Citigroup lifts tender cap for two note series, gives early update

By Susanna Moon

Chicago, Feb. 24 – Citigroup Inc. said it revised the tender offer caps for two series of notes and accepted all of the notes tendered by 5 p.m. ET on Feb 23, the early tender date. Later in the day, the company set pricing for the offers.

The company said on Feb. 9 that it was offering to purchase for cash up to $380 million of the three note series. The offer cap since has been revised.

Investors had tendered the following amounts by the early tender deadline:

• $30,106,000 of its outstanding $850 million of 5.875% subordinated notes due 2033, which have a tender cap of $95 million;

• $302.68 million of its outstanding $2 billion of 6.125% subordinated notes due 2036, which have a tender cap of $302.68 million, raised from $220 million; and

• $73,341,000 of its outstanding $667,517,000 of 6.875% senior notes due 2038, which have a tender cap of $73,341,000, up from $65 million.

Because the amount of the tendered 6.125% notes and 6.875% notes exceeded the original series tender cap, Citigroup will not accept for purchase any more of these series tendered after the early tender date, according to a press release.

The tender offer for the 5.875% subordinated notes due 2033 will continue to run until 11:59 p.m. ET on March 9.

Settlement has been set for March 12.

Tendered notes may no longer be withdrawn, as of the early tender date.

Pricing set

Pricing was set at 2 p.m. ET on Feb. 24 using the bid-side price of the 3% Treasury due Nov. 15, 2044 plus a fixed spread of 190 basis points for the 5.875% notes, 200 bps for the 6.125% notes and 155 bps for the 6.875% notes.

The total purchase price for each $1,000 principal amount is $1,169 for the 5.875% notes, $1,207.58 for the 6.125% notes and $1,402.52 for the 6.875% notes.

The reference yield was 2.595%.

Holders who tendered by the early tender deadline will receive the total payment, which includes an early tender premium of $30.00 per $1,000 principal amount of notes.

Those who tender after the early tender date will receive the total payment less the early tender premium.

The offers are contingent on holders tendering an aggregate principal amount of each series of notes greater than or equal to the maximum series tender cap applicable to each series of notes, according to a previous company press release.

Since 2013, Citigroup has redeemed or retired $22.2 billion of securities, excluding exchanged securities, of which $9.8 billion was redeemed or retired in 2014, the release noted.

The bank said it will continue to consider opportunities to redeem or repurchase securities based on economic value, potential impact on its net interest margin and borrowing costs, the overall remaining tenor of Citi’s debt portfolio, capital impact and overall market conditions.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) is the dealer manager for the offers. Global Bondholder Services Corp. (866 470-4300 or 212 430-3774) is the depositary and information agent.

Citigroup is a financial services company based in New York City.

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