Citigroup announces yields, total consideration for note tender offers

By Marisa Wong

Morgantown, W.Va., May 11 – Citigroup Inc. announced the applicable reference yield and total consideration for the offers to purchase for cash any and all of three series of notes and up to a maximum amount of 10 more series of notes.

Pricing was set using a yield to maturity calculated as a fixed spread specified over a reference yield, which was based on the bid-side price of the reference U.S. Treasury security at 2 p.m. ET on May 11.

The total consideration for each $1,000 principal amount under the any-and-all offer is as follows:

• $1,217.74 for the 5.85% notes due 2034, based on a yield of 2.556%, referencing the 3% Treasury due Nov. 15, 2045 and a fixed spread of 160 basis points;

• $1,231.53 for the 5.875% notes due 2037, based on a yield of 2.556%, referencing the 3% Treasury due Nov. 15, 2045 and a fixed spread of 165 bps; and

• $1,378.51 for the 6.875% notes due 2038, based on a yield of 2.556%, referencing the 3% Treasury due Nov. 15, 2045 and a fixed spread of 165 bps.

The total consideration for each $1,000 principal amount under the maximum offer is as follows:

• $1,019.51 for the 2.55% notes due 2019, based on the 0.875% Treasury due April 15, 2019 plus 100 bps, with a reference yield of 0.856%;

• $1,019.97 for the 2.5% notes due 2019, based on the 0.875% Treasury due April 15, 2019 plus 100 bps, with a reference yield of 0.856%;

• $1,040.32 for the 3.375% notes due 2023, based on the 1.625% Treasury due Feb. 15, 2026 plus 100 bps, with a reference yield of 1.721%;

• $1,070.36 for the 3.875% notes due 2023, based on the 1.625% Treasury due Feb. 15, 2026 plus 110 bps, with a reference yield of 1.721%;

• $1,059.34 for the 3.75% notes due 2024, based on the 1.625% Treasury due Feb. 15, 2026 plus 120 bps, with a reference yield of 1.721%;

• $1,159.86 for the 5.875% notes due 2033, based on the 3% Treasury due Nov. 15, 2045 plus 195 bps, with a reference yield of 2.556%;

• $1,165.99 for the 6% notes due 2033, based on the 3% Treasury due Nov. 15, 2045 plus 205 bps, with a reference yield of 2.556%;

• $1,198.75 for the 6.125% notes due 2036, based on the 3% Treasury due Nov. 15, 2045 plus 205 bps, with a reference yield of 2.556%;

• $1,156.42 for the 4.95% notes due 2043, based on the 3% Treasury due Nov. 15, 2045 plus 145 bps, with a reference yield of 2.556%; and

• $1,100.15 for the 5.3% notes due 2044, based on the 3% Treasury due Nov. 15, 2045 plus 210 bps, with a reference yield of 2.556%.

Some tender caps increased

Earlier on Wednesday, Citigroup increased the tender cap for six series of notes, with the cap for five series at the amount tendered by 5 p.m. ET on May 10, the early tender date, and the company said it plans to accept those early tendered notes for purchase, with settlement on May 13.

The tender cap remains unchanged for the 2.55% notes due 2019, 5.875% notes due 2033 and 6.125% notes due 2036, the prior release added.

In the any-and-all offer, investors had tendered the following amounts:

• $8,244,000 of the $160,618,000 5.85% notes due 2034;

• $2.34 million of the $117,571,000 5.875% notes due 2037; and

• $7,077,000 of the $282,926,000 6.875% notes due 2038.

In the maximum tender, the company is offering to buy up to a series cap with pricing to be set using a reference security plus a spread.

Investors had tendered the following amounts as of the early deadline:

• $296,907,000 of the $2 billion 2.55% notes due 2019 with a series cap unchanged at $300 million;

• $444.99 million of the $2 billion 2.5% notes due 2019 with a series cap of $444.99 million, up from $300 million;

• $98,392,000 of the $464,618,000 3.375% notes due 2023 with a series cap of $98,392,000, up from $70 million;

• $458,163,000 of the $1,432,514,000 3.875% notes due 2023 with a series cap of $458,163,000, up from $215 million;

• $606,816,000 of the $1.23 billion 3.75% notes due 2024 with a series cap of $606,816,000, up from $190 million;

• $34,199,000 of the $551,515,000 5.875% notes due 2033 with a series cap unchanged at $50 million;

• $104,775,000 of the $673,695,000 6% notes due 2033 with the series cap unchanged at $20 million;

• $47,483,000 of the $724,271,000 6.125% notes due 2036 with a series cap unchanged at $60 million;

• $224.26 million of the $428,857,000 4.95% notes due 2043 with a series cap of $224.26 million, up from $65 million; and

• $99,308,000 of the $1 billion 5.3% notes due 2044 with a series cap of $45 million, up from $20 million.

The tender offers began April 27 and will continue until 11:59 p.m. ET on May 24. Tendered notes may no longer be withdrawn.

Investors may continue to tender notes in the any-and-all offers.

But because the offers have been oversubscribed for several series – the 2.5% notes due 2019, 3.375% notes due 2023, 3.875% notes due 2023, 3.75% notes due 2024 and 4.95% notes due 2043 – no more of those notes will be accepted for purchase.

In addition, the revised tender caps have been reached for the 6% notes due 2033 and 5.3% notes due 2044, and those tendered notes will be purchased on a prorated basis. Citigroup said it will not accept for purchase any more of these notes tendered after the early deadline.

As previously announced, the total purchase price includes a $30 early tender premium for each $1,000 principal amount of notes tendered by 5 p.m. ET on May 10, the early tender date.

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

The company also will pay accrued interest up to but excluding the settlement date, which will be May 13 for early tendered notes and May 27 for remaining tenders.

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

The offers are part of Citigroup’s liability management strategy and reflect its efforts to improve its funding and capital structure, according to the announcement on April 27.

Since 2014, Citigroup has redeemed or retired $28.9 billion of securities, reducing Citigroup’s overall funding costs.

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

The banking and financial services company is based in New York.

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