Citigroup gives final results of tender offer for four series of notes

By Toni Weeks

San Luis Obispo, Calif., March 30 – Citigroup Inc. announced the final results of the cash tender offer for four series of notes that began early in March, according to a press release.

As of the expiration date, 11:59 p.m. ET March 27, the company accepted tenders for

• $975,996,000 of its outstanding $1,833,000,000 of 3.953% senior notes due 2016, equal to the amount tendered by the early deadline;

• $988,135,000 of its outstanding $1.5 billion of 1.7% senior notes due 2016, equal to the amount tendered by the early deadline;

• $57.8 million of its outstanding $926,664,000 of 4.587% senior notes due 2015, up from the $57,138,000 of notes tendered by the early deadline; and

• $311,433,000 of its outstanding $1,055,000,000 of 5.85% senior notes due 2016, up from the $310,933,000 of notes tendered by the early deadline.

The company announced the offering on March 2, saying it would accept notes totaling $1,525,000,000 from the four series, then announced on March 16 that the offering was oversubscribed for two series by the early tender deadline of 5 p.m. ET on March 13. It subsequently increased the maximum series tender cap for the 3.953% notes to $975,996,000 from $550 million and the 1.7% notes to $988,135,000 from $450 million, both new caps equal to the exact amounts tendered by the early tender deadline, and left the tender sub-cap ($200 million for the 4.587% notes and $325 million for the 5.85% notes) for the other two series unchanged.

As of the early tender deadline, it accepted $2.33 billion of notes for purchase, and these notes were settled on the early settlement date of March 18.

Following the early tender deadline, holders tendered another $31,000 of the 3.953% notes and another $348,000 of the 1.7% notes, but these notes will be returned to the holders and not accepted for purchase.

The issuer set the pricing for the tender offer at 2 p.m. ET on March 16. Per $1,000 principal amount of notes, it paid the following:

• 1,028.10 for the 4.587% notes;

• $1,037.56 for the 3.953% notes;

• 1$1,010.01 for the 7% notes; and

• $1,066.59 for the 5.85% senior notes.

The amounts include a $30.00 per $1,000 early tender premium that was paid to holders who tendered by the early deadline.

Pricing was set using a yield to maturity of a fixed spread over the yield, which was based on the bid-side price of a reference Treasury security.

The purchase price for the 4.587% notes was set using the 0.25% Treasury due Dec. 15, 2015, with a fixed spread of 55 basis points; for the remaining series, the price was based on the 0.5% Treasury due Feb. 28, 2017 with a fixed spread of 25 bps for the 3.953% notes, 30 bps for the 1.7% notes and 30 bps for the 5.85% notes.

Final settlement is slated for April 1.

Since 2013, Citigroup has redeemed or retired $22.7 billion of securities, excluding exchanged securities, of which $500 million has been redeemed or retired in 2015, according to a previous press release.

Citigroup said the offer is consistent with its liability management strategy and reflects its ongoing efforts to enhance the efficiency of its funding and capital structure.

The bank will continue to consider opportunities to redeem or repurchase securities based on economic value, potential impact on its net interest margin and borrowing costs, the overall remaining tenor of Citi’s debt portfolio, capital impact and overall market conditions, the release said.

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

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

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