Rebecca Melvin
Princeton, N.J., Sept. 21 - Citigroup Funding Inc. sold $860 million of three-year mandatory exchangeables convertible into shares of Genworth Financial Inc. at par with a 4.583% coupon plus dividend pas through, and 20% initial conversion premium, according to a Citigroup source.
As expected, the issue priced below price talk for the coupon because talk was based on an all-in coupon at 5.35% to 5.85% and an initial conversion premium of 20%.
Currently Genworth common stock pays a common dividend yield of 1.017%, the source said.
Including the dividend, the total is 5.6%, the middle of talk.
Citigroup Global Markets is the bookrunner for the deal, which is part of move by General Electric Co. to reduce its ownership in Genworth, an insurance holding company.
Citigroup priced 29.17 million of the securities, which are in the SynDECS structure, and there is a 15% greenshoe.
In addition to the 21 million Genworth shares that GE will sell to Citigroup, GE also plans to sell 60 million shares of Genworth's stock in a public offering.
If the transactions are completed as planned with all the over allotments, GE will own 27% of Genworth's common stock. That figure is less than the 32% holding that GE initially expected to have following the transactions.
Richmond, Va.-based Genworth will not receive any proceeds from either transaction.
Genworth Financial is an insurance holding company.
| Issuer: | Citigroup Funding Inc.
|
| Reference shares: | Genworth Financial Inc.
|
| Issue: | Mandatory exchangeable notes in the SynDECS structure
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| Bookrunner: | Citigroup Global Markets
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| Amount: | $860.42 million
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| Greenshoe: | 15%
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| Maturity: | Sept. 27, 2008
|
| Dividend: | 4.583% plus dividend pass through
|
| Price: | Par
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| Yield: | 4.583%
|
| Conversion premium: | 20%
|
| Conversion price: | $35.40
|
| Conversion ratio: | 0.4609/0.5531
|
| Call: | Non-callable
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| Price talk: | 6.35-5.85%, up 20%
|
| Pricing date: | Sept. 21, after the close
|
| Settlement date: | Sept. 27
|
| Distribution: | Off shelf
|
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