Citigroup tenders for 7.875% notes, capped amount of numerous series

By Susanna Moon

Chicago, Nov. 19 – Citigroup Inc. said it began a tender offer for any and all of notes issued by CitiFinancial Credit Co., as well as maximum tender offers for a number of series of its own outstanding notes.

The purchase prices will be set using a yield to maturity equal to a fixed spread over the reference yield, which will be based on the bid-side price of a U.S. Treasury security at 2 p.m. ET on Dec. 8, according to a company notice.

In the first offer, the Citi is tendering for the $143.3 million outstanding 7.875% notes due 2025 issued by CitiFinancial, formerly Commercial Credit Co.

Pricing for the 7.875% notes will be set using the 2.25% Treasury note due Nov. 15, 2025 plus 105 basis points.

In the maximum tender offers, Citigroup is tendering for a capped amount of the following note series issued by Citigroup, with pricing to be set using a reference U.S. Treasury security plus a fixed spread:

• $1,018,593,000 of 5.5% notes due 2017, with $615 million cap and pricing based on the 0.75% Treasury due Oct. 31, 2017 plus 30 bps;

• $1,524,520,000 of 6% notes due 2017, with $915 million cap and pricing based on the 0.75% Treasury due Oct. 31, 2017 plus 30 bps;

• $3,374,259,000 of 6.125% notes due 2017, with $2,025,000,000 cap and pricing based on the 0.75% Treasury due Oct. 31, 2017 plus 45 bps;

• $2,268,894,000 of 6.125% notes due 2018, with $1,365,000,000 cap and pricing based on the 1.25% Treasury due Nov. 15, 2018 plus 40 bps;

• $737,482,000 of 3.375% notes due 2023, with $125 million cap and pricing based on the 2.25% Treasury due Nov. 15, 2025 plus 105 bps;

• $2 billion of 3.875% notes due 2023, with $200 million cap and pricing based on the 2.25% Treasury due Nov. 15, 2025 plus 110 bps;

• $189,750,000 of 5.85% notes due 2034, with $20 million cap and pricing based on the 2.875% Treasury due Aug. 15, 2045 plus 160 bps;

• $2,436,000,000 of 8.125% notes due 2039, with $125 million cap and pricing based on the 2.875% Treasury due Aug. 15, 2045 plus 170 bps; and

• $478,858,000 of 4.95% notes due 2043, with $50 million cap and pricing based on the 2.875% Treasury due Aug. 15, 2045 plus 155 bps.

The total payment will include a premium of $30 for each $1,000 principal amount of notes tendered by 5 p.m. ET on Dec. 7, the early tender date.

Holders who tender their notes after the early deadline will receive the tender offer payment, or the total amount less the early premium.

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

The tender offers will end at 11:59 p.m. ET on Dec. 21, with settlement following on Dec. 10 for early tendered notes and on Dec. 28 for remaining tenders.

Tendered notes may be withdrawn and consents may be revoked by the early deadline.

The company said it also is soliciting consents to eliminate substantially all of the restrictive covenants and events of default contained in the notes indenture.

Holders may not tender any notes without giving their consents or give consents without tendering their notes.

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.

The offers are consistent with Citigroup’s liability management strategy and reflect its efforts to enhance the efficiency of its funding and capital structure, the company said. Since 2013, Citigroup has redeemed or retired $33.8 billion of securities, excluding exchanged securities, of which $11.7 billion was redeemed or retired in 2015.

Citigroup said it will continue to look for opportunities to redeem or repurchase securities.

Citigroup is a New York-based banking and financial services company.

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