Citigroup tallies early tenders, ups caps under maximum tender offers

By Marisa Wong

Morgantown, W.Va., Dec. 8 – Citigroup Inc. said it upsized some tender caps under the maximum tender offers for its outstanding notes.

On Nov. 17 the company began a tender offer for any and all of the $143.3 million outstanding 7.875% notes due 2025 issued by CitiFinancial Credit Co., as well as maximum tender offers for a number of series of its own outstanding notes.

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. The cap for these notes is unchanged;

• $1,524,520,000 of 6% notes due 2017, with $958,493,000 cap and pricing based on the 0.75% Treasury due Oct. 31, 2017 plus 30 bps. The cap was increased from $915 million;

• $3,374,259,000 of 6.125% notes due 2017, with $2,092,761,000 cap and pricing based on the 0.75% Treasury due Oct. 31, 2017 plus 45 bps. The cap was increased from $2,025,000,000;

• $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. The cap is unchanged;

• $737,482,000 of 3.375% notes due 2023, with $272,864,000 cap and pricing based on the 2.25% Treasury due Nov. 15, 2025 plus 105 bps. The cap was increased from $125 million;

• $2 billion of 3.875% notes due 2023, with $567,486,000 cap and pricing based on the 2.25% Treasury due Nov. 15, 2025 plus 110 bps. The cap was increased from $200 million;

• $189,750,000 of 5.85% notes due 2034, with $29,132,000 cap and pricing based on the 2.875% Treasury due Aug. 15, 2045 plus 160 bps. The cap was increased from $20 million;

• $2,436,000,000 of 8.125% notes due 2039, with $500 million cap and pricing based on the 2.875% Treasury due Aug. 15, 2045 plus 170 bps. The cap was increased from $125 million; 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 cap is unchanged.

As of 5 p.m. ET on Dec. 7, the early tender date of the offers, holders had tendered the following amounts:

• $13,106,000 of CitiFinancial’s 7.875% notes, all of which were accepted;

• $479,614,000 of Citigroup’s 5.5% notes, all of which were accepted;

• $958,493,000 of the 6% notes due 2017, all of which were accepted;

• $2,092,761,000 of the 6.125% notes due 2017, all of which were accepted;

• $1,331,329,000 of the 6.125% notes due 2018, all of which were accepted;

• $272,864,000 of the 3.375% notes due 2023, all of which were accepted;

• $567,486,000 of the 3.875% notes due 2023, all of which were accepted;

• $29,132,000 of the 5.85% notes due 2034, all of which were accepted;

• $1,129,597,000 of the 8.125% notes due 2039, $500 million of which were accepted; and

• $113,086,000 of the 4.95% notes due 2043, $50 million of which were accepted.

All early tendered notes that have been accepted will be purchased on the early settlement date, which is expected to be Dec. 10.

Because the aggregate amount of 6% notes due 2017, 6.125% notes due 2017, 3.375% notes due 2023, 3.875% notes due 2023 and 5.85% notes due 2034 exceeded the original tender cap, Citigroup will not accept for purchase any additional notes of these series tendered after the early deadline. All of the notes of these series that were tendered at or prior to the early tender date will be accepted for purchase on the early settlement date.

Because the aggregate amount of 8.125% notes due 2039 and 4.95% notes due 2043 tendered by the early deadline exceeded the revised tender caps, those notes will be subject to proration. Citigroup will not accept for purchase any additional notes from those series that are tendered after the early deadline.

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 prior company notice.

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

The total payment will include a premium of $30 for each $1,000 principal amount of notes tendered by 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. 28 for remaining tenders.

The company said it also is soliciting consents to eliminate substantially all of the restrictive covenants and events of default contained in the indenture governing the CitiFinancial notes. As of the early tender date, the company has not received the necessary consents to amend those notes.

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

Tendered notes may no longer be withdrawn and consents may no longer be revoked.

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 New York-based banking and financial services company began the offers on Nov. 17.

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