Citigroup to buy back up to $3.01 billion of $4.99 billion notes

By Susanna Moon

Chicago, May 15 – Citigroup Inc. said it began cash tender offers to purchase $3.01 billion of six series of notes, or any and all of four series of its notes and up to $450 million of two other series of notes.

The notes had an aggregate principal amount outstanding of $4.99 billion as of May 14.

Pricing will be set at 2 p.m. ET on June 1 using bid-side price of a reference security plus a fixed spread.

The following notes are eligible for the any and all offer, and their total purchase prices will be determined using a reference security and fixed spread as follows:

• $1.5 billion of 3.375% notes due 2023 using the 2.125% Treasury note due May 15, 2025 plus 100 basis points;

• $296,554,000 of 5.85% notes due 2034 using the 2.5% Treasury note due Feb. 15, 2045 plus 130 bps;

• $173,922,000 of 5.875% notes due 2037 using the 2.5% Treasury note due Feb. 15, 2045 plus 135 bps; and

• $594,176,000 of 6.875% notes due 2038 using the 2.5% Treasury note due Feb. 15, 2045 plus 135 bps.

The following notes are eligible for the maximum tender offer, subject in each case to a tender cap, and their total purchase prices will be determined using a reference security and fixed spread as follows:

• $819,778,000 of 5.875% subordinated notes due 2033 with a $250 million tender offer cap, using the 2.5% Treasury note due Feb. 15, 2045 plus 160 bps; and

• $1,601,320,000 of 6.125% subordinated notes due 2036 with a $200 million tender offer cap, using the 2.5% Treasury note due Feb. 15, 2045 plus 175 bps.

Each total purchase price will include a $30 early tender premium for each $1,000 principal amount of notes tendered by 5 p.m. ET on May 29, the early tender date.

The company also will pay accrued interest to but excluding the settlement date, which is expected to be June 3 for early tendered notes.

The tender offers will end at 11:59 p.m. ET on June 12.

Tendered notes may be withdrawn before the early tender deadline.

The offers are consistent with Citigroup’s liability management strategy and reflect its ongoing efforts to enhance the efficiency of its funding and capital structure, according to company press release.

Since 2013, Citigroup has redeemed or retired $25.3 billion of securities, excluding exchanged securities, of which $3.2 billion was redeemed or retired in 2015, the press release noted.

Citigroup said it will continue to consider opportunities to redeem or repurchase securities, based on factors such as the economic value, potential impact on the company's net interest margin and borrowing costs, the overall remaining tenor of Citigroup's debt portfolio, capital impact as well as overall market conditions.

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

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

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