Citigroup tenders for up to $500 million 6%, 6.125% subordinated notes

By Angela McDaniels

Tacoma, Wash., June 9 – Citigroup Inc. is offering to purchase up to $100 million principal amount of its $1 billion of outstanding 6% subordinated notes due 2033 and up to $400 million principal amount of its $1,351,320,000 of outstanding 6.125% subordinated notes due 2036, according to a company news release.

The offers will expire at 11:59 p.m. ET on July 7.

Holders who tender by 5 p.m. ET on June 22, the early tender date, and whose notes are accepted will receive the total consideration, which includes an early tender premium of $30 for each $1,000 principal amount of notes.

The total consideration with respect to each series of notes will be equal to the price that equates to a yield to maturity equal to the applicable fixed spread over the applicable yield, which shall be based on the bid-side price of the 2.5% Treasury due Feb. 15, 2045 at 2 p.m. ET on June 23.

The fixed spread is 180 basis points for the 6% notes and 185 bps for the 6.125% notes.

The company will also pay accrued interest.

If the principal amount of notes of any series tendered in an offer exceeds the cap for that series, Citigroup will accept tendered notes of that series on a pro rata basis.

The company currently expects to settle notes tendered by the early tender date on June 25.

If an offer is fully subscribed up to the cap for that series of notes as of the early tender date, then any notes of that series that are tendered after the early tender date will not be accepted for purchase.

An offer for a series of notes that is subscribed over the cap for that series as of the early tender date will be subject to proration.

If an offer for a series of notes is not fully subscribed up to the cap for that series as of the early tender date and is fully subscribed up to the cap for that series as of the expiration date, additional notes of that series will be accepted for purchase up to the cap, subject to possible proration.

The tender offers are subject to, and conditional upon, the satisfaction or waiver of a number of conditions, including the condition that holders tender a principal amount of each series of notes greater than or equal to the cap for that series.

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

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

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