Exhibit 1.01
TERMS AGREEMENT
June 2, 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 $600,000,000 aggregate principal amount
of its subordinated debt securities (the "Securities"). Subject to the terms and
conditions set forth herein or incorporated by reference herein, we, Citigroup
Global Markets Inc., Barclays Capital Inc., Bear, Stearns & Co. Inc., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., Banc of America
Securities LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Loop
Capital Markets, LLC and Toussaint Capital Partners, LLC, 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 99.6% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance. The Closing Date shall be
June 9, 2006, at 8:30 A.M. 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: ....................... Subordinated Floating Rate Notes Due 2016
Maturity: .................... June 9, 2016
Interest Rate: ............... Three-month LIBOR (Telerate) plus 0.27%,
determined as set forth in the Prospectus dated
March 2, 2006 and the Prospectus Supplement
dated June 2, 2006
Interest Payment Dates: ...... Quarterly on the 9th day of each March, June,
September and December commencing September 9,
2006
Initial Price to Public: ..... 100% of the principal amount thereof, plus
accrued interest from June 9, 2006
Redemption Provisions: ....... The Securities are not redeemable by the
Company prior to Maturity, except upon the
occurrence of certain events involving United
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States taxation, as set forth in the Prospectus
dated March 2, 2006
Record Date: ................. 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 relevant provisions of
Article Eleven 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 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 implemented in Luxembourg in a manner that would require the
Company to publish financial information according to accounting principles
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 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.
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Each Underwriter further agrees and hereby represents that:
(a) 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 the
Financial Services and Markets Act 2000 (the "FSMA") received by it in
connection with the issue or sale of the Securities in circumstances in
which Section 21(1) of the FSMA does not apply to the Company;
(b) it has complied and will comply with all applicable provisions of
the FSMA with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom;
(c) 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;
(d) it is aware of the fact that no securities prospectus
(Wertpapierprospekt) under the German Securities Prospectus Act
(Wertpapierprospektgesetz, the "Prospectus Act") has been or will be
published in respect of the Securities in the Federal Republic of Germany
and that it will comply with the Prospectus Act and all other laws and
regulations applicable in the Federal Republic of Germany governing the
issue, offering and sale of the Securities;
(e) no Securities have been offered or sold and will be offered or
sold, directly or indirectly, to the public in France except to qualified
investors (investisseurs qualifies) and/or to a limited circle of investors
(cercle restreint d'investisseurs) acting for their own account as defined
in article L. 411-2 of the French Code Monetaire et Financier and
applicable regulations thereunder; and that the direct or indirect resale
to the public in France of any Securities acquired by any qualified
investors (investisseurs qualifies) and/or any investors belonging to a
limited circle of investors (cercle restreint d'investisseurs) may be made
only as provided by articles L. 412-1 and L. 621-8 of the French Code
Monetaire et Financier and applicable regulations thereunder; and that none
of the Prospectus Supplement, the Prospectus or any other offering
materials relating to the Securities has been released, issued or
distributed to the public in France except to qualified investors
(investisseurs qualifies) and/or to a limited circle of investors (cercle
restreint d'investisseurs) mentioned above; and
(f) 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.
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In addition to the legal opinions required by Sections 6(b) and 6(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 under the headings "United States Federal Income Tax
Considerations - Introduction" and "- 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 p.m. (Eastern Time) on
June 2, 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
June 2, 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
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Citigroup Global Markets Inc. $504,000,000
Barclays Capital Inc. 16,500,000
Bear, Stearns & Co. Inc. 16,500,000
Lehman Brothers Inc. 16,500,000
Merrill Lynch, Pierce, Fenner & Smith, Inc. 16,500,000
Banc of America Securities LLC 6,000,000
Deutsche Bank Securities Inc. 6,000,000
Goldman, Sachs & Co. 6,000,000
Loop Capital Markets, LLC 6,000,000
Toussaint Capital Partners, LLC 6,000,000
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TOTAL $600,000,000
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