, or
if no such rate is quoted on such date, the last date on which such rate
was quoted;
- from three, or if three are not available, then two, recognized foreign
exchange dealers in The City of New York, one or more of which may be the
agent, and another of which may be the exchange rate agent, selected by
the exchange rate agent; and
- by the quoting dealer for the purchase.
The exchange rate agent will also determine prior to settlement the
aggregate amount of such specified currency payable on a payment date in respect
of all notes denominated in such specified currency. All currency exchange costs
will be borne by the holders of such notes by deductions from such payments. If
no such bid quotations are available, such payments will be made in such
specified currency, unless such specified currency is unavailable due to the
imposition of exchange controls or due to other circumstances beyond Citigroup's
control, in which case such payments will be made as described under "Risk
Factors--Currency Risks--Payment Currency" above.
Unless otherwise specified in the applicable pricing supplement, U.S. dollar
payments of interest on notes, other than interest payable at stated maturity,
will be made, except as provided below, by check mailed to the registered
holders of such notes. In the case of global securities representing book-entry
notes, such payments of interest on notes will be made to a nominee of the
depositary. However, in the case of a note issued between a regular record date
and the related interest payment date, unless otherwise specified in the related
pricing supplement, interest for the period beginning on the original issue date
for such note and ending on such interest payment date will be paid on the next
succeeding interest payment date to the registered holder of such note on the
related regular record date.
A holder of $10,000,000, or its equivalent in a specified currency other
than U.S. dollars, or more in aggregate principal amount of notes of like tenor
and term, will be entitled to receive such U.S. dollar payments by wire transfer
of immediately available funds. However, such a holder is entitled to receive
such payments only if appropriate wire transfer instructions are received in
writing by the trustee for such notes not later than fifteen calendar days prior
to the applicable interest payment date. Unless otherwise specified in the
applicable pricing supplement, principal and any premium and interest payable at
the stated maturity of a note will be paid in immediately available funds upon
surrender of such note at the corporate trust office or agency of the trustee
for such note in The City of New York.
Unless otherwise specified in this prospectus supplement or the applicable
pricing supplement, any payment required to be made in respect of a note 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. A payment may be made on the next succeeding
business day with the same force and effect as if made on such date, and no
additional interest shall accrue as a result of such delayed payment.
S-10
Unless otherwise specified in the applicable pricing supplement, if the
principal of any OID note, other than an indexed note is declared to be due and
payable immediately as a result of the acceleration of stated maturity, the
amount of principal due and payable relating to such note will be limited to the
aggregate principal amount of such note multiplied by the sum of (1) its issue
price, expressed as a percentage of the aggregate principal amount, plus (2) the
original issue discount amortized from the date of issue to the date of
declaration. Amortization will be calculated using the interest method, computed
in accordance with generally accepted accounting principles in effect on the
date of declaration.
The regular record date for to any interest payment date for a floating rate
note, fixed rate note or an indexed rate note shall be the date, whether or not
a business day, fifteen calendar days immediately preceding such interest
payment date.
FIXED RATE NOTES
Each fixed rate note will bear interest from its original issue date, or
from the last interest payment date to which interest has been paid or duly
provided for, at the rate per annum stated in the applicable pricing supplement
until its principal amount is paid or made available for payment. However, as
described below under "Subsequent Interest Periods" and "Extension of Maturity,"
or as otherwise may be described in the applicable pricing supplement, the rate
of interest payable on certain fixed rate notes may be adjusted from time to
time.
Unless otherwise set forth in the applicable pricing supplement, interest on
each Fixed Rate Note will be payable semiannually in arrears on such dates as
set forth in the applicable pricing supplement, with each such day being an
interest payment date, and at stated maturity. Unless "accrue to pay" is
specified in the applicable pricing supplement or unless otherwise specified in
the applicable pricing supplement, if an interest payment date for any fixed
rate note would otherwise be a day that is not a business day, any payment
required to be made in respect of such note on such date, including the day of
stated maturity, may be made on the next succeeding business day with the same
force and effect as if made on such date. No additional interest will accrue as
a result of such delayed payment. If in connection with any fixed rate note,
"accrue to pay" is specified in the applicable pricing supplement, and any
interest payment date for such fixed rate note would otherwise be a day that is
not a business day, such interest payment date shall be postponed to the next
succeeding business day and any payment of interest in respect of such interest
payment date will include interest accrued through the day before such interest
payment date. Unless otherwise specified in the applicable pricing supplement,
interest on fixed rate notes will be computed on the basis of a 360-day year of
twelve 30-day months or, in the case of an incomplete month, the number of days
elapsed.
FLOATING RATE NOTES
The "initial interest period" is the period from the original issue date to,
but not including, the first interest reset date. Each floating rate note will
bear interest at the initial interest rate set forth, or otherwise described, in
the applicable pricing supplement. The interest reset period is the period from
each interest reset date to, but not including, the following interest reset
date. The initial interest period and any interest reset period is an interest
period. The interest rate for each floating rate note will be determined based
on an interest rate basis, the base rate, plus or minus the spread, if any, or
multiplied by the spread multiplier, if any. A basis point or bp equals
one-hundredth of a percentage point. The spread is the number of basis points
that may be specified in the applicable pricing supplement as being applicable
to such note. The spread multiplier is the percentage that may be specified in
the applicable pricing supplement as being applicable to such note. As described
below under "Subsequent Interest Periods" and "Extension of Maturity," or as may
otherwise be so specified in the applicable pricing supplement, the spread or
spread multiplier on certain floating rate notes may be adjusted from time to
time.
S-11
The applicable pricing supplement will designate one of the following base
rates as applicable to a floating rate note:
- LIBOR;
- the Commercial Paper Rate;
- the Treasury Rate;
- the Federal Funds Rate;
- the CD Rate;
- the Prime Rate;
- the J.J. Kenny Rate;
- the Eleventh District Cost of Funds Rate; or
- such other base rate as is set forth in the applicable pricing supplement
and in such note.
The "index maturity" for any floating rate note is the period of maturity of
the instrument or obligation from which the base 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.
"H.15 Daily Update" means the daily update of the Board of Governors of the
Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any
successor site or publication.
"Calculation Date," where applicable, means the date by which the
calculation agent is to calculate the interest rate for floating rate notes
which shall be the earlier of (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 the case may be.
As specified in the applicable pricing supplement, a floating rate note may
also have either or both of the following, which in each case will be expressed
as a rate per annum on a simple interest basis:
- maximum interest rate, which shall be a maximum limitation, or ceiling, on
the rate at which interest may accrue during any interest period and/or
- minimum interest rate, which shall be a minimum limitation, or floor, on
the rate at which interest may accrue during any interest period.
In addition to any maximum interest rate that may be applicable to any
floating rate note, the interest rate on a floating rate note will in no event
be higher than the maximum rate permitted by applicable law, as the same may be
modified by United States law of general application. The notes will be governed
by the law of the State of New York. As of the date of this prospectus
supplement, the maximum rate of interest under provisions of the New York penal
law, with certain 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.
Citigroup will appoint and enter into agreements with calculation agents to
calculate interest rates on floating rate notes. Unless otherwise specified in a
pricing supplement, The Bank of New York will be the calculation agent for each
senior note that is a floating rate note. The First National Bank of Chicago
will be the calculation agent for each subordinated note that is a floating rate
note. All determinations of interest by the calculation agents shall, in the
absence of manifest error, be conclusive for all purposes and binding on the
holders of the floating rate notes.
S-12
The interest rate on each floating 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, as specified in the applicable pricing
supplement.
Unless otherwise specified in the applicable pricing supplement, the
interest reset dates will be as follows:
- in the case of floating rate notes that reset daily, each business day;
- in the case of floating rate notes that reset weekly, other than Treasury
Rate notes, the Wednesday of each week;
- in the case of Treasury Rate notes that reset weekly and except as
provided below under "Treasury Rate Notes," the Tuesday of each week;
- in the case of floating rate notes that reset monthly, other than Eleventh
District Cost of Funds Rate notes, 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;
- in the case of floating rate notes that reset quarterly, the third
Wednesday of March, June, September and December of each year;
- in the case of floating rate notes that reset semiannually, the third
Wednesday of each of two months of each year specified in the applicable
pricing supplement; and
- in the case of floating rate notes that reset annually, the third
Wednesday of one month of each year specified in the applicable pricing
supplement.
If an interest reset date for any floating rate note would fall on a day that is
not a business day, such interest reset date shall be postponed to the next
succeeding business day. In the case of a LIBOR note, if postponement to the
next business day would cause the interest reset date to be in the next
succeeding calendar month, the interest reset date shall instead be the
immediately preceding business day. If an auction of direct obligations of
United States Treasury bills falls on a day that is an interest reset date for
Treasury Rate notes, the interest reset date shall be the succeeding business
day.
Unless otherwise specified in the applicable pricing supplement and except
as set forth below, the rate of interest that goes into effect on any interest
reset date shall be determined on a rate determination date preceding such
interest reset date, as further described below. Such rate determination date
may be referred to as follows:
- 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 determination date in the case of
an Eleventh District Cost of Funds Rate note.
S-13
Unless otherwise specified in the applicable pricing supplement, interest
payable in respect of floating rate notes shall be the interest accrued from and
including the original 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.
Accrued interest on a floating rate note with more than one interest reset
date will be calculated by multiplying the principal amount of the note by an
accrued interest factor. If 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. Unless otherwise specified in the applicable pricing supplement, the
interest factor for each such day will be computed by dividing the interest rate
in effect on such day by 360, in the case of LIBOR notes, Prime Rate notes, J.J.
Kenny Rate notes, Eleventh District Cost of Funds Rate notes, Commercial Paper
Rate notes, Federal Funds Rate notes and CD Rate notes. In the case of Treasury
Rate notes, the interest factor for each such day will be computed by dividing
such interest rate by the actual number of days in the 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 date will be the applicable rate as reset on such
date.
For all other floating rate notes, accrued interest will be calculated by
multiplying the principal amount of the note by the interest rate in effect
during the period for which accrued interest is being calculated. 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
LIBOR notes, Prime Rate notes, J.J. Kenny Rate notes, Eleventh District Cost of
Funds Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes and CD
Rate notes. In the case of Treasury Rate notes, 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.
Unless otherwise specified in the applicable pricing supplement, all
percentages resulting from any calculation of the rate of interest on a floating
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. All
currency amounts used in, or resulting from, such calculation on floating rate
notes will be rounded to the nearest one-hundredth of a unit. For purposes of
such rounding, .005 of a unit shall be rounded upward.
Unless otherwise indicated in the applicable pricing supplement and except
as provided below, interest will be payable as follows.
- In the case of Floating Rate notes that reset daily, weekly or monthly,
other than Eleventh District Cost of Funds Rate notes, interest will be
payable on the third Wednesday of each month or on the third Wednesday of
March, June, September and December of each year, as specified in the
applicable pricing supplement.
- In the case of Eleventh District Cost of Funds Rate notes, interest will
be payable on the first calendar day of each March, June, September and
December, as specified in the applicable pricing supplement.
- In the case of floating rate notes that reset quarterly, interest will be
payable on the third Wednesday of March, June, September, and December of
each year.
- In the case of floating 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.
- In the case of floating 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.
S-14
In each of these cases, interest will also be payable at maturity or on an
interest payment date.
If an interest payment date for any floating rate note would fall on a day
that is not a business day, such interest payment date shall be postponed to the
next succeeding business day. In the case of a LIBOR 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 shall instead be the
immediately preceding business day.
If for any floating 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, such
interest payment date will not be postponed. Despite the foregoing, any payment
required to be made in respect of such floating rate note may be made on the
next succeeding business day with the same force and effect as if made on such
date. No additional interest shall accrue as a result of such delayed payment.
Upon the request of the holder of any floating rate note, the calculation
agent for such note will provide the interest rate then in effect and, if
determined, the interest rate that will become effective on the next interest
reset date for such floating rate note.
CD Rate Notes. Each CD Rate note will bear interest for each interest reset
period at the interest rate calculated with reference to the CD Rate and the
spread or spread multiplier, if any, specified in such note and in the
applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the CD Rate
for each interest reset period shall be the rate as of the CD Rate determination
date, which is the second business day prior to the interest reset date for such
interest reset period for negotiable certificates of deposit having the index
maturity designated in the applicable pricing supplement as published in
H.15(519) under the heading "CDs (Secondary Market)."
The following procedures will be followed if the CD 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 pertaining to such CD Rate determination date,
then the CD Rate for such interest reset period will be the rate on such
CD Rate determination date for negotiable certificates of deposit of the
index maturity designated in the applicable pricing supplement as
published in the H.15 Daily Update.
- If by 3:00 p.m., New York City time, on such calculation date, the above
rate is not yet published in either H.15(519) or 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. Such rate 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 date of three leading nonbank dealers
in negotiable U.S. dollar certificates of deposit in The City of New York
selected by the calculation agent for such CD Rate note for negotiable
certificates of deposit of major United States money center banks of the
highest credit standing, in the market for negotiable certificates of
deposit, with a remaining maturity closest to the index maturity
designated in the pricing supplement in a denomination of $5,000,000.
- If the dealers selected as aforesaid by such calculation agent, however,
are not quoting offered rates as mentioned in the preceding sentence, the
CD Rate for such interest reset period will be the same as the CD Rate for
the immediately preceding interest reset period. If there was no such
interest reset period, the CD Rate will be the initial interest rate.
CD Rate notes, like other notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
S-15
Commercial Paper Rate Notes. Each Commercial Paper Rate note will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Commercial Paper Rate and the spread or spread multiplier, if
any, specified in such note and in the applicable pricing supplement.
Unless otherwise specified in 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 of the Commercial Paper
Rate determination date, which is the second business day prior to the interest
reset date for such interest reset period. Such Commercial Paper Rate shall be
the money market yield on such Commercial Paper Rate determination date of the
rate for commercial paper having the index maturity specified in the applicable
pricing supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper--Nonfinancial."
The following procedures will be followed if the Commercial 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 pertaining to such Commercial Paper Rate
determination date, then the Commercial Paper Rate for such interest reset
period shall be the money market yield on such Commercial Paper Rate
determination date of the rate for commercial paper of the specified index
maturity as published in the H.15 Daily Update under the heading
"Commercial Paper--Nonfinancial."
- If by 3:00 p.m., New York City time, on such calculation date the above
rate is not yet published in either H.15(519) or in the H.15 Daily Update,
then the Commercial Paper Rate for such interest reset period shall be the
money 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 date, of three leading dealers of commercial paper in The
City of New York selected by the calculation agent for such Commercial
Paper Rate note for commercial paper of the specified index maturity
placed for an industrial issuer whose bonds are rated "AA" or the
equivalent by a nationally recognized rating agency.
- If the dealers selected as aforesaid by such calculation agent, however,
are not quoting offered rates as mentioned in the preceding sentence, the
Commercial Paper Rate for such interest reset period will be the same as
the Commercial Paper Rate for the immediately preceding interest reset
period. If there was no such interest reset period, the Commercial Paper
Rate will be the initial interest rate.
Money market yield shall be a yield calculated in accordance with the following
formula:
DX360
money market yield = ----------- X100
360-(DXM)
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.
Federal Funds Rate Notes. Each Federal Funds Rate note will bear interest
for each interest reset period at the interest rate calculated with reference to
the Federal Funds Rate and the spread or spread multiplier, if any, specified in
such note and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the Federal
Funds Rate for each interest reset period shall be the effective rate as of the
Federal Funds Rate determination date, which is the second business day prior to
the interest reset date for such interest reset period, for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)."
S-16
The following procedures will be followed if the Federal 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 pertaining to such Federal Funds Rate
determination date, the Federal Funds Rate for such interest reset period
shall be the rate on such Federal Funds Rate determination date as
published in the H.15 Daily Update under the heading "Federal
Funds/Effective Rate."
- If by 3:00 p.m., New York City time, on such calculation date the above
rate is not yet published in either H.15(519) or in the H.15 Daily Update,
then the Federal Funds Rate for such interest reset period shall be the
rate on such Federal Funds Rate determination date made publicly available
by the Federal Reserve Bank of New York which is equivalent to the rate
which appears in H.15(519) under the heading "Federal Funds (Effective)."
- 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, the Federal Funds Rate for such interest reset period
will be the same as the Federal Funds Rate in effect for the immediately
preceding interest reset period. If there was no such interest reset
period, the Federal Funds Rate will be the initial interest rate.
In the case of a Federal Funds Rate note that resets daily, the interest
rate on such note for the period from and including a Monday to but excluding
the succeeding Monday will be reset by the calculation agent for such note on
such second Monday, or, if not a business day, on the next succeeding business
day, to a rate equal to the average of the Federal Funds Rates in effect for
each such day in such week.
LIBOR Notes. Each LIBOR note will bear interest for each interest reset
period at the interest rate calculated with reference to LIBOR and the spread or
spread multiplier, if any, specified in such note and in the applicable pricing
supplement.
LIBOR for each interest reset period will be determined by the calculation
agent for such LIBOR notes as follows.
- On a LIBOR determination date, which is the second London banking day
prior to the interest reset date for such interest reset period, the
calculation agent for such LIBOR note will determine the offered rates for
deposits in the specified currency for the period of the index maturity
specified in the applicable pricing supplement, commencing on such
interest reset date, which appear on the designated LIBOR page at
approximately 11:00 a.m., London time, on such LIBOR determination date.
- If "LIBOR Telerate" is designated in the applicable pricing supplement,
"designated LIBOR page" means the display designated as page "3750" on the
Bridge Telerate Service, or such other page as may replace page "3750" on
such service or such other service as may be nominated by the British
Bankers' Association for the purpose of displaying 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.
- If "LIBOR Reuters" is designated in the applicable pricing supplement,
designated LIBOR page means the display designated as page "LIBO" on the
Reuters Monitor Money Rates Service, or such other page as may replace the
LIBO page on such service or such other service as may be nominated by the
British Bankers' Association for the purpose of displaying 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.
S-17
If LIBOR cannot be determined as above, either because the designated LIBOR
page is no longer available or because less than two rates appear on page "LIBO"
on the Reuters Monitor Money Rate Services, then on such LIBOR determination
date, the calculation agent will determine LIBOR as follows.
- The calculation agent for such LIBOR note will request the principal
London offices of each of four major banks in the London interbank
market selected by such calculation agent to provide such calculation
agent with its 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 such LIBOR determination
date. Such offered quotations will be in a principal amount equal to an
amount of not less than $1,000,000 or its approximate equivalent in the
specified currency that is representative of a single transaction in
such market at such time.
- If at least two such quotations are provided, LIBOR for such interest
reset period will be the arithmetic mean of such quotations.
- If fewer than two such quotations are provided, LIBOR for such Interest
Reset Period will be the arithmetic mean of rates quoted by three major
banks in The City of New York selected by the calculation agent for
such LIBOR note at approximately 11:00 a.m., New York City time, on
such LIBOR determination date for loans in the specified currency to
leading European banks, for the period of the specified index maturity,
commencing on such interest reset date, and in a principal amount equal
to an amount of not less than $1,000,000 or the approximate equivalent
thereof in the specified currency that is representative of a single
transaction in such market at such time.
- If fewer than three banks selected as aforesaid by such calculation
agent are quoting rates as mentioned in this sentence, however, LIBOR
for such interest reset period will be the same as LIBOR for the
immediately preceding interest reset period. If there was no such
interest reset period, the LIBOR Rate will be the initial interest
rate.
Treasury Rate Notes. Each Treasury Rate note will bear interest for each
interest reset period at the interest rate calculated with reference to the
Treasury Rate and the spread or spread multiplier, if any, specified in such
note and in the applicable pricing supplement.
Unless "Constant Maturity" is specified or unless otherwise specified in the
applicable pricing supplement, the Treasury Rate for each interest reset period
will be the rate for the auction held on the Treasury Rate determination date
for such interest reset period of treasury securities, which shall be the direct
obligations of the United States that have the index maturity specified in the
applicable pricing supplement, as such rate appears on either Telerate page 56
or Telerate page 57 under the heading "AVGE INVEST YIELD."
S-18
The following procedures will be followed if the Treasury 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 pertaining to such Treasury Rate determination
date, the Treasury Rate for such interest reset period will be the auction
average rate, 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.
- If the results of the auction of treasury securities having the specified
index maturity are not published or reported as provided above by 3:00
p.m., New York City time, on such calculation date, or if no such auction
is held on such Treasury Rate determination date, then the Treasury Rate
for such interest reset period shall be calculated by the calculation
agent for such Treasury Rate note. Such Treasury Rate shall be a yield to
maturity, expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis, of 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.
- If the dealers selected as aforesaid by such calculation agent, however,
are not quoting bid rates as mentioned in this sentence, then the Treasury
Rate for such interest reset period will be the same as the Treasury Rate
for the immediately preceding interest reset period. If there was no such
interest reset period, the Treasury Rate will be the initial interest
rate.
The Treasury Rate determination date for each interest reset period will be
the day of the week in which the interest reset date for such interest reset
period falls on which treasury 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 which 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 date pertaining to the
interest reset period commencing in the next succeeding week. If an auction date
shall fall on any day that would otherwise be an interest reset date for a
Treasury Rate note, then such interest reset date shall instead be the business
day immediately following such auction date.
If "Constant Maturity" is specified in the applicable pricing supplement,
the Treasury Rate for each interest reset period will be the rate displayed on
the designated CMT Telerate page under the caption ". . . Treasury Constant
Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately
3:45 P.M.," under the column for the designated CMT maturity index for (1) if
the designated CMT Telerate page is 7051, the rate on such Constant Maturity
Treasury Rate determination date and (2) if the designated CMT Telerate page is
7052, the weekly or monthly average, as specified in the applicable pricing
supplement, for the week or the month, as applicable, ended immediately
preceding the week or month, as applicable, in which the related Constant
Maturity Treasury Rate determination date occurs.
The following procedures will be followed if such rate does not appear on
such designated CMT Telerate page.
- If such 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 Constant Maturity Treasury Rate
determination date will be such Treasury Constant Maturity Rate for the
designated CMT maturity index as published in the relevant H.15(519).
S-19
- If such rate is no longer published or is not published by 3:00 P.M., New
York City time, on the related calculation date, then the Treasury Rate on
such Constant Maturity Treasury Rate determination date will be such
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 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 that the calculation agent determines to be comparable to the
rate formerly displayed on the designated CMT Telerate page and published
in the relevant H.15(519).
- If such information is not provided by 3:00 P.M., New York City time, on
the related calculation date, then the Treasury Rate on the Constant
Maturity Treasury Rate determination date will be calculated by the
calculation agent. Such Treasury Rate will be a yield to maturity, based
on the arithmetic mean of the secondary market closing offer side prices
as of approximately 3:30 P.M., New York City time, on such Constant
Maturity Treasury Rate determination date reported, according to their
written records, by three leading U.S. government securities dealers in
The City of New York selected by the calculation agent, one of which may
be the agent, from five such dealers selected by the calculation agent and
eliminating the highest quotation, or in the event of equality, one of the
highest, and the lowest quotation, or, in the event of equality, one of
the lowest, for Treasury notes, which shall 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.
- If the calculation agent is unable to obtain three such Treasury note
quotations, the Treasury Rate on such Constant Maturity Treasury Rate
determination date will be calculated by the calculation agent. Such
Treasury Rate will be a yield to maturity based on the arithmetic mean of
the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on such Constant Maturity Treasury Rate determination date
of three leading U.S. government securities dealers in the City of New
York, one of which may be the agent, from five such dealers selected by
the calculation agent and eliminating the highest quotation, or, in the
event of equality, one of the highest, and the lowest quotation, or, in
the event of equality, one of the lowest, 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 three or four, and not five, of such dealers are quoting as described
above, then the 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. However, if fewer than three dealers so
selected by the calculation agent are quoting as mentioned above, the
Treasury Rate determined as of such Constant Maturity Treasury Rate
determination date will be the Treasury Rate in effect on such Constant
Maturity Treasury Rate determination date.
- If two Treasury notes with an original maturity as described in the third
preceding sentence have remaining terms to maturity equally close to the
designated CMT maturity index, the calculation agent will obtain
quotations for the Treasury note with the shorter remaining term to
maturity and will use such quotations to calculate the Treasury Rate as
set forth above.
"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
S-20
Constant Maturities as reported in H.15(519). If no such page is specified in
the applicable pricing supplement, the designated CMT Telerate page shall 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 shall be two
years.
"The Constant Maturity Treasury Rate determination date" shall be the second
business day prior to the interest reset date for the applicable interest reset
period.
The CMT Rate for a Treasury security maturity as published as of any
business day is intended to be indicative of the yield of a U.S. Treasury
security having as of such business day a remaining term to maturity equivalent
to such maturity. The CMT Rate as of any business 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 agents or other affiliates of 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.
Prime Rate Notes. Prime Rate notes will bear interest at the interest
rates, calculated with reference to the Prime Rate and the spread or spread
multiplier, if any, specified in the Prime Rate notes and in the applicable
pricing supplement.
Unless otherwise indicated in the applicable pricing supplement, the Prime
Rate for each interest reset period will be determined by the calculation agent
for such Prime Rate note as of the Prime Rate determination date, which is the
second business day prior to the interest reset date for such interest reset
period. The Prime Rate shall be the rate made available and subsequently
published on such date in H.15(519) under the heading "Bank Prime Loan."
The following procedures will be followed if the Prime Rate cannot be
determined as described above.
- If the above 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
such Prime Rate determination date as published in the H.15 Daily Update
opposite the caption "Bank Prime Loan."
- If the above rate is not published prior to 3:00 P.M., New York City time,
on the related calculation date, in either H.15(519) or the H.15 Daily
Update, then the Prime Rate shall be the arithmetic mean of the rates of
interest publicly announced by each bank that appears on the Reuters
Screen USPRIME1 Page as such bank's prime rate or base lending rate as in
effect for such Prime Rate determination date.
- If fewer than four such rates appear on the Reuters Screen USPRIME1 Page
for such Prime Rate determination date, then the Prime Rate shall be the
arithmetic mean of the prime rates quoted 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 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 four such quotations are so provided, then the Prime Rate
shall be the arithmetic mean of four prime rates quoted 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 such Prime Rate determination date as furnished in
The City of New York by the major money center banks, if any, that have
provided
S-21
such quotations and by a reasonable number of substitute banks or trust
companies. Each such substitute bank or trust company selected by the
calculation agent to provide such rate or rates must
(1) be organized and doing business under the laws of the United States,
or any state of the United States;
(2) have total equity capital of at least $500,000,000; and
(3) be regulated by federal or state authority.
However, if the banks or trust companies so selected by the calculation agent
are not quoting as mentioned in the previous sentence, the Prime Rate will be
the Prime Rate in effect on such Prime Rate determination date.
"Reuters Screen USPRIME1 page" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service, or any successor service,
or such other page as may replace the USPRIME1 Page on the Reuters Monitor Money
Rates Service, or any successor service, for the purpose of displaying prime
rates or base lending rates of major United States banks.
J.J. Kenny Rate Notes. J.J. Kenny Rate notes will bear interest at the
interest rates, calculated based on the J.J. Kenny Rate and the spread and/or
spread multiplier, if any, specified in the J.J. Kenny Rate notes and in the
applicable pricing supplement.
Unless otherwise indicated in the applicable pricing supplement, 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 of the "J.J. Kenny Rate determination
date." Such J.J. Kenny Rate determination date is the second business day prior
to the interest reset date for such interest reset period. The J.J. Kenny Rate
shall be the per annum rate on such date equal to the index made available and
subsequently published by Kenny Information Systems or its successor, based upon
30-day yield evaluations at par of bonds, the interest on which is excludable
from gross income for federal income tax purposes under the Internal Revenue
Code of 1986 (the "Code"), of not less than five "high grade" component issuers.
Kenny Information Systems shall select such issuers from time to time, including
issuers of general obligation bonds. However, the bonds on which the index is
based shall not include any bonds the interest on which may trigger an
"alternate minimum tax" or similar tax under the Code, unless such tax may be
imposed on all tax-exempt 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 pertaining to such J.J. Kenny Rate determination date, the J.J.
Kenny Rate shall be the rate quoted by a successor indexing agent selected by
Citigroup equaling the prevailing rate for bonds rated in the highest short-term
rating category by Moody's Investors Service, Inc. and Standard & Poor's
Corporation in respect of issuers selected by such successor indexing agent most
closely resembling the "high grade" component issuers selected by Kenny
Information Systems that may be tendered by their holders for purchase on not
more than seven days' notice and the interest on which:
- is variable on a weekly basis;
- is excludable from gross income for federal income tax purposes under the
Code; and
- does not give rise to an "alternate minimum tax" or similar tax under the
Code, unless all tax-exempt bonds give rise to such a tax.
However, if a successor indexing agent is not available, the J.J. Kenny Rate for
such J.J. Kenny Rate determination date will be the J.J. Kenny Rate for the
immediately preceding interest reset period. If there was no such interest reset
period, the J.J. Kenny Rate will be the initial interest rate.
S-22
Eleventh District Cost of Funds Rate Notes. Eleventh District Cost of Funds
Rate notes will bear interest at the interest rates, calculated based on the
Eleventh District Cost of Funds Rate and the spread and/or spread multiplier, if
any, specified in the Eleventh District Cost of Funds Rate notes and in the
applicable pricing supplement.
Unless otherwise indicated in an applicable pricing supplement, 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 as of
the Eleventh District Cost of Funds Rate determination date. Such Eleventh
District Cost of Funds Rate determination date is the last working day of the
month immediately prior to such interest reset date for such interest reset
period on which the Federal Home Loan Bank of San Francisco publishes the
Eleventh District Cost of Funds Index (as defined below). The Eleventh District
Cost of Funds Rate shall 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 date as set forth under the caption "Eleventh District" on
the Telerate page 7058. Such page shall be deemed to include any successor page,
as determined by the calculation agent, as of 11:00 A.M., San Francisco time, on
such Eleventh District Cost of Funds interest determination date.
The following procedures will be followed if the Eleventh District Cost of
Funds Rate cannot be determined as described above.
- If such rate does not appear on Telerate page 7058 on any related Eleventh
District Cost of Funds Rate determination date, the Eleventh District Cost
of Funds Rate for such Eleventh District Cost of Funds Rate determination
date shall be the Eleventh District Cost of Funds Rate Index. Such
Eleventh District Cost of Funds Rate Index shall 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 by the FHLB of
San Francisco as such cost of funds for the calendar month preceding the
date of such announcement.
- 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, then the Eleventh District Cost of Funds Rate for such
Eleventh District Cost of Funds Rate determination date 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. Any floating rate note may be designated in
the applicable pricing supplement as an inverse floating rate note. In such an
event, unless otherwise specified in the applicable pricing supplement, the
interest rate on such floating rate note will be equal to:
- in the case of the period, if any, commencing on the issue date, or the
date on which such note otherwise begins to accrue interest if different
from the issue date, up to the first interest reset date, a fixed rate of
interest established by Citigroup as described in the applicable pricing
supplement; and
- in the case of each period commencing on an interest reset date, a fixed
rate of interest specified in the pricing supplement minus the interest
rate determined based on the base rate as adjusted by the spread and/or
spread multiplier, if any.
However, on any inverse floating rate note (1) the interest rate will not be
less than zero and (2) the interest rate in effect for the ten days immediately
prior to the date of maturity of such inverse floating rate note will be that in
effect on the tenth day preceding such date.
S-23
Floating Rate/Fixed Rate Notes. The applicable pricing supplement may
provide that a note will be a floating rate note for a specified portion of its
term and a fixed rate note for the remainder of its term. In such an event, the
interest rate on such note will be determined as provided in this prospectus
supplement as if it were a floating rate note and a fixed rate note for each
such respective period, all as specified in such applicable pricing supplement.
SUBSEQUENT INTEREST PERIODS
The pricing supplement relating to each note will indicate whether Citigroup
has the option to reset the interest rate, in the case of a fixed rate note, for
such note or the spread, spread multiplier, or method of calculation, in the
case of a floating rate note, for such note. If Citigroup has the option to
reset, the pricing supplement will also indicate the optional reset date or
dates on which such interest rate or such spread, spread multiplier, or method
of calculation, as the case may be, may be reset.
Citigroup shall notify the trustee for a note whether or not it intends to
exercise such option relating to such note at least 45 but not more than 60 days
prior to an optional reset date for such note. Not later than 40 days prior to
such optional reset date, the trustee for such note will mail to the holder of
such note a reset notice first class, postage prepaid, indicating whether
Citigroup 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. If Citigroup elects to reset the interest rate, the
spread, spread multiplier or method of calculation, the trustee shall 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 shall also indicate the provisions, if any, for
redemption during the subsequent interest period, which is the period from such
optional reset date to the next optional reset date or, if there is no such next
optional reset date, to the stated maturity of such 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. Upon the
transmittal by the Trustee of a reset notice to the holder of a note, such new
interest rate or such new spread, spread multiplier, and/or method of
calculation as the case may be, shall take effect automatically. Except as
modified by the reset notice and as described below, such note will have the
same terms as prior to the transmittal of such reset notice.
Despite the foregoing, not later than 20 days prior to an optional reset
date for a note, Citigroup may, at its option, revoke the interest rate, in the
case of a fixed rate note, or the spread or spread multiplier, in the case of a
floating rate note, provided for in the reset notice relating to such optional
reset date and establish a higher interest 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 subsequent interest period commencing on such optional reset date.
Citigroup can make such revocations by causing the trustee for such note to mail
notice of such higher interest rate or higher spread or spread multiplier, as
the case may be, first class, postage prepaid, to the holder of such note. Such
notice shall be irrevocable. All notes for which the interest rate or spread or
spread multiplier is reset on an optional reset date will bear such higher
interest rate, in the case of fixed rate notes, or higher spread or spread
multiplier, in the case of floating rate notes, whether or not tendered for
repayment.
The holder of a note will have the option to elect repayment of such note by
Citigroup on each optional reset date at a price equal to the principal amount
of such note plus interest accrued to such optional reset date. In order for a
note to be repaid on an optional reset date, the holder of such note must follow
the procedures set forth below under "Optional Redemption, Repayment and
Repurchase" for optional repayment. However, the period for delivery of such
note or notification to the trustee for such note shall be at least 25 but not
more than 35 days prior to such optional reset date. Further, a holder who has
tendered a note for repayment pursuant to a reset notice may, by written notice
to the
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trustee for such note, revoke any such tender for repayment until the close of
business on the tenth day prior to such optional reset date.
AMORTIZING NOTES
Citigroup may from time to time offer amortizing notes on which a portion or
all the principal amount is payable prior to stated maturity
- in accordance with a schedule;
- by application of a formula; or
- based on an index.
Further information concerning additional terms and conditions of any amortizing
notes, including terms for repayment of such notes, will be set forth in the
applicable pricing supplement.
INDEXED NOTES
Citigroup may from time to time offer indexed notes on which certain or all
interest payments, in the case of an indexed rate note, and/or the principal
amount payable at stated maturity or earlier redemption or retirement, in the
case of an indexed principal note, is determined based on:
- the principal amount of such notes or, in the case of an indexed principal
note, the amount designated in the applicable pricing supplement as the
"face amount" of such indexed note; and
- an index, which may be based on
(1) prices, changes in prices, or differences between prices, of
securities, currencies, intangibles, goods, articles or commodities;
(2) the application of a formula; or
(3) an index which shall be such other objective price, economic or other
measures as are described in the applicable pricing supplement.
A description of the index used in any determination of an interest or principal
payment, and the method or formula by which interest or principal payments will
be determined based on such index, will be set forth in the applicable pricing
supplement.
If a fixed rate note, floating rate note or indexed rate note is also an
indexed principal note, the amount of any interest payment will be determined
based on the face amount of such indexed note unless specified otherwise in the
applicable pricing supplement. If an indexed note is also an indexed principal
note, the principal amount payable at stated maturity or any earlier redemption
or repayment of the indexed note may be different from the face amount.
If a third party is appointed to calculate or announce the index for a
particular indexed note and this third party either suspends the calculation or
announcement of such index or changes the basis upon which such index is
calculated, in a manner that is inconsistent with the applicable pricing
supplement, then Citigroup will select another third party to calculate or
announce the index. The agent or another affiliate of Citigroup may be either
the original or successor third party selected by Citigroup. If for any reason
such index cannot be calculated on the same basis and subject to the same
conditions and controls as applied to the original third party, then the indexed
interest payments, if any, or any indexed principal amount of such indexed note
will be calculated in the manner set forth in the applicable pricing supplement.
Any determination by the selected third party will be binding on all parties,
except in the case of an obvious error.
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Unless otherwise specified in the applicable pricing supplement, for the
purpose of determining whether holders of the requisite principal amount of
notes outstanding under the applicable indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
indexed notes will be deemed to be the face amount stated on such notes. Unless
otherwise specified in the applicable pricing supplement, in the event of an
acceleration of the stated maturity of an indexed note, the principal amount
payable to the holder of such note upon acceleration will be the principal
amount determined based on the formula by which the principal amount of such
note would be determined on the stated maturity of such note, as if the date of
acceleration were the stated maturity.
An investment in indexed notes entails significant risks, including wide
fluctuations in market value as well as in the amounts of payments due, 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
note is indexed and economic and political events over which Citigroup 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. Accordingly, prospective investors should consult their own
financial and legal advisors as to the risks entailed by an investment in Indexedindexed
notes.
DUAL CURRENCY NOTES
Citigroup may from time to time offer dual currency notes as to which
Citigroup has a one time option of making all payments of principal, premium, if
any, and interest on a tranche consisting of all dual currency notes issued on
the same day and having the same terms, which payments 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. Information as to the
relative value of the specified currency compared to the optional payment
currency will be set forth in the applicable pricing supplement.
The pricing supplement for each issuance of dual currency notes will
specify, among other things,
- the specified currency of;
- the optional payment currency of; and
- the designated exchange rate for
such issuance.
Such designated exchange rate will be a fixed exchange rate used for
converting amounts denominated in the specified currency into amounts
denominated in the optional payment currency. The pricing supplement will also
specify the option election dates and interest payment dates for the related
issuance of dual currency notes. Each option election date will be a certain
number of days before an interest payment date or stated maturity, as set forth
in the applicable pricing supplement. Each option election date will be the date
on which Citigroup may select whether to make all scheduled payments due
thereafter in the optional payment currency rather than in the specified
currency.
If Citigroup makes such an election, the amount payable in the optional
payment currency shall be determined using the designated exchange rate
specified in the applicable pricing supplement. If such election is made, notice
of such election shall be mailed in accordance with the terms of the applicable
tranche of dual currency notes within two business days of the option election
date. Such notice shall state (1) the first date, whether an interest payment
date and/or stated maturity, on which scheduled payments in the optional payment
currency will be made and (2) the designated exchange rate. Any
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such notice by Citigroup, once given, may not be withdrawn. The equivalent value
in the specified currency of payments made after such an election may be less,
at the then current exchange rate, than if Citigroup had made such payment in
the specified currency.
For United States federal income tax purposes, holders of dual currency
notes may need to comply with rules which differ from the general rules
applicable to holders of other types of notes offered by this prospectus
supplement. The United States federal income tax consequences of the purchase,
ownership and disposition of dual currency notes will be set forth in the
applicable pricing supplement.
RENEWABLE NOTES
Citigroup may from time to time offer renewable notes, which will mature on
an initial maturity date. Such initial maturity date shall be an interest
payment date specified in the applicable pricing supplement occurring in or
prior to the twelfth month following the original issue date of such notes
unless the term of all or any portion of any such notes is renewed in accordance
with the procedures described below.
On the initial renewal date, which shall 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 initial
renewal date which, together with the initial renewal date, constitutes 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, the last month in a period
equal to twice the special election interval, after such renewal date, if the
holder of such renewable note elects to extend the term of such renewable note
or any portion as described below. If a holder does not elect to extend the term
of any portion of the principal amount of a renewable note during the specified
period prior to any renewal date, such portion will become due and payable on
the new maturity date. Such new maturity date shall be the interest payment date
occurring in the sixth month, or the last month in the special election
interval, after such renewal date.
A holder of a renewable note may elect to renew the term of such renewable
note, or if so specified in the applicable pricing supplement, any portion of
such renewable note, by delivering a notice to such effect to the trustee or any
duly appointed paying agent at the corporate trust office of the trustee or
agency of the trustee in The City of New York. Such notice shall be delivered
not less than 15 nor more than 30 days prior to such renewal date, unless
another period is specified in the applicable pricing supplement as the special
election period. Such election will be irrevocable and will be binding upon each
subsequent holder of such renewable note. An election to renew the term of a
renewable note may be exercised for less than the entire principal amount of
such renewable note only if so specified in the applicable pricing supplement
and only in such principal amount, or any integral multiple in excess of such
amount, as is specified in the applicable pricing supplement. Despite the
foregoing, the term of the renewable notes may not be extended beyond the stated
maturity specified for such renewable notes in the applicable pricing
supplement.
If the holder does not elect to renew the term, such renewable note must be
presented to the trustee, or any duly appointed paying agent. If such renewable
note is a certificate issued in definitive form, it must be presented to the
trustee as soon as practicable following receipt of such renewable note. The
trustee, or any duly appointed paying agent, shall issue in exchange for such
note, in the name of such holder, a note, in a principal amount equal to the
principal amount of such exchanged renewable note for which no election to renew
such term was exercised, with terms identical to those specified on such
renewable note, except that such note shall have a fixed, nonrenewable stated
maturity on the new maturity date.
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If an election to renew is made for less than the full principal amount of a
holder's renewable note, the trustee, or any duly appointed paying agent, shall
issue in exchange for such note in the name of such holder, a replacement
renewable note, in a principal amount equal to the principal amount elected to
be renewed of such exchanged renewable note, with terms otherwise identical to
such exchanged renewable note.
EXTENSION OF MATURITY
The pricing supplement relating to each note will indicate whether Citigroup
has the option to extend the stated maturity of such note for an extension
period. Such an extension period is one or more periods of whole years from one
to five, up to but not beyond the final maturity date set forth in such pricing
supplement.
Citigroup may exercise such option for a note by notifying the trustee for
such note at least 45 but not more than 60 days prior to the old stated maturity
of such note. Not later than 40 days prior to the old stated maturity of such
note, the trustee for such note will mail to the holder of such note an
"extension notice," first class, postage prepaid. The extension notice will set
forth:
- the election of Citigroup to extend the stated maturity of such note;
- the new stated maturity;
- in the case of a fixed rate note, the interest rate applicable to the
extension period;
- in the case of a floating rate note, the spread, spread multiplier or
method of calculation applicable to the extension period; and
- the provisions, if any, for redemption during the 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.
Upon the mailing by such trustee of an extension notice to the holder of a
note, the stated maturity of such note shall be extended automatically, and,
except as modified by the extension notice and as described in the next
paragraph, such note will have the same terms as prior to the mailing of such
extension notice. Despite the foregoing, not later than 20 days prior to the old
stated maturity of such note, Citigroup may, at its option, revoke the interest
rate, in the case of a fixed rate note, or the spread or spread multiplier, in
the case of a floating rate note, provided for in the extension notice for such
note and establish a higher interest 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. Citigroup may so act by causing the trustee for such note
to mail notice of such higher interest rate or higher spread or spread
multiplier, as the case may be, first class, postage prepaid, to the holder of
such note. Such notice shall be irrevocable. All notes for which the stated
maturity is extended will bear such higher interest rate, in the case of fixed
rate notes, or higher spread or spread multiplier, in the case of floating rate
notes, for the extension period, whether or not tendered for repayment.
If Citigroup extends the stated maturity of a note, the holder of such note
will have the option to elect repayment of such note by Citigroup on the old
stated maturity at a price equal to the principal amount of such note, plus
interest accrued to such date. In order for a note to be repaid on the old
stated maturity once Citigroup has extended its stated maturity, the holder of
such note must follow the procedures set forth below under "Optional Redemption,
Repayment and Repurchase" for optional repayment. The period for delivery of
such note or notification to the trustee for such note shall be at least 25 but
not more than 35 days prior to the old stated maturity. A holder who has
tendered a note for repayment pursuant to an extension notice may give written
notice to the trustee for such note to revoke any such tender for repayment
until the close of business on the tenth day before the old stated maturity.
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COMBINATION OF PROVISIONS
If so specified in the applicable pricing supplement, any note may be
required 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 unless the rules of DTC state otherwise, all book-entry
notes having the same original issue date and otherwise identical terms will be
represented by a single global security. Each global security representing
book-entry notes will be deposited with, or on behalf of DTC and registered in
the name of a nominee of DTC. Book-entry notes will not be exchangeable for
certificated notes and, except under the circumstances described in the
prospectus under "Description of Debt Securities--Book-Entry Procedures And
Settlement For Debt Securities," will not otherwise be issuable as certificated
notes.
If an issue of notes is denominated in a currency other than the U.S.
dollar, Citigroup will make payments of principal and any interest in the
foreign currency in which the notes are denominated 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
notes is held that it elects, in accordance with and to the extent permitted by
the applicable pricing supplement and the revelant note, to receive such payment
of principal or interest in the foreign currency. On or prior to the third
business day after the record date for payment of interest and twelve days prior
to the date for payment of principal, such participant shall notify DTC of (1)
its election to receive all, or the specified portion, of such payment in the
foreign currency and (2) its instructions for wire transfer of such payment to a
foreign currency account.
A further description of DTC's procedures regarding global securities
representing book-entry notes is set forth in the prospectus under "Description
of Debt Securities--Book-Entry Procedures And Settlement For Debt Securities."
DTC has confirmed to Citigroup, the agent and the trustee that it intends to
follow such procedures.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The pricing supplement relating to each note will indicate either that (1)
such note cannot be redeemed prior to its stated maturity or (2) that such note
will be redeemable at the option of Citigroup, in whole or in part. The
applicable pricing supplement will also indicate (1) the optional redemption
date or dates on which such note may be redeemed and (2) the redemption price at
which, together with accrued interest to such optional redemption date, such
note may be redeemed on each such optional redemption date.
Unless otherwise specified in the applicable pricing supplement, at least 30
days prior to the date of redemption, such trustee shall mail notice of such
redemption, first class, postage prepaid, to the holder of such note. Unless
otherwise specified in the applicable pricing supplement, Citigroup may exercise
such option relating to a redemption of a note in part only by notifying the
trustee for such note at least 45 days prior to any optional redemption date. In
the event of redemption of a note in part only, a new note or notes for the
unredeemed portion of such note or notes shall be issued to the holder of such
note or notes upon the cancellation of such note or notes. The notes, other than
amortizing notes, may not be redeemed.
The pricing supplement relating to each note will also indicate whether the
holder of such note will have the option to elect repayment of such note by
Citigroup prior to its stated maturity. If so, such pricing supplement will
specify (1) the optional repayment date or dates on which such note may be
repaid and (2) the optional repayment price. Such optional repayment price is
the price at which,
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together with accrued interest to such optional repayment date, such note may be
repaid on each such optional repayment date.
In order for a note to be repaid, the trustee for such note must receive, at
least 30 but not more than 45 days prior to an optional repayment date:
(1) such note with the form entitled "Option to Elect Repayment" on the
reverse of such note duly completed; or
(2) a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States
setting forth:
- the name of the holder of such note;
- the principal amount of such note to be repaid;
- the certificate number or a description of the tenor and terms of
such note;
- a statement that the option to elect repayment is being exercised;
and
- a guarantee that the note to be repaid with the form entitled
"Option to Elect Repayment" on the reverse of the note duly
completed will be received by such trustee not later than five
business days after the date of such telegram, telex, facsimile
transmission or letter.
If the guarantee procedure described in clause (2) above is followed, then
such note and form duly completed must be received by such trustee by such fifth
business day. Any tender of a note by the holder for repayment, except pursuant
to a reset notice or an extension notice, shall be irrevocable. The repayment
option may be exercised by the holder of a note for less than the entire
principal amount of such note, provided, that the principal amount of such note
remaining outstanding after repayment is an authorized denomination. Upon such
partial repayment, such note shall be canceled and a new note or notes for the
remaining principal amount shall be issued in the name of the holder of such
repaid note.
If a note is represented by a global security, DTC's nominee will be the
holder of such note and, therefore, will be the only entity that can exercise a
right to repayment. In order to ensure that DTC's nominee will timely exercise a
right to repayment relating to a particular note, the beneficial owner of such
note must instruct the broker or other direct or indirect participant through
which it holds an interest in such note to notify DTC of its desire to exercise
a right to repayment. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner should
consult the broker or other direct or indirect participant through which it
holds an interest in a note 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 DTC.
If Citigroup redeems or repays a note that is an OID note other than an
indexed note prior to its stated maturity, then Citigroup will pay the amortized
face amount of the note as of the date of redemption or repayment, even if there
are statements in this prospectus that would lead you to believe otherwise.
The preceding sentence does not apply if Citigroup chooses to redeem such
notes.
The amortized face amount of a note on any date means the amount equal to:
- the issue price set forth on the face of the applicable pricing supplement
plus
- that portion of the difference between the issue price and the stated
principal amount of the note that has accrued by that date at
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(1) the bond yield to maturity set forth on the face of the applicable
pricing supplement or
(2) if so specified in the applicable pricing supplement, the bond yield
to call set forth on the face of the note.
These computations will be made in accordance with generally accepted United
States bond yield computation principles. However, the amortized face amount of
a note will never exceed its stated principal amount. The bond yield to call
listed on the face of a pricing supplement will be computed on the basis of:
- the first occurring optional redemption date with respect to such note;
and
- the amount payable on such optional redemption date.
In the event that any such note is not redeemed on such first occurring optional
redemption date, the bond yield to call that applies to such note shall be
recomputed on such optional redemption date on the basis of (1) the next
occurring optional redemption date and (2) the amount payable on such optional
redemption date. The bond yield to call shall continue to be so recomputed on
each succeeding optional redemption date until the note is so redeemed.
Citigroup may at any time purchase notes at any price in the open market or
otherwise. Notes so purchased by Citigroup may, at the discretion of Citigroup,
be held or resold or surrendered to the trustee for such notes for cancellation.
OTHER PROVISIONS
The terms in the applicable pricing supplement may modify any provisions
relating to:
- the determination of an interest rate basis;
- the specification of an interest rate basis;
- calculation of the interest rate applicable to, or the principal payable
at maturity on, any note;
- its interest payment dates; or
- any other related matters may be modified.
DEFEASANCE
The defeasance provisions described in the prospectus will not be applicable
to the notes.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
INTRODUCTION
The following is a summary of certain United States federal income tax
considerations that may be relevant to a holder of a Note.note. The summary is based
on (1) laws, (2) regulations, (3) rulings and (4) 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 may
apply, including without limitation,(1) banks, (2) tax-exempt entities, (3) insurance companies,
(4) regulated investment companies, (5) common trust funds, or(6) dealers in
securities or currencies, (7) 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 positions or (8) persons 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)(1) a U.S. court is able to exercise primary supervision over
the trust's administration and (ii)(2) 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.
UNITED STATES HOLDERS
PAYMENTS OF INTEREST
Payments of "qualifiedqualified 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
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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").Service. 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 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")(a) OID and (b) market discount and (2) reduced by any (a)
amortized premium (each as described below) and (b) 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 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,and,
if it so elects, a United States holder that uses the accrual method of tax
accounting)accounting, will determine the U.S. dollar value of the cost of such Notenote by
translating the amount paid at the spot rate of exchange on the settlement date
of the purchase. 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. 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, will determine the U.S. dollar value of the
amount realized by translating such amount at the spot rate of exchange on the
settlement date of the disposition. 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
S-33
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.
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note.
ORIGINAL ISSUE DISCOUNT
IN GENERAL.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 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 certain 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
tounder
certain 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 adjusted for the
length of the accrual period) and subtracting from that productless (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 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
S-34
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. For purposes of this prospectus
supplement: (1) "acquisition premium" means the excess of the purchase 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.
Certain of the Notesnotes 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.notes.
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 MINIMIS rule similar to the rule relating to
DE MINIMIS OID, described above. 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. 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.
S-35
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).year.
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. Certain 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 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. 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
S-36
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.
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," 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 Trusteetrustee will be required to file information returns with the IRS
with
respectrelating to payments made to certain 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.
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 combined voting power of all classes of stock of the CompanyCitigroup 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, 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 the Note. Notwithstandinga note.
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 realizing 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. status under penalties of perjury (or, with respect toor, for payments made after December
31, 1999, satisfies certain documentary evidence requirements for establishing
that it is a non-United States holder)person, or (2) otherwise establishes an
exemption.
S-37
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 certain 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, 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. 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. 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.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 tonotes.
For payments made after December 31, 1999, 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,trusts, the beneficial
owner means each of the ultimate beneficial owners of the entity.
S-32S-38
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 CompanyCitigroup will pay the Agentagent a commission of from not more than .125% to
not more than 3.000% of the principal amount of Notesnotes sold through it, depending
upon the Stated Maturity.
The Companystated maturity.
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.
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, 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 certain 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.
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,
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.
S-39
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
The validity of the notes will be passed upon for Citigroup by Stephanie B.
Mudick, Esq., General Counsel-Corporate Law of Citigroup, 153 East 53(rd)
Street, New York, New York 10043. Ms. Mudick, General Counsel-Corporate Law and
Assistant Secretary of Citigroup, beneficially owns, or has rights to acquire
under Citigroup's employee benefit plans, an aggregate of less than 1% of
Citigroup's common stock. Certain legal matters will be passed upon for the
agent by Dewey Ballantine LLP, New York, New York. Dewey Ballantine LLP has from
time to time acted as counsel for Citigroup 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 an aggregate of less than 1% of Citigroup's
common stock.
S-40
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$6,000,000,000
[LOGO]
MEDIUM-TERM SENIOR NOTES, SERIES A
MEDIUM-TERM SUBORDINATED NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
------------------
PROSPECTUS SUPPLEMENT
, 19981999
(INCLUDING PROSPECTUS
DATED , 1998)1999)
------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE 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.The information in this prospectus is not complete and may be changed. Citigroup
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, 1998FEBRUARY 10, 1999
PROSPECTUS
SECURITIES
CITIGROUP CAPITAL
% CAPITAL SECURITIES
$ LIQUIDATION AMOUNT
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CITIGROUP INC.
[LOGO]
---------------------
A brief description of the % Capital Securitiescapital securities can be found under
"Summary Information-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................................. $ $
Underwriting commissions to be paid by Citigroup
Inc................................................. (1) (1)
Proceeds to Citigroup 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
.
------------------------
, 19981999
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.
------------------------
TABLE OF CONTENTS
PAGE
-----
Summary Information-Q&A.................................................................................... 3
Risk Factors............................................................................................... 7
The Company................................................................................................6
Where You Can Find More Information........................................................................ 9
Citigroup Inc.............................................................................................. 10
Use of Proceeds............................................................................................ 10
Ratio of Income to Fixed Charges and Ratio of Income to Combined Fixed Charges Including Preferred Stock
Dividends................................................................................................ 11
Accounting Treatment....................................................................................... 11
Capitalization............................................................................................. 12
Description of the Capital Securities...................................................................... 13
Description of the Junior Subordinated Debt Securities..................................................... 25
Description of Guarantee................................................................................... 3334
Effect of Obligations Under the Junior Subordinated Debt Securities and the Guarantee...................... 3637
United States Federal Income Taxation...................................................................... 3738
ERISA Considerations....................................................................................... 4142
Underwriting............................................................................................... 4344
Legal Matters.............................................................................................. 4445
Experts.................................................................................................... 44
Available Information...................................................................................... 45
Incorporation of Certain Documents by Reference............................................................ 46
2
SUMMARY INFORMATION-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"). 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, 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's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSBCSSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, the CompanyCitigroup 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.Citigroup. The mailing address of Citigroup's
principal executive office is 153 East 53rd Street, 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 .
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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..
3
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-- SpecialSecurities--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 16.
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;
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junior subordinated debt
securities;
- its obligations under the Capital Securities Guarantee (the "Guarantee");capital securities guarantee; and
- its obligations under the Amended and Restated Declaration of Trust 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 36.
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--Voting Rights."
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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 .
5
RISK FACTORS
Your investment in the capital securities will involve several risks. You
should carefully consider the following discussion of risks, and the other
information in this prospectus, before deciding whether an investment in the
capital securities is suitable for you.
CITIGROUP IS NOT REQUIRED TO PAY YOU UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBT SECURITIES UNLESS IT FIRST MAKES OTHER REQUIRED PAYMENTS.
Citigroup's obligations under the junior subordinated debt securities will
rank junior to all of Citigroup's senior indebtedness as described on page 26.
This means that Citigroup cannot make any payments on the junior subordinated
debt securities if it defaults on a payment of senior indebtedness and does not
cure the 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 securities will be effectively subordinated to all existing and future
liabilities of Citigroup's subsidiaries.
Citigroup's obligations under the guarantee are subordinated to all of its
other liabilities as described on page 36.
This means that Citigroup cannot make any payments on the guarantee 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 guarantee only after Citigroup made all
payments on its other liabilities.
Neither the capital securities, the junior subordinated debt securities nor
the guarantee 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 securities and the guarantee. See
"Description of Guarantee--Status of the Guarantee" and "Description of the
Junior Subordinated Debt Securities--Subordination" on pages 36 and 26,
respectively.
CITIGROUP IS NOT REQUIRED TO PAY YOU UNDER THE GUARANTEE IF CITIGROUP CAPITAL
DOES NOT HAVE CASH AVAILABLE.
The ability of Citigroup Capital to make payments on the capital securities
is solely dependent upon Citigroup making the related payments on the junior
subordinated debt securities when due.
If Citigroup defaults on its obligations to make payments on the junior
subordinated debt securities, Citigroup Capital will not have sufficient funds
to make payments on the capital securities. In those circumstances, you will not
be able to rely upon the guarantee for payment of these amounts. Page 13
discusses your 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.
If distributions on the capital securities are deferred, you will be
required to recognize interest income for United States federal income tax
purposes in respect of your ratable share of the interest on the junior
subordinated debt securities held by Citigroup Capital before you receive any
cash distributions relating to this interest. In addition, you will not receive
this cash if you sold the capital 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 securities and believes that such deferral is a remote
possibility. However, if Citigroup exercises its right in the future, the
capital securities may trade at a price that does not fully reflect the value of
accrued
6
but unpaid interest on the junior subordinated debt securities. If you sell the
capital 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. In addition, the existence of Citigroup's right to defer payments of
interest on the junior subordinated debt securities may mean that the market
price for the capital securities, which represent an undivided beneficial
interest in the 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 38 for more information
regarding the tax consequences of purchasing, holding and selling the 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, the capital
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. See "Description of the Capital Securities--Distribution of the
Junior Subordinated Debt Securities" and "--Special Event Redemption" on pages
17 and 16, 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.
The 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
$ per capital security plus any accrued and unpaid distributions to the
redemption date. You should assume that this redemption option will be exercised
if Citigroup is able to refinance at a lower interest rate or it is otherwise in
the interest of Citigroup to redeem the junior subordinated debt securities. If
the junior subordinated debt securities are redeemed, Citigroup Capital must
redeem the capital securities and the common securities having an aggregate
liquidation amount equal to the aggregate principal amount of junior
subordinated debt securities to be redeemed. See "Description of the Capital
Securities--Mandatory Redemption of Trust Securities" and "Description of the
Junior Subordinated Debt Securities--Optional Redemption" on pages 15 and 27,
respectively.
THERE CAN BE NO ASSURANCE AS TO THE MARKET PRICES FOR THE CAPITAL SECURITIES OR
THE JUNIOR
SUBORDINATED DEBT SECURITIES; THEREFORE, YOU MAY SUFFER A LOSS.
We cannot give you any assurance as to the market prices for the capital
securities or the junior subordinated debt securities that may be distributed in
exchange for capital securities. Accordingly, the capital securities that an
investor may purchase, whether pursuant to the offer made by this prospectus or
in the secondary market, or the junior subordinated debt securities that a
holder of capital securities may receive in exchange for capital securities, may
trade at a discount to the price that the investor paid to purchase the capital
securities. As a result of the right to defer payments on the capital
securities, the market price of the capital securities may be more volatile than
the market prices of other securities to which such optional deferrals do not
apply.
THERE COULD BE AN ADVERSE TAX CONSEQUENCE TO YOU IF CITIGROUP TERMINATES
CITIGROUP CAPITAL AND DISTRIBUTES JUNIOR SUBORDINATED DEBT SECURITIES TO
HOLDERS, RESULTING IN POSSIBLE TAX AND LIQUIDITY CONSEQUENCES TO YOU.
Provided that Citigroup obtains any required regulatory approval, Citigroup
has the right to terminate Citigroup Capital at any time. If Citigroup decides
to exercise its right to terminate Citigroup
7
Capital, Citigroup Capital will redeem the capital securities and common
securities by distributing the junior subordinated debt securities to holders of
the capital securities and common securities on a ratable basis.
Under current United States federal income tax law, a distribution of junior
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 securities to you may be a
taxable event to you.
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 securities on the NYSE, or any other exchange on which the capital
securities are then listed, if they are distributed, Citigroup cannot assure you
that the junior subordinated debt securities will be approved for listing or
that a trading market will exist for those securities.
SINCE YOU HAVE LIMITED VOTING RIGHTS, YOU CANNOT PREVENT THE CITIGROUP CAPITAL
TRUSTEES FROM TAKING ACTIONS YOU MAY NOT AGREE WITH.
You will have limited voting rights. In particular, except for the limited
exceptions described below, only Citigroup can elect or remove any of Citigroup
Capital trustees. See "Description of the Capital Securities--Voting Rights" on
page 19.
8
WHERE YOU CAN YOU FIND MORE INFORMATION?
We fileINFORMATION
As required by the Securities Act of 1933, Citigroup and the subsidiary
trusts filed a registration statement (No. 333-68949) 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 Securities and Exchange Commission (the "SEC").SEC. You may read and copy any document we fileCitigroup
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.
If you would like
5
additional information about our Company, please refer to the information under
"Available Information" below.
The SEC allows usCitigroup to "incorporate by reference" the information we fileit
files with them,the SEC, which means that weit can disclose important information to
you by referring you to otherthose documents. The information incorporated by
reference is considered to be part of this Prospectus, and later information filedprospectus. Information that
Citigroup files with the SEC will automatically update and supersedethe information in this
information. We incorporateprospectus. 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 until our offering is
completed:1934:
(a) Annual Report on Form 10-K for the year ended December 31, 1997, as
amended;1997;
(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, 1998.1998, December 15, 1998 and January 25, 1999.
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 usCitigroup 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
RISK FACTORS
Your investment in the Capital Securities will involve certain risks. You
should carefully consider the following discussion of risks, and the other
information in this Prospectus, before deciding whether an investment in the
Capital Securities is suitable for you.
CITIGROUP'S OBLIGATIONS UNDER------------------------
YOU SHOULD ONLY RELY ON THE GUARANTEEINFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. CITIGROUP HAS NOT, AND THE JUNIOR SUBORDINATED DEBTUNDERWRITERS 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 ARE SUBORDINATED.
Citigroup's obligations under the Junior Subordinated Debt Securities will
rank junior in priority of payment to all of Citigroup's senior indebtedness.
This means that Citigroup cannot make any payments on the Junior Subordinated
Debt Securities if it defaults on a payment of senior indebtedness and does not
cure such 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 Securities will be effectively subordinated to all existing and future
liabilities of Citigroup's subsidiaries.
Citigroup's obligations under the Guarantee will rank in priority 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.
This means that Citigroup cannot make any payments on the Guarantee 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 Guarantee only after Citigroup made all
payments on its other liabilities.
Neither the Capital Securities, the Junior Subordinated Debt Securities nor
the Guarantee 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 Securities and the Guarantee. See
"Description of Guarantee--Status of the Guarantee" and "Description of the
Junior Subordinated Debt Securities--Subordination."IN ANY JURISDICTION WHERE THE GUARANTEE ONLY COVERS PAYMENTS IFOFFER OR SALE IS NOT PERMITTED.
YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS, AS WELL AS
INFORMATION CITIGROUP CAPITAL HAS CASH AVAILABLE.
The ability of Citigroup Capital to pay scheduled distributions on the
Capital Securities, the redemption price of the Capital Securities and the
liquidation amount of each Capital Security is solely dependent upon Citigroup
making the related payments on the Junior Subordinated Debt Securities when due.
If Citigroup defaults on its obligations to pay principal or interest on the
Junior Subordinated Debt Securities, Citigroup Capital will not have sufficient
funds to pay distributions, the redemption price or the liquidation amount of
each Capital Security. In those circumstances, you will not be able to rely upon
the Guarantee for payment of these amounts.
Instead, you:
- may directly sue Citigroup or seek other remedies to collect 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
DEFERRAL OF DISTRIBUTIONS WOULD HAVE TAX CONSEQUENCES FOR YOUPREVIOUSLY FILED WITH THE SECURITIES AND MAY AFFECT THE
TRADING PRICEEXCHANGE
COMMISSION AND INCORPORATED BY REFERENCE, IS ACCURATE AS 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 such 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 on your pro rata share of the interest on the
Junior Subordinated Debt Securities held by Citigroup Capital) before you
receive any cash relating to such interest. In addition, you will not receive
such cash if you sold the Capital 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 Securities and believes that such deferral is a remote
possibility. However, if Citigroup exercises its right in the future, the
Capital Securities may trade at a price that does not fully reflect the value of
accrued but unpaid interest on the Junior Subordinated Debt Securities. If you
sell the Capital 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. In addition, the existence of Citigroup's right to defer
payments of interest on the Junior Subordinated Debt Securities may mean that
the market price for the Capital Securities (which represent an undivided
beneficial interest in the Junior Subordinated Debt Securities) may be more
volatile than other securities that do not have these rights.
See "United States Federal Income Taxation" for more information regarding
the tax consequences of purchasing, holding and selling the Capital Securities.
CAPITAL SECURITIES MAY BE REDEEMED AT ANY TIME IF CERTAIN CHANGES IN TAX,
INVESTMENT COMPANY OR BANK REGULATORY LAW OCCUR.
If certain changes in tax, investment company or bank regulatory law occur
and are continuing, and certain other conditions 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 to be
redeemed 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--Distribution of the Junior Subordinated
Debt Securities" and "--Special Event Redemption."
CAPITAL SECURITIES MAY BE REDEEMED AT THE OPTIONDATE OF THE
COMPANY.
At the option of the Company, the Junior Subordinated Debt 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
plus any accrued and unpaid interest 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 its redemption option if the
Company is able to refinance at a lower interest rate or it is otherwise in the
interest of the Company to redeem the Junior Subordinated Debt Securities. If
the Junior Subordinated Debt Securities are redeemed, the Trust must redeem the
Capital Securities and the Common Securities having an aggregate liquidation
amount equal to the aggregate principal amount of Junior Subordinated Debt
Securities to be redeemed. See "Description of the Capital Securities--Mandatory
Redemption of Trust Securities."
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PENDING TAX LITIGATIONAPPLICABLE DOCUMENT. CITIGROUP'S BUSINESS, FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND PROSPECTS MAY RESULT IN A CHANGE IN TAX LAWHAVE CHANGED SINCE 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 to the Junior Subordinated Debt Securities. Based on
available information, the Company 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.
THERE CAN BE NO ASSURANCE AS TO THE MARKET PRICES FOR THE CAPITAL SECURITIES OR
THE JUNIOR SUBORDINATED DEBT SECURITIES.
There can be no assurance as to the market prices for the Capital Securities
or the Junior Subordinated Debt Securities that may be distributed in exchange
for Capital Securities upon a termination of Citigroup Capital. Accordingly, the
Capital Securities that an investor may purchase, whether pursuant to the offer
made by this Prospectus or in the secondary market, or the Junior Subordinated
Debt Securities that a holder of Capital Securities may receive upon a
termination of Citigroup Capital, may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered by this Prospectus. As
a result of Citigroup's right to defer interest payments on the Junior
Subordinated Debt 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) may
be more volatile than the market prices of other securities that are not subject
to such optional deferrals.
CITIGROUP MAY TERMINATE CITIGROUP CAPITAL AT ANY TIME.
Subject to obtaining any required regulatory approval, Citigroup has the
right to terminate Citigroup Capital at any time. If Citigroup decides to
exercise its right to terminate Citigroup Capital, Citigroup Capital will redeem
the Capital Securities and Common Securities by distributing the Junior
Subordinated Debt Securities to holders of the Capital Securities and Common
Securities on a pro rata basis.
Under current United States federal income tax law, a distribution of Junior
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 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.
Although Citigroup will use its best efforts to list the Junior Subordinated
Debt Securities on the NYSE (or any other exchange on which the Capital
Securities are then listed) if they are distributed, we cannot assure you that
the Junior Subordinated Debt Securities will be approved for listing or that a
trading market will exist for those securities.
YOU HAVE LIMITED VOTING RIGHTS.
You will have limited voting rights. In particular, subject to certain
exceptions, only Citigroup can elect or remove any of Citigroup Capital
Trustees. See "Description of the Capital Securities--Voting Rights."DATE.
9
THE COMPANYCITIGROUP INC.
Citigroup's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSBCSSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, the CompanyCitigroup 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.
The CompanyCitigroup.
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 bank regulatory authorities, thestate
insurance departments, of a number of states,
and various capital requirements imposed by securities regulators. The Company
isCertain of Citigroup's
subsidiaries have 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.
TheCitigroup's principal office of the Company is located at 153 East 53rd Street, 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 toto:
- fund the business of its operating units and tounits;
- fund investments in, or extensions of credit or capital contributions to,
its subsidiariessubsidiaries; and
to- lengthen 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)shows (1) the supplemental consolidated ratio of income
to fixed charges and (ii)(2) the supplemental consolidated ratio of income to
combined fixed charges including preferred stock dividends of the CompanyCitigroup 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
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 or subsidiary obligated mandatorily redeemable preferred
securities of subsidiary trusts holding solely junior subordinated debt
securities of--Company."
11
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, and as adjusted to give effect to the issuance of the
Capital Securities.capital securities.
AT SEPTEMBER 30, 1998
------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
(DOLLARS IN MILLIONS)
Debt:
Investment banking and brokerage borrowings.......................................... $ 16,128 $
Short-term borrowings................................................................ 19,492
Long-term debt....................................................................... 49,419
----------- -----------
Total debt......................................................................... 85,039
----------- -----------
Redeemable Preferred Stock--Series I................................................... 280
----------- -----------
Company or subsidiary obligated mandatorily redeemable preferred securities of
subsidiary trusts holding solely junior subordinated debt securities of--
Company.............................................................................. 1,200
Subsidiaries......................................................................... 2,620
Stockholders' equity:
Capital stock at aggregate liquidation value......................................... 2,313
Common stock and additional paid-in capital (net of treasury stock).................. 5,031
Retained earnings.................................................................... 35,746
Accumulated other changes in equity from nonowner sources............................ 593
Unearned compensation................................................................ (593)
----------- -----------
Total stockholders' equity......................................................... 43,090
----------- -----------
Total capitalization................................................................... $ 132,229 $
----------- -----------
----------- -----------
12
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,junior
subordinated debt securities, institute a proceeding directly against
the CompanyCitigroup 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.
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."
14
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."
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
Only Issuance--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 shall conform to the rules of any securities exchange on
which the Capital Securitiescapital securities are listed and, if none, the Regular Trusteesregular trustees shall
have the right to select relevant record dates, which shall 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""business day" shall mean 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 the 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 Securitiestrust securities shall 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 Only Issuance--The
Depository Trust Company" below. See "--Special Event Redemption" and
"Description of the Junior Subordinated Debt Securities--Optional Redemption."
15
SPECIAL EVENT REDEMPTION
"Tax Event" means that the Regular Trusteesregular trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a "Dissolution Tax Opinion") to the effect that, as a result of (a) anyany:
- amendment to, or change, (includingincluding any announced prospective change)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),prospectus,
in either case where such change or amendment becomes effective on or after the
date of this Prospectus,prospectus, 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 Trusteesregular trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practicing under the 1940Investment Company Act (as defined herein)of 1940 to the effect 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,
Lawwhich change becomes effective on or after the date of this Prospectus.prospectus.
"Regulatory Capital Event" means a determination by Citigroup, based on an
opinion of counsel experienced in such matters (who may be an employee of
Citigroup or any of its 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,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
16
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
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 Citigroup Capital gives a notice of redemption in respectregarding of the Capital
Securities (whichcapital
securities, which notice will be irrevocable),irrevocable, then, by 12:00 noon, New York City
time, on the redemption date, and 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, the Institutional Trusteeinstitutional 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
17
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 Only Issuance--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.
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 with such
Liquidation, Junior Subordinated Debt Securitiesliquidation, Citigroup 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 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 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 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.
18
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,trust securities; provided, that
pursuant to the Declarationdeclaration, 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 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'sinstitutional
trustee's rights under the Junior Subordinated Debt Securitiesjunior subordinated debt securities without first
instituting any legal proceeding against the Institutional Trusteeinstitutional trustee or any other
person or entity. 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 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 proceeding 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 Securitiesjunior subordinated debt
securities without first (i)(1) directing the Institutional Trusteeinstitutional trustee to enforce the
terms of the Junior Subordinated Debt
Securitiesjunior subordinated debt securities or (ii)(2) instituting a legal
proceeding against the CompanyCitigroup 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--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
19
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 CompanyCitigroup to enforce the
Institutional Trustee'sinstitutional trustee's rights under the Junior Subordinated Debt Securities
without first institutingjunior subordinated debt securities.
The record holder does not have to institute any legal proceeding against 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 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.
20
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 Only Issuance--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, 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;
21
(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)(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--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 hold interests in the global notes only
through DTC (if they are a participant in such system) or 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
("participants"). 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 whom
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."
22
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 physical (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 capital securities (physical
(paper) certificates) 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
(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 note that is exchangeable will be exchangeable in whole for definitive
notes in registered form, of like tenor and of an equal aggregate principal
amount, in denominations of $ and whole multiples of $ in excess of
that amount. Definitive notes 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 New York Banking
Law, a "banking organization" within the meaninglaws of the State
of 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 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.
DTC's management is aware that some computer applications, systems, and Exchange Commission.
Purchasesthe
like for processing dates that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000 problems."
The Depositary has informed its participants and other members of Capital Securitiesthe financial
community that it has developed and is implementing a program so that its
systems, as they relate to the timely payment of distributions (including
principal and income payments) to securityholders, book-entry deliveries, and
settlement of trades within DTC, continue to function appropriately. This
program includes a technical assessment and a remediation plan, each of which is
complete. Additionally, DTC's plan includes a testing phase, which is expected
to be completed within appropriate time frames.
Citigroup and the DTC system must beTrustees will not have any responsibility or liability for
any aspect of the records 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
23
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, the institutional trustee
shall 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;
- 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.
Holders of the Capital Securitiescapital securities have no preemptive rights.
24
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, (as
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--
SpecialSecurities--Special Event Redemption or Distribution."
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 Interest (as defined herein) and Additional 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" 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.
25
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.
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;
26
(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;
(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 preferred
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 Interest (as defined herein), 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.
27
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.
27
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)Interest, 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 during. 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 Periodextension period (as described
below) 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 Trusteeinstitutional trustee shall be 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
28
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 Trusteeinstitutional
trustee shall not be the sole holder of the Junior Subordinated Debt Securities, the Companyjunior subordinated debt securities,
Citigroup shall give the holders of 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 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 Board of Directors 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 Interest and Additional
Interest, if any)any, and any other amounts payable under the Indentureindenture to be
forthwithimmediately due and payable and to 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
29
rights as the holder of the Junior
Subordinated Debt Securities.junior subordinated debt securities. See
"Description of the Capital Securities--Declaration Events of Default" and
"--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 Actiondirect action for payment on or
after the respective due date specified in the Junior Subordinated Debt Securities. The Companyjunior subordinated debt
securities. Citigroup may not amend the Indentureindenture to remove the foregoing 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 discharged 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 ("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 ("covenant defeasance").
30
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 Board of Directors or supplemental indenture under which the
Junior Subordinated Debt Securities are issued shallwill no longer be an Event
of Default if, inunder 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
(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), 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
31
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 respectrelating 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;
32
(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 Indentureindenture 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)- 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, thatCitigroup Capital; however, any permitted successor of the
CompanyCitigroup under the
Indentureindenture may succeed to the Company'sCitigroup's ownership of such Common Securities, (ii) tocommon securities;
- not voluntarily dissolve, wind-up or terminate the
Trust,Citigroup Capital, except
in connection with a distribution of Junior Subordinated Debt
Securitiesjunior subordinated debt securities
as described under "Distribution of the Junior Subordinated Debt
Securities"above and in connection with certain 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 (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
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 have funds available therefor. 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." 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 Junior
Subordinated Debt Securities.
33"
34
CERTAIN 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 CompanyCitigroup to enforce the Guarantee Trustee'sguarantee trustee's rights under the Guaranteeguarantee
without first instituting a legal proceeding against 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 CompanyCitigroup 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)(2)
instituting a legal proceeding against 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.
35
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 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
against the guarantor to enforce its rights under the Guaranteeguarantee without
instituting a legal proceeding against 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.
3536
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 Securitiestrust securities evidencing undivided beneficial interests in the
assets of Citigroup Capital, 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)capital securities;
- pursuant to the Indenture, the Companyindenture, Citigroup shall pay, and Citigroup Capital
shall not be obligated to pay, directly or indirectly, all costs,
expenses, debt 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 Trusteestrustees shall 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 CompanyCitigroup as and to the extent set forth under
"Description of Guarantee" in this
Prospectus.prospectus. If the CompanyCitigroup does not make interest payments on the Junior Subordinated Debt Securitiesjunior
subordinated debt securities purchased by Citigroup Capital, it is expected that
Citigroup Capital will not have sufficient funds to pay distributions on the
Capital Securities.capital securities. The Guaranteeguarantee is a guarantee on a subordinated basis with respectin
relation to the Capital Securitiescapital securities from the time of its issuance, but 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
Securitiesjunior subordinated debt
securities held by Citigroup Capital as its sole asset. 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,declaration,
including its obligations to pay costs, expenses, debts and liabilities of
Citigroup Capital, (otherother than with respectthose relating to the Trust Securities),trust securities, 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 Declarationdeclaration provides a mechanism whereby the holders of the Capital
Securities, usingcapital
securities may direct the procedures described ininstitutional trustee to enforce its rights under the
junior subordinated debt securities. If the institutional trustee fails to
enforce its rights under the junior subordinated debt securities, any holder of
capital securities may directly institute a legal proceeding against Citigroup
to enforce the institutional trustee's rights under the junior subordinated debt
securities without first instituting any legal proceeding against the
institutional trustee or any other person or entity. See "Description of the
Capital Securities--Book Entry Only Issuance--The Depository Trust Company" and
"--Voting Rights,Rights." may direct the Institutional Trustee to enforce its rights
under the Junior Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Junior Subordinated Debt Securities, any
holder of Capital Securities may directly institute a legal proceeding against
the Company to enforce the Institutional Trustee's rights under the Junior
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity.
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 Securitiesjunior subordinated debt securities on the
37
date such interest or principal is otherwise payable, (oror in the case of
redemption, on the redemption date),date, then a holder of Capital Securitiescapital securities may also
institute a Direct Actiondirect action for payment on or after the respective due date
specified in the Junior Subordinated Debt
Securitiesjunior subordinated debt securities without first (i)(1) directing
the Institutional Trusteeinstitutional trustee to enforce the terms of the Junior Subordinated Debt Securitiesjunior subordinated debt
securities or (ii)(2) instituting a legal proceeding against the CompanyCitigroup 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 Securitiescapital securities in
such Direct Action.direct action. 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
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
Company,Citigroup, under the Guarantee,guarantee, 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 Guaranteeguarantee provides
a mechanism whereby the holders of the Capital Securitiescapital securities may 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 CompanyCitigroup to enforce the Guarantee Trustee'sguarantee
trustee's rights under the Guaranteeguarantee without first instituting a legal
proceeding against 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 CompanyCitigroup 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)(2) instituting a legal proceeding against
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."
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.capital securities.
Unless otherwise stated, this summary deals only with Capital Securitiescapital securities held as
capital assets by holders who purchase the Capital Securitiescapital securities upon original
issuance. It does not deal with special classes of holders such as banks,
thrifts, real estate investment trusts, regulated investment companies, common
trust funds, insurance companies, dealers in securities or currencies,
tax-exempt investors, persons that have a functional currency other than the
United States Dollar or persons that will hold the Capital Securitiescapital 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 be applicable to the Capital Securities.capital securities. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
thereunder and administrative and judicial interpretations thereof, as of the
date hereof,of this prospectus, all of which are subject tocould change, possibly with retroactive
effect.
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.
37Citigroup.
38
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 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.junior subordinated debt securities.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under 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 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.capital securities.
RECEIPT OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF
CITIGROUP CAPITAL
Under certainthe circumstances as described under "Description of the Capital
Securities--Special Event Redemption or Distribution," Junior Subordinated Debt
Securitiesin 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 holder, and each 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 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."
39
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 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--Sales of Capital Securities."
SALES OF CAPITAL SECURITIES
A 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 Securitiesjunior subordinated debt securities
and 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
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 holder's tax basis in the Capital Securitiescapital securities generally
will be its initial purchase price, increased by OID previously includible in
such 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 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 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.
NON-UNITED STATES HOLDERS
For purposes of this discussion, a "Non-United"non-United States Holder"holder" is any person
other than (i)than:
- 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 toif United States federal income taxtaxation is applicable to the
income of such estate regardless of its source; or
(iv)- a trust if (A)(a) a U.S. court is able to exercise primary supervision over
the trust's administration and (B)(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, (includingincluding the Statesfifty
states and the District of Columbia).Columbia.
Under present United States federal income tax law:
(i)40
- United States federal withholding tax will not be imposed on payments by
Citigroup Capital or any of its paying agents to any holder of a Capital
Securitycapital
security who or which is a Non-Unitednon-United States Holder will not be subject to
United States federal withholding tax; PROVIDED, that, (a)holder; provided that:
(1) the beneficial owner of the Capital Securitycapital security does not actually or
constructively own 10% or more of the total combined voting power of
all classes of stock of the CompanyCitigroup entitled to vote,
(b)(2) the beneficial owner of the Capital
39
Securitycapital security is not a controlled
foreign corporation that is related to the CompanyCitigroup through stock
ownership, and
(c)(3) either
(A) the beneficial owner of the Capital
Securitycapital security certifies to
Citigroup Capital or its agent, under penalties of perjury, that it
is not a United States holder and provides its name and address, or
(B) 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""financial institution"), and holds the
Capital Securitycapital 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 by a Financial Institutionfinancial
institution holding such security for the beneficial owner and
furnishes Citigroup Capital or its agent with a copy thereof; and
(ii) a
Non-United States Holder of a Capital Security will not be subject to- United States federal withholding tax onwill generally not apply to any gain
realized by a non-United States holder of a capital security upon the sale
or other disposition of a Capital Security.such security.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securitiescapital securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securitiescapital securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
PaymentsUnless a holder of capital securities complies with certain identification
requirements, "backup" withholding tax of 31% may apply to payments made on, and
proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification requirements.capital securities. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS on a timely basis.
The United States Treasury Department recently issued final regulations
governing information reporting and the certification procedures regarding
withholding and backup withholding on certain amounts paid to Non-Unitednon-United States
Holdersholders after December 31, 1999. The new Treasury regulations would alter the
procedures for claiming 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 of a Junior Subordinated Debt Security.junior subordinated debt security. Holders
of Capital Securitiescapital securities should consult their tax advisors concerning the effect,
if any, of such new Treasury regulations on an investment in the Capital
Securities.capital
securities.
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.
4041
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'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 Plan and whether the investment is appropriate for the ERISA
Plan in view of its overall investment policy and diversification of its
portfolio.
Certain provisions of ERISA and the Code prohibit ERISA 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 respectrelating to the 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, 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 Plan
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.
If the assets of the TrustCitigroup Capital were deemed to be plan assets of Plans
that are holders of the Capital Securitiescapital securities of the Trust,Citigroup Capital, a Plan'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
Plans 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 Plan 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 Plans for reasons unrelated to the operation
of the Trust,Citigroup Capital, E.G., because of the provision of services by the
CompanyCitigroup or
an affiliate to the Plan. A purchase of Capital Securitiescapital securities of the
TrustCitigroup Capital
by any such Plan 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 occur
as a result of the purchase or holding of the Capital Securitiescapital securities of the TrustCitigroup
Capital by a Plan, the Capital Securitiescapital securities of the TrustCitigroup Capital may be not
purchased or held by any Plan or any person investing "plan assets" of any Plan,
unless such purchaser or holder is eligible for the exemptive relief available
under Prohibited Transaction Class Exemption ("PTCE") 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transaction involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company separate accounts), or PTCE
84-14 (for certain transactions determined by independent qualified asset
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 Plan and is not purchasing such securities (or interest
therein) on behalf of or with "plan assets" of any Plan or (b) its purchase and
holding of the Capital Securitiescapital securities of the TrustCitigroup Capital (or interest therein) is
eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1
or 84-14.
4142
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 Securitiescapital securities of the TrustCitigroup Capital with Plan 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. 517 (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.
4243
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
------------
------------
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. 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 of the fact that the proceeds of the sale of the Capital Securitiescapital securities
will ultimately be used to purchase the Junior Subordinated Debt Securitiesjunior subordinated debt securities of
Citigroup, the Company, the Underwriting Agreementunderwriting agreement provides that the CompanyCitigroup will pay as
compensation to the Underwritersunderwriters $ per Capital Securitycapital security for the accounts of
the several Underwritersunderwriters ($ in the aggregate); PROVIDED that. However, such compensation
will be $ per Capital Securitycapital security for sales of 10,000 or more Capital
Securitiescapital
securities to a single purchaser. Therefore, to the extent of such sales, the
actual amount of Underwriters' Compensationunderwriters' compensation will be less than the aggregate
amount specified in the preceding sentence.
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.
44
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. 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. Such 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 makes an offering of the Capital Securities,capital securities,
such offering will be conducted pursuant to the 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.
LEGAL MATTERS
The validity of the Capital Securities,capital securities, the Junior Subordinated Debt
Securities,junior subordinated debt
securities, the Guaranteeguarantee and certain matters relating thereto and certain
United States federal income tax matters will be passed upon for the CompanyCitigroup and
Citigroup Capital by Skadden, Arps, Slate, Meagher & Flom LLP New York, New
York. Certain legal matters will be passed upon for the Underwritersunderwriters by Dewey
Ballantine LLP, New York, New York. 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 Group Inc.
("Travelers")
as of December 31, 1997 and 1996, 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, have been audited by KPMG Peat Marwick LLP,
45
independent certified public accountants, as set forth in their reports 44
thereon
(also incorporated by reference herein), which. Those 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 toregarding 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, included therein and
incorporated herein by reference, whichreference. This report states that KPMG Peat Marwick LLP did not audit
the Salomon Financials (as defined above) and that their opinion with respect toregarding any amounts derived from
the Salomon Financials is based on the report of Arthur Andersen LLP. Generally
accepted accounting principles proscribe giving effect to a consummated business
combination accounted for by the pooling of interests method in financial
statements that do not include the date of consummation. 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 herein in reliance upon such reports givenand upon the authority of said
firms 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.
45
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securities
CITIGROUP CAPITAL
% CAPITAL SECURITIES
$ LIQUIDATION AMOUNT
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CITIGROUP INC.
[LOGO]
-------
PROSPECTUS
---------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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...................................Fee...................................... $1,153,700.00
Accounting Fees...............................................Fees.................................................. 150,000.00
Trustees' Fees and Expenses...................................Expenses...................................... 75,000.00
Blue Sky Fees and Expenses....................................Expenses....................................... 40,000.00
Printing and Engraving Fees...................................Fees...................................... 500,000.00
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...................................Fees...................................... 254,300.00
Miscellaneous.................................................Miscellaneous.................................................... 6,500.00
------------
Total.....................................................-------------
Total........................................................ $4,710,000.00
------------
-------------------------
-------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL") 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 he 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 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 corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his 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 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 opposed to the
best interests of the corporation, 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.
Section 145 of the DGCL further provides that to the extent a 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, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification
II-1
provided for by Section 145 shall, unless otherwise provided when authorized and
ratified, continue as to such 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 or officer of the corporation against
any liability asserted against him and incurred by him 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
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
II-2
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.
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, and
Medium-Term Subordinated Notes, Series A.*+
1.05 -- Form of Underwriting Agreement for Capital Securities.*+
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.+
4.02 -- By-Laws of the CompanyCitigroup effective October 8, 1998 (incorporated by reference to Exhibit 3.02 to
the Company'sCitigroup's Quarterly Report on Form 10-Q dated September 30, 1998).
II-3
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
4.03 -- 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'sCitigroup's
Registration Statement on Form S-3 (No. 33-55542)).
II-3
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
4.04 -- 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)).
4.05 -- 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)).
4.06 -- 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)).
4.07 -- 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).
4.08 -- Indenture, dated as of July 17, 1998, between the CompanyCitigroup and The First National Bank of Chicago,
as trustee (incorporated by reference to Exhibit 4.05 to the Company'sCitigroup's Registration Statement on
Form S-3 (No. 333-51201)).
4.09 -- First Supplemental Indenture, dated as of December 15, 1998 between the CompanyCitigroup and The First
National Bank of Chicago, as trustee.*+
4.10 -- 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.
4.11 -- 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.
4.12 -- Form of Deposit Agreement (incorporated by reference to Exhibit 4.17 to the Company'sCitigroup's Registration
Statement on Form S-3 (No. 333-27155)).
4.13 -- Form of Depositary Receipt (included in Exhibit 4.12).
4.14 -- Forms of Medium-Term Senior Notes, Series A and Medium-Term Subordinated Notes, Series A.*+
4.15 -- Certificate of Trust of Citigroup Capital VI, as amended.*+
4.16 -- Certificate of Trust of Citigroup Capital VII, as amended.*+
4.17 -- 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.*+
4.20 -- Certificate of Trust of Citigroup Capital XI.*+
4.21 -- Certificate of Trust of Citigroup Capital XII.*+
4.22 -- Certificate of Trust of Citigroup Capital XIII.*+
4.23 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VI.*+
4.24 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VII.*+
4.25 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VIII.*+
4.26 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital IX.*+
4.27 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital X.*+
4.28 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XI.*+
4.29 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XII.*+
4.30 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XIII.*+
II-4
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
4.31 -- Form of Indenture between the Company and The Chase Manhattan Bank, as trustee (incorporated by
reference to Exhibit 4.11 to the Company'sCitigroup's Registration Statement on Form S-3 (No. 333-12439)).
II-4
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
4.32 -- First Supplemental Indenture, dated as of December 15, 1998, between the CompanyCitigroup and The Chase
Manhattan Bank, as trustee.*+
4.33 -- Forms of Capital Security for each of the Trusts (included in Exhibits 4.23-4.30).
4.34 -- 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'sCitigroup's Registration Statement on Form S-3 (No. 333-27155)).
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.*+
4.38 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital IX.*+
4.39 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital X.*+
4.40 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XI.*+
4.41 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XII.*+
4.42 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XIII.*+
4.43 -- Form of Junior Subordinated Debt Securities (included in Exhibit 4.31).
4.44 -- Second Supplemental Indenture, dated as of January 21, 1999, between Citigroup and The First
National Bank of Chicago, as trustee.+
4.45 -- Certificate of Designation of 5.321% Cumulative Preferred Stock, Series YY, of Citigroup.+
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 Supplemental Calculation of
Ratio of Income to Combined Fixed Charges Including Preferred Stock Dividends (incorporated by
reference to Exhibit 12.01 to the Company'sCitigroup's Current Report on Form 8-K dated November 13, 1998).
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 -- 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 The First National Bank of 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.*+
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.*+
II-5
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
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.*+
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
- ----------- -------------------------------------------------------------------------------------------------
+
25.07 -- 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 X.*+
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.*+
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.*+
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.*+
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.*+
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.*+
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.*+
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.*+
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.*+
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.*+
II-6
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
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 as an exhibit to this registration statement.
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 XIII hereby undertakes:
(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) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment hereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement; and
(iii) to 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;
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.
(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, 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, that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial BONA 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 such 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
II-7
against public policy as expressed in such 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
such 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 FIDE offering thereof.
II-8
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)10th day of December, 1998.February, 1999.
CITIGROUP INC.
By: /s/ HEIDI G. MILLER
-----------------------------------------
Heidi G. Miller
Chief Financial Officer
PURSUANT 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)10TH DAY OF DECEMBER, 1998.FEBRUARY, 1999.
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-Chief Executive Officer
-------------------------------------------- (Principal Executive Officer) and Director
Sanford I. Weill
/s/ HEIDI G. MILLER Chief Financial Officer
-------------------------------------------- (Principal Financial Officer)
Heidi G. Miller
/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
* Director
--------------------------------------------
Ann Dibble Jordan
II-9
* Director
--------------------------------------------
Ann Dibble Jordan
* Director
--------------------------------------------
Reuben Mark
* Director
--------------------------------------------
Michael T. Masin
* Director
--------------------------------------------
Dudley C. Mecum
* Director
--------------------------------------------
Richard D. Parsons
* Director
--------------------------------------------
Andrall E. Pearson
* Director
--------------------------------------------
Robert B. Shapiro
* Director
--------------------------------------------
Franklin A. Thomas
* Director
--------------------------------------------
Edgar S. Woolard
* Director
--------------------------------------------
Arthur Zankel
*By: /s/ HEIDI G. MILLER
----------------------------------------
Heidi G. Miller
Attorney-in-Fact
II-10
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)10th day of December, 1998.February, 1999.
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
-----------------------------------------
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
-----------------------------------------
Irwin Ettinger, as Trustee
II-12
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 A, and
Medium-Term Subordinated Notes, Series A.+
1.05 -- Form of Underwriting Agreement for Capital Securities.+
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.+
4.02 -- By-Laws of Citigroup effective October 8, 1998 (incorporated by reference to Exhibit 3.02 to
Citigroup's Quarterly Report on Form 10-Q dated September 30, 1998).
4.03 -- 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)).
4.04 -- 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)).
4.05 -- 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)).
4.06 -- 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)).
4.07 -- 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).
4.08 -- Indenture, dated as of July 17, 1998, between Citigroup and 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)).
4.09 -- First Supplemental Indenture, dated as of December 15, 1998 between Citigroup and The First
National Bank of Chicago, as trustee.+
4.10 -- 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.
4.11 -- 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.
4.12 -- Form of Deposit Agreement (incorporated by reference to Exhibit 4.17 to Citigroup's Registration
Statement on Form S-3 (No. 333-27155)).
4.13 -- Form of Depositary Receipt (included in Exhibit 4.12).
4.14 -- Forms of Medium-Term Senior Notes, Series A and Medium-Term Subordinated Notes, Series A.+
4.15 -- Certificate of Trust of Citigroup Capital VI, as amended.+
4.16 -- Certificate of Trust of Citigroup Capital VII, as amended.+
4.17 -- Certificate of Trust of Citigroup Capital VIII, as amended.+
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
4.18 -- Certificate of Trust of Citigroup Capital IX.+
4.19 -- Certificate of Trust of Citigroup Capital X.+
4.20 -- Certificate of Trust of Citigroup Capital XI.+
4.21 -- Certificate of Trust of Citigroup Capital XII.+
4.22 -- Certificate of Trust of Citigroup Capital XIII.+
4.23 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VI.+
4.24 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VII.+
4.25 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VIII.+
4.26 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital IX.+
4.27 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital X.+
4.28 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XI.+
4.29 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XII.+
4.30 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XIII.+
4.31 -- Form of Indenture between the Company 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)).
4.32 -- First Supplemental Indenture, dated as of December 15, 1998, between Citigroup and The Chase
Manhattan Bank, as trustee.+
4.33 -- Forms of Capital Security for each of the Trusts (included in Exhibits 4.23-4.30).
4.34 -- 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 Citigroup's Registration Statement on Form S-3 (No. 333-27155)).
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.+
4.38 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital IX.+
4.39 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital X.+
4.40 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XI.+
4.41 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XII.+
4.42 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XIII.+
4.43 -- Form of Junior Subordinated Debt Securities (included in Exhibit 4.31).
4.44 -- Second Supplemental Indenture, dated as of January 21, 1999, between Citigroup and The First
National Bank of Chicago, as trustee.+
4.45 -- Certificate of Designation of 5.321% Cumulative Preferred Stock, Series YY, of Citigroup.+
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 Supplemental Calculation of
Ratio of Income to Combined Fixed Charges Including Preferred Stock Dividends (incorporated by
reference to Exhibit 12.01 to Citigroup's Current Report on Form 8-K dated November 13, 1998).
23.01 -- Consent of KPMG LLP, independent public accountants.*
23.02 -- Consent of KPMG LLP, independent public accountants.*
23.03 -- Consent of KPMG 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 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.02).
24.01 -- Powers of Attorney of certain Directors.+
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
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 The First National Bank of 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.+
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.+
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.+
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.+
25.07 -- 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 X.+
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.+
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.+
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.+
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.+
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.+
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.+
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.+
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------