Citi prices tender offers, increases cap for 6.125% subordinated notes

By Angela McDaniels

Tacoma, Wash., June 1 – Citigroup Inc. set the prices it will pay in the tender offers for six series of its notes and increase the maximum principal amount of 6.125% subordinated notes due 2036 that it will accept for purchase, according to company news releases.

The company is offering to purchase up to $250 million of the 6.125% subordinated notes, increased from $200 million, and up to $250 million of its 5.875% subordinated notes due 2033.

As previously reported, Citigroup is also offering to purchase any and all of its 3.375% notes due 2023, 5.85% notes due 2034, 5.875% notes due 2037 and 6.875% notes due 2038.

The tender offers began May 15 and will end at 11:59 p.m. ET on June 12.

As of 5 p.m. ET on May 29, the early tender date, holders had tendered

• $692,718,000 of the $1.5 billion outstanding 3.375% notes;

• $45,735,000 of the $259,544,000 outstanding 5.85% notes;

• $50,673,000 of the $173,922,000 outstanding 5.875% notes;

• $273,162,000 of the $594,176,000 outstanding 6.875% notes;

• $222,088,000 of the $819,778,000 outstanding 5.875% subordinated notes; and

• $943.48 million of the $1,601,320,000 outstanding 6.125% subordinated notes.

The company accepted $250 million of the 6.125% notes on a pro rata basis and all of the other notes tendered for purchase. They will be purchased, retired and canceled on the early settlement date, which is expected to be June 3.

Because the principal amount of the 6.125% subordinated notes tendered by the early tender date exceeded the cap, Citigroup will not accept for purchase any additional 6.125% subordinated notes.

Because the principal amount of the 5.875% subordinated notes tendered did not exceed the cap, Citigroup will continue to accept for purchase these notes up to the cap.

Pricing

For each $1,000 principal amount, the total consideration is $1,012.37 for the 3.375% notes, $1,207.53 for the 5.85% notes, $1,218.99 for the 5.875% notes, $1,367.36 for the 6.875% notes, $1,156.99 for the 5.875% subordinated notes and $1,186.71 for the 6.125% subordinated notes.

Pricing for the offers was set at 2 p.m. ET on June 1 using the bid-side price of a reference security plus a fixed spread as follows:

• The 2.125% Treasury note due May 15, 2025 plus 100 basis points for the 3.375% notes;

• The 2.5% Treasury note due Feb. 15, 2045 plus 130 bps for the 5.85% notes;

• The 2.5% Treasury note due Feb. 15, 2045 plus 135 bps for the 5.875% notes;

• The 2.5% Treasury note due Feb. 15, 2045 plus 135 bps for the 6.875% notes;

• The 2.5% Treasury note due Feb. 15, 2045 plus 160 bps for the 5.875% subordinated notes; and

• The 2.5% Treasury note due Feb. 15, 2045 plus 175 bps for the 6.125% subordinated notes.

For each series, the total consideration includes a $30.00 early tender premium for each $1,000 principal amount of notes tendered by the early tender date.

The company also will pay accrued interest to but excluding the applicable settlement date.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) is the dealer manager. 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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