Exhibit 1.01
TERMS AGREEMENT
May 5, 2006
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
senior debt securities (the "Securities"). Subject to the terms and conditions
set forth herein or incorporated by reference herein, we, Citigroup Global
Markets Inc., Blaylock & Co., Inc. and Samuel A. Ramirez & Company, Inc., 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 99.825% of the principal amount
thereof, plus accrued interest, if any from the date of issuance. The Closing
Date shall be May 12, 2006, at 8:30 A.M. New York City Time. The closing shall
take place 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: .................... 5.447% Fixed Rate /Floating Rate Notes due 2009
Maturity: ................. May 11, 2009
Interest Rate: ............ From the Closing Date to but excluding May 11, 2007: 5.447%
per annum
From May 11, 2007 to but excluding the Maturity date:
Three-month LIBOR (Telerate) plus 0.03%, determined as set
forth in the Prospectus dated March 2, 2006 and the
Prospectus Supplement dated May 5, 2006
Interest Payment Dates: ... From the Closing Date to but excluding May 11, 2007:
Annually on May 11, 2007
From May 11, 2007 to Maturity: Quarterly on the 11th of
August, November, February and May
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Initial Price to Public: .. 100.00% of the principal amount thereof, plus accrued
interest, if any, from May 12, 2006
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, dated March 2, 2006
Record Date: .............. From the Closing Date to but excluding May 11, 2007: May 1,
2007
From May 11, 2007 to Maturity: The business day immediately
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 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. 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 "Citigroup Inc.
- -- Debt Securities -- Underwriting Agreement -- Basic Provisions" and dated
March 2, 2006 (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 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;
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(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 to 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 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
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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 6(b) and (c) 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 dated March 2, 2006 under the heading "United States
Federal Income Tax Considerations--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 income tax
consequences of the purchase, ownership and disposition of the Securities to
non-United States holders of the Securities.
Michael S. Zuckert, Esq., General Counsel, Finance and 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
LLP is counsel to the Underwriters.
Please accept this offer no later than 9:00 pm (Eastern Time) on May
5, 2006 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
May 5, 2006, 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/ Charles E. Wainhouse
-------------------------------
Name: Charles E. Wainhouse
Title: Assistant Treasurer
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ANNEX A
NAME OF UNDERWRITER PRINCIPAL AMOUNT OF SECURITIES
- ------------------- ------------------------------
Citigroup Global Markets Inc. $ 880,000,000
Blaylock & Co., Inc. 70,000,000
Samuel A. Ramirez & Company, Inc. 50,000,000
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TOTAL $1,000,000,000
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