Exhibit 1.01
TERMS AGREEMENT
February 11, 2003
Citigroup Inc.
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Ladies and Gentlemen:
We understand that Citigroup Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $1,000,000,000 aggregate principal amount
of its debt securities (the "Securities"). Subject to the terms and conditions
set forth herein or incorporated by reference herein, we, as underwriters (the
"Underwriters"), offer to purchase, severally and not jointly, the principal
amount of the Securities set forth opposite our respective names on the list
attached as Annex A hereto at 98.747% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance. The Closing Date shall be
February 19, 2003, at 8:30 A.M. at the Corporate Law offices of the Company
located at 425 Park Avenue, New York, New York 10043.
The Securities shall have the following terms:
Title: .......................... 5.875% Subordinated Notes Due 2033
Maturity: ....................... February 22, 2033
Interest Rate: .................. 5.875% per annum
Interest Payment Dates: ......... Semi-annually on the 22nd of February and
August, commencing August 22, 2003
Initial Price to Public: ........ 99.622% of the principal amount thereof,
plus accrued interest, if any, from the date
of issuance
Redemption Provisions: .......... The Securities are not redeemable by the
Company prior to maturity, except upon the
occurrence of certain events involving
United States taxation, as set forth in the
Prospectus Supplement, dated February 11,
2003, to the Prospectus, dated January 29,
2003
Record Date: .................... The February 15 or August 15 preceding each
Interest Payment Date
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Additional Terms:
The Securities shall be issuable as Registered Securities only. The
Securities will be initially represented by one or more global Securities
registered in the name of The Depository Trust Company ("DTC") or its nominees,
as described in the Prospectus Supplement relating to the Securities. Beneficial
interests in the Securities will be shown on, and transfers thereof will be
effected only through, records maintained by DTC, Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and Clearstream International and their
respective participants. Owners of beneficial interests in the Securities will
be entitled to physical delivery of Securities in certificated form only under
the limited circumstances described in the Prospectus Supplement. Principal and
interest on the Securities shall be payable in United States dollars. The
provisions of Sections 11.03 and 11.04 of the Indenture relating to defeasance
shall apply to the Securities.
All the provisions contained in the document entitled "Primerica
Corporation -- Debt Securities -- Underwriting Agreement -- Basic Provisions"
and dated January 12, 1993 (the "Basic Provisions"), a copy of which you have
previously received, are, except as indicated below, herein incorporated by
reference in their entirety and shall be deemed to be a part of this Terms
Agreement to the same extent as if the Basic Provisions had been set forth in
full herein. Terms defined in the Basic Provisions are used herein as therein
defined.
Basic Provisions varied with respect to this Terms Agreement:
(a) all references to Primerica Corporation shall refer to Citigroup
Inc.;
(b) in the thirteenth line of the first paragraph, delete "March 15,
1987, between Primerica Corporation, a New Jersey corporation formerly
known as American Can Company ("old Primerica"), and The Bank of New York,
as trustee (such trustee or such other trustee as may be named for the
Securities, being hereinafter referred to as the "Trustee"), as amended by
the First Supplemental Indenture dated as of December 15, 1988, among old
Primerica, Primerica Holdings, Inc., a Delaware corporation ("Holdings")
and the Trustee, the Second Supplemental Indenture dated as of January 31,
1991 between Holdings and the Trustee, and the Third Supplemental
Indenture dated as of December 9, 1992 among the "Company, Holdings and
the Trustee" and insert in lieu thereof "April 12, 2001, between Citigroup
Inc., a Delaware corporation, and Bank One Trust Company, N.A., as trustee
(such trustee or such other trustee as may be named for the Securities,
being hereinafter referred to as the "Trustee")";
(c) in the second line of Section 2(a), delete "(33-55542),
including a prospectus" and insert in lieu thereof "(333-102206),
including a prospectus" and any reference in the Basic Provisions to the
"Registration Statement" shall be deemed to be a reference to such
registration statement on Form S-3;
(d) in the third paragraph of Section 3, delete the phrase
"certified or official bank check or checks in New York Clearing House
(next day)" and insert in lieu thereof "wire transfer of federal or other
same day";
(e) in the fifth paragraph of Section 3, delete the phrase
"certified or official bank check in New York Clearing House (next day)"
and insert in lieu thereof "wire transfer of federal or other same day";
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(f) in the fourteenth line of the third paragraph of Section 3,
delete the word "definitive" and insert in lieu thereof "global";
(g) in the ninth line of Section 6(a), delete "such registration
statement when it became effective, or in the Registration Statement," and
insert in lieu thereof "the Registration Statement";
(h) in the eighth line of Section 6(b), delete "in any part of such
registration statement when it became effective, or in the Registration
Statement," and insert in lieu thereof "the Registration Statement"; and
(i) in the sixth line of Section 10, delete "65 East 55th Street,
New York, New York 10022," and insert in lieu thereof "399 Park Avenue,
New York, New York 10043."
The Company agrees to use its best efforts to have the Securities
approved for listing on the Luxembourg Stock Exchange.
The Company further agrees and hereby represents that it has been
informed of the guidance relating to stabilization provided by the Financial
Services Authority, in particular in the section MAR 2 Annex 2G of the Financial
Services Handbook, and has not taken or omitted to take any action and will not
take any action or omit to take any action (such as issuing any press release
relating to any Securities without the Stabilization/FSA legend) which may
result in the loss by any of the Underwriters of the ability to rely on any
stabilization safe harbor provided by the Financial Services Authority under the
Financial Services and Markets Act 2000.
The Underwriters hereby agree in connection with the underwriting of
the Securities to comply with the requirements set forth in any applicable
sections of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc.
Each Underwriter further agrees and hereby represents that:
(a) it has not offered or sold and, prior to the expiration of the
period of six months from the Closing Date for the issuance of the
Securities, will not offer or sell any Securities to persons in the United
Kingdom, except to those persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments, as principal or
agent, for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in
the United Kingdom for purposes of the Public Offers of Securities
Regulations 1995;
(b) it has complied and will comply with all applicable provisions
of the Financial Services and Markets Act 2000 ("FSMA") with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom;
(c) it has only communicated or caused to be communicated and it
will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of Section
21 of FSMA) received by it in connection with the issue or sale of the
Securities in circumstances in which Section 21(1) of FSMA does not apply
the Company;
(d) it will not offer or sell any Securities directly or indirectly
in Japan or to, or for the benefit of, any Japanese person or to others,
for re-offering or re-sale directly or indirectly in Japan or to any
Japanese person except under circumstances which will result in compliance
with all applicable laws, regulations and guidelines promulgated by the
relevant governmental and regulatory authorities in effect at the relevant
time. For purposes of this
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paragraph, "Japanese person" means any person resident in Japan, including
any corporation or other entity organized under the laws of Japan;
(e) it is aware of the fact that no German selling prospectus
(Verkaufsprospekt) has been or will be published in respect of the sale of
the Securities and that it will comply with the Securities Selling
Prospectus Act (the "SSPA") of the Federal Republic of Germany
(Wertpapier-Verkaufsprospektgesetz). In particular, each Underwriter
represents that it has undertaken not to engage in a public offering
(offentliche Anbieten) in the Federal Republic of Germany with respect to
any Securities otherwise than in accordance with the SSPA and any other
act replacing or supplementing the SSPA and all the other applicable laws
and regulations;
(f) the Securities are being issued and sold outside the Republic of
France and that, in connection with their initial distribution, it has not
offered or sold and will not offer or sell, directly or indirectly, any
Securities to the public in the Republic of France, and that it has not
distributed and will not distribute or cause to be distributed to the
public in the Republic of France the Prospectus Supplement, the Prospectus
or any other offering material relating to the Securities;
(g) it and each of its affiliates has not offered or sold, and it
will not offer or sell, the Securities by means of any document to persons
in Hong Kong other than persons whose ordinary business it is to buy or
sell shares or debentures, whether as principal or agent, or otherwise in
circumstances which do not constitute an offer to the public within the
meaning of the Hong Kong Companies Ordinance (Chapter 32 of the Laws of
Hong Kong), and unless permitted to do so under the securities laws of
Hong Kong, no person has issued or had in its possession for the purposes
of issue, and will not issue or have in its possession for the purpose of
issue, any advertisement, document or invitation relating to the
Securities other than with respect to the Securities to be disposed of to
persons outside Hong Kong or only to persons whose business involves the
acquisition, disposal or holding of securities, whether as principal or
agent; and
(h) it acknowledges that the Securities may not be offered, sold,
transferred or delivered in or from The Netherlands as part of their
initial distribution or at any time thereafter directly or indirectly,
other than to individuals or legal entities (which include, but are not
limited to, banks, brokers, dealers or finance companies which are subject
to adequate supervision), institutional investors, insurance companies,
pension funds, central governments and large public international
organizations and large undertakings (through their treasury department)
which are listed on a sufficiently regulated stock exchange, who or which
regularly trade or invest in securities in the conduct of a business or a
profession for their own account, all within the meaning of the Securities
Transactions Supervision Act 1995 (Wet Toezicht Effectenverkeer 1995).
In addition to the legal opinions required by Sections 5(c) and 5(d)
of the Basic Provisions, the Underwriters shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special U.S. tax counsel to the
Company, dated the Closing Date, to the effect that although the discussion set
forth in the Prospectus Supplement under the heading "United States Federal
Income Tax Considerations For Non-United States Holders" does not purport to
discuss all possible United States federal income tax consequences of the
purchase, ownership and disposition of the Securities to non-United States
holders of the Securities, such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal
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income tax consequences of the purchase, ownership and disposition of the
Securities to non-United States holders of the Securities.
John R. Dye, Esq., Associate General Counsel of the Company, is
counsel to the Company. Skadden, Arps, Slate, Meagher & Flom LLP is special U.S.
tax counsel to the Company. Cleary, Gottlieb, Steen & Hamilton is counsel to the
Underwriters.
Please accept this offer no later than 9:00 p.m. Eastern Time on
February 11, 2003 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us, or by sending us a written
acceptance in the following form:
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"We hereby accept your offer, set forth in the Terms Agreement,
dated February 11, 2003, to purchase the Securities on the terms set forth
therein."
Very truly yours,
SALOMON SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
BANC ONE CAPITAL MARKETS, INC.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BARCLAYS CAPITAL INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
SANDLER, O'NEIL & PARTNERS L.P.
THE WILLIAMS CAPITAL GROUP, L.P.
By: SALOMON SMITH BARNEY INC.
By: /s/ Jeffrey A. Drake
---------------------------------
Name: Jeffrey A. Drake
Title: Vice President
ACCEPTED:
CITIGROUP INC.
By: /s/ Charles E. Wainhouse
------------------------------
Name: Charles E. Wainhouse
Title: Assistant Treasurer
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ANNEX A
NAME OF UNDERWRITER PRINCIPAL AMOUNT OF SECURITIES
- ------------------- ------------------------------
Salomon Smith Barney Inc. $ 860,000,000
Bear, Stearns & Co. Inc. 25,000,000
Banc One Capital Markets, Inc. 25,000,000
Lehman Brothers Inc. 25,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 25,000,000
Barclays Capital Inc. 10,000,000
Credit Suisse First Boston Corporation 10,000,000
Sandler, O'Neil & Partners, L.P. 10,000,000
The Williams Capital Group, L.P. 10,000,000
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TOTAL $1,000,000,000
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