EXHIBIT 1.01
TERMS AGREEMENT
October 24, 2005
Citigroup Funding Inc.
388 Greenwich Street, 38th Floor
New York, New York 10013
Attn: Treasury Capital Markets
Ladies and Gentlemen:
We understand that Citigroup Funding Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $40,000,000 aggregate principal amount of
its 9% Select EQUity Indexed NoteS(SM) Based Upon the Common Stock of eBay Inc.
Due November 9, 2006 (the "SEQUINS"). Payments due under the SEQUINS will be
fully and unconditionally guaranteed by Citigroup Inc., a Delaware corporation
(the "Guarantor"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, Citigroup Global Markets Inc. (the
"Underwriter") offers to purchase 4,000,000 SEQUINS in the principal amount of
$40,000,000 at 97.75% of the aggregate principal amount. The Closing Date shall
be October 27, 2005 at 9:00 a.m. at the offices of Cleary Gottlieb Steen &
Hamilton LLP, One Liberty Plaza, New York, New York 10006.
The SEQUINS shall have the following terms:
Title: 9% Select EQUity Indexed NoteS(SM) Based Upon the
Common Stock of eBay Inc. Due November 9, 2006
Maturity: November 9, 2006
Maturity Payment: Holders of the SEQUINS will be entitled to receive
at maturity the Maturity Payment (as defined in the
Prospectus Supplement dated October 24, 2005
relating to the SEQUINS)
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Terms Agreement
Interest Rate: 9% per annum
Interest Payment Dates: The 9th day of each February, May, August and
November, or the immediately next Business Day,
commencing on February 9, 2006.
Regular Record Dates: The fifth Business Day preceding each interest
payment date.
Initial Price To Public: 100% of the principal amount thereof, plus accrued
interest from October 27, 2005 to date of payment
and delivery.
Call Option: Beginning April 27, 2006, the Company may call the
SEQUINS in whole, and not in part, for cash in an
amount that, together with all other payments made
on the SEQUINS from the date of issuance to and
including the call date, will provide a yield to
call of 14.25% per annum (compounded annually)
Trustee: The Bank of New York
Indenture: Indenture, dated as of June 1, 2005
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Terms Agreement
All the provisions contained in the document entitled "Citigroup Funding
Inc. -- Debt Securities -- Underwriting Agreement Basic Provisions" and dated
May 3, 2005 (the "Basic Provisions"), a copy of which you have previously
received, are 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.
The Underwriter hereby agrees in connection with the underwriting of the
SEQUINS to comply with the requirements set forth in any applicable sections of
Section 2720 to the By-Laws of the National Association of Securities Dealers,
Inc.
Michael S. Zuckert is General Counsel, Finance and Capital Markets of the
Guarantor and legal counsel to the Company. Cleary Gottlieb Steen & Hamilton LLP
is counsel to the Underwriter. Cleary Gottlieb Steen & Hamilton LLP is special
tax counsel to the Company and the Guarantor.
Please accept this offer no later than 9:00 p.m. on October 24, 2005, 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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Terms Agreement
"We hereby accept your offer, set forth in the Terms Agreement, dated
October 24, 2005, to purchase the SEQUINS on the terms set forth therein."
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Richard T. Chang
----------------------------------
Name: Richard T. Chang
Title: Director
ACCEPTED:
CITIGROUP FUNDING INC.
By: /s/ Geoffrey S. Richards
------------------------------------------
Name: Geoffrey S. Richards
Title: Vice President
and Assistant Treasurer
CITIGROUP INC.
By: /s/ Eric L. Wentzel
------------------------------------------
Name: Eric L. Wentzel
Title: Assistant Treasurer
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Terms Agreement