Citigroup to price 10.5%-12.5% ELKS linked to Valero Energy

By Angela McDaniels

Tacoma, Wash., March 26 - Citigroup Funding Inc. plans to price Equity LinKed Securities (ELKS) due April 2009 linked to the common stock of Valero Energy Corp., according to an FWP filing with the Securities and Exchange Commission.

The notes will bear interest at 10.5% to 12.5% per year, with the exact coupon to be determined at pricing. Interest will be payable semiannually.

The payout at maturity will be par of $10 unless Valero Energy stock falls by 30% or more during the life of the notes, in which case the payout will be a number of Valero Energy shares equal to $10 divided by the initial share price or, at the holder's option, the equivalent amount in cash.

The notes will price and settle in April.

The company has applied to list the notes on the American Stock Exchange under the symbol "ELJ."

Citigroup Global Markets Inc. will be the underwriter.

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