Citi tenders for $500 million of four note series via Dutch auction

By Susanna Moon

Chicago, Feb. 14 - Citigroup Inc. said it began tender offers to purchase up to $500 million equivalent of four series of notes under a modified Dutch auction.

Pricing for the outstanding notes will be set at 9 a.m. ET on Feb. 21 using a benchmark security plus a fixed spread, as follows:

• £497,615,000 outstanding of the £750 million 7.625% fixed-rate notes due 2018 based on the 5% U.K. Treasury gilt due March 2018 plus a spread of 155 bps;

• £251,565,000 of the £400 million 6.5% senior notes due 2030 based on the 4.75% U.K. Treasury gilt due December 2030 plus 140 bps;

• £535,073,000 of the £800 million 6.8% senior notes due 2038 based on the 4.75% U.K. Treasury gilt due December 2038 plus 145 bps; and

• €902.49 million of the €1.5 billion 7.375% fixed-rate notes due 2014 based on the interpolated euro mid-swap rate plus 10 bps.

The company also will pay accrued interest.

The offers will end at 11 a.m. ET on Feb. 20, with settlement slated for Feb. 28.

Citigroup Global Markets Ltd. (attn.: liability management group, +44 20 7986 8969 or email liabilitymanagement.europe@citi.com) is the dealer manager, and Citibank, NA, London Branch (attn.: exchange team, +44 20 7508 3867 or email exchange.gats@citi.com) is the tender agent.

The offers reflect the company's continued robust liquidity position and are consistent with its recent liability management initiatives, according to a press release.

In 2012, the company reduced its outstanding long-term debt by about $17 billion through liability management initiatives, including the redemptions of trust preferred securities. Along with the natural maturing of long-term debt that requires no refinancing, these initiatives result in lower borrowing costs and reduce the overall level of the company's long-term debt outstanding, the release noted.

The company said it will continue to consider opportunities to repurchase its long-term as well as short-term debt based on several factors, including without limitation the economic value, potential impact on the company's net interest margin and borrowing costs and the overall remaining tenor of its debt portfolio.

The financial services company is based in New York City.

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