Citigroup begins cash tender offers for up to $1.95 billion notes

By Marisa Wong

Morgantown, W.Va., Oct. 28 – Citigroup Inc. said it began offers to purchase for cash any and all of the $950 million of outstanding 6.95% notes due 2018 issued by wholly owned subsidiary Associates First Capital Corp. and up to $1 billion of Citigroup’s $1.66 billion outstanding 5.375% notes due 2020.

Concurrently with the offers, Citigroup is soliciting consents from holders of the 2018 notes to adopt amendments to the indenture governing those notes. The amendments would eliminate substantially all of the restrictive covenants contained in the indenture.

Holders may not tender their 2018 notes without delivering consents or vice versa.

The offers will expire at 11:59 p.m. ET on Nov. 25.

Holders who tender their notes and deliver their consents by 5 p.m. ET on Nov. 10, the early tender date, will be eligible to receive the total consideration, which will include an early tender premium.

The total consideration for the 2018 notes will be calculated using a fixed spread of 75 basis points over the yield based on the bid-side price of the 0.875% U.S. Treasury due Oct. 15, 2018.

The total consideration for the 2020 notes will be calculated using a fixed spread of 90 bps over the yield based on the bid-side price of the 1.375% U.S. Treasury due Sept. 30, 2020.

Pricing will be determined at 2 p.m. ET on Nov. 12.

Holders who tender their notes and deliver consents after the early tender date will receive only the tender offer consideration, which is the total consideration less the early tender premium.

Tenders may be withdrawn and consents may be revoked at any time prior to 5 p.m. ET on Nov. 10.

If the total amount of 2020 notes tendered in the offer exceeds the tender cap, then Citigroup will accept tendered 2020 notes on a pro rata basis.

Settlement of early tenders is expected to be on Nov. 16. The payment date for notes tendered after the early deadline is expected to be Dec. 1.

The New York-based banking and financial services company said it may increase the tender cap for the 2020 notes at any time prior to the final settlement date.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (866 807-2200 or 212 430-3774) is the depositary and information agent.

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