Exhibit 1.01
TERMS AGREEMENT
February 2, 2004
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, Citigroup Global
Markets Inc., Banc One Capital Markets, Inc., Bear, Stearns & Co. Inc., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., Barclays Bank PLC,
Blaylock & Partners, L.P., Samuel A. Ramirez & Co. Inc., UBS Securities LLC,
Wachovia Capital Markets, LLC and The Williams Capital Group, L.P., 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 99.435% of the principal amount
thereof, plus accrued interest, if any, from the date of issuance. The Closing
Date shall be February 9, 2004, 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: ............................................. 3.625% Fixed Rate Senior Notes due 2009
Maturity: .......................................... February 9, 2009
Interest Rate: ..................................... 3.625% per annum
Interest Payment Dates: ............................ Semi-annually on February 9 and August 9,
commencing August 9, 2004
Initial Price to Public: ........................... 99.760% of the principal amount thereof, plus
accrued interest, if any, from February 9, 2004
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 2, 2004, to the Prospectus, dated July 23,
2003
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Record Date: ....................................... The January 31 and July 31 preceding each Interest
Payment Date
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 second line of Section 2(a), delete "33-55542), including a
prospectus" and insert in lieu thereof "333-106598), 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;
(c) in the fourth line of 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";
(d) in the fourteenth line of the third paragraph of Section 3, delete
the word "definitive" and insert in lieu thereof "global";
(e) in the fourth line of 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";
(f) 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";
(g) 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
(h) 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"
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The Company agrees to use its best efforts to have the Securities
approved for listing on the Luxembourg Stock Exchange and to maintain such
listing so long as any of the Securities are outstanding, provided, however
that:
(a) if it is impracticable or unduly burdensome, in the good
faith determination of the Company, to maintain such listing due to
changes in listing requirements occurring after the date of the
Prospectus Supplement, or
(b) if the Transparency Directive (as defined in the
Prospectus Supplement) is adopted and is implemented in Luxembourg in a
manner that would require the Company to publish financial information
according to accounting principles and/or standards that are materially
different from United States generally accepted accounting principles,
the Company may de-list the Securities from the Luxembourg Stock Exchange and
shall use its reasonable best efforts to obtain an alternative admission to
listing, trading and/or quotation of the Securities by another listing
authority, exchange or system within or outside the European Union as it may
decide. If such an alternative admission is not available or is, in the
Company's opinion, unduly burdensome, such an alternative admission will not be
obtained, and the Company shall have no further obligation in respect of any
listing, trading or quotation for the Securities.
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
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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
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).
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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" does not purport to discuss all possible United
States federal income tax consequences of the purchase, ownership and
disposition of the Securities to holders of the Securities, such discussion
constitutes, in all material respects, a fair and accurate summary of the United
States federal income tax consequences of the purchase, ownership and
disposition of the Securities to holders of the Securities.
John R. Dye, Esq., General Counsel -- Capital Markets 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 2, 2004 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
2, 2004, to purchase the Securities on the terms set forth therein."
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.,
on behalf of the Underwriters named herein
By: /s/ Jack D. McSpadden, Jr.
------------------------------
Name: Jack D. McSpadden, Jr.
Title: Managing Director
ACCEPTED:
CITIGROUP INC.
By: /s/ Eric Wentzel
-------------------------------
Name: Eric Wentzel
Title: Assistant Treasurer
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ANNEX A
NAME OF UNDERWRITER PRINCIPAL AMOUNT OF SECURITIES
- ------------------- ------------------------------
Citigroup Global Markets Inc. $ 840,000,000
Banc One Capital Markets, Inc. 25,000,000
Bear, Stearns & Co. Inc. 25,000,000
Lehman Brothers Inc. 25,000,000
Merrill Lynch, Pierce, Fenner & Smith Inc. 25,000,000
Barclays Bank PLC 10,000,000
Blaylock & Partners, L.P. 10,000,000
Samuel A. Ramirez & Co., Inc. 10,000,000
UBS Securities LLC 10,000,000
Wachovia Capital Markets, LLC 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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