Filed Pursuant to Paragraph (b)
of Rule 424
Registration No. 33-64574
PROSPECTUS SUPPLEMENT
(To Prospectus Dated January 26, 1995)
U.S. $5,000,000,000 Global Medium-Term Senior Notes, Series C
U.S. $1,000,000,000 Global Medium-Term Subordinated Notes, Series C
Due from 9 Months to 60 Years from Date of Issue
Citicorp is offering hereby from time to time its Global Medium-Term Senior
Notes, Series C (the "Senior Notes") and its Global Medium-Term Subordinated
Notes, Series C (the "Subordinated Notes", and together with the Senior Notes,
the "Notes"). The Notes offered by this Prospectus Supplement are offered in the
United States. The Senior Notes are offered in an aggregate principal amount of
up to U.S.$5,000,000,000 (including, in the case of Senior Notes denominated in
a foreign currency, the equivalent thereof at the Market Exchange Rate (as
defined herein) on the date of sale of such Senior Notes (the "Trade Date")),
subject to reduction as a result of the sale by Citicorp outside the United
States of Citicorp's Global Medium-Term Senior Notes, Series D. The Subordinated
Notes are offered in an aggregate principal amount of up to U.S. $1,000,000,000
(including, in the case of Subordinated Notes denominated in a foreign currency,
the equivalent thereof at the Market Exchange Rate on the applicable Trade
Date), subject to reduction as a result of the sale by Citicorp outside the
United States of Citicorp's Global Medium-Term Subordinated Notes, Series D. See
"Description of Notes" and "Plan of Distribution of Notes" herein. Each Note
shall have a term to Stated Maturity from 9 months to 60 years from its date of
original issuance (each, an "Issue Date"), as selected by the initial purchaser
and agreed to by Citicorp or as determined by Citicorp prior to its Issue Date.
The Senior Notes are unsecured obligations of Citicorp and the Subordinated
Notes are unsecured and subordinated obligations of Citicorp as described in the
accompanying Prospectus under "Description of Notes". Unless otherwise provided
in the applicable Pricing Supplement, payment of the principal of the
Subordinated Notes may be accelerated only in the case of certain events
involving the bankruptcy, insolvency or reorganization of Citicorp. There is no
right of acceleration of payment of the Subordinated Notes in the case of a
default in the performance of any covenant of Citicorp, including the payment of
principal or interest. See "Description of Notes--Defaults; Events of Default"
in the Prospectus.
(Continued on next page)
THESE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING
SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Agents'
Price to Commissions or Proceeds to
Public (1) Discounts (2) Company (2)(3)
---------- -------------- --------------
Per Note 100% .125%-1.00% 99.875%-99.00%
Total (4) $6,000,000,000 $7,500,000-$60,000,000 $5,992,500,000-$5,940,000,000
(1) Unless otherwise indicated in a Pricing Supplement, Notes will be issued at
100% of their principal amount.
(2) Citicorp will pay Bear, Stearns & Co. Inc., Citicorp Securities, Inc., CS
First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation, Goldman, Sachs & Co., Lehman Brothers, Lehman Brothers Inc.
(including its affiliate Lehman Government Securities Inc.), Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, PaineWebber Incorporated, Salomon Brothers Inc, Smith
Barney Inc. and UBS Securities Inc., as agents, and such other agents as
may be named from time to time (the "Agents"), a commission (or grant a
discount) ranging from .125% to 1.00% of the principal amount of any Note,
depending on its Stated Maturity, sold through any such Agent, acting as
Agent (or sold to any such Agent as principal in circumstances in which no
other discount is agreed). Citicorp also may sell Notes to any Agent, as
principal, for resale to one or more investors and other purchasers at
varying prices relating to prevailing market prices at the time of resale,
as determined by such Agent, or if so agreed, at a fixed public offering
price.
(3) Before deducting expenses payable by Citicorp.
(4) Or the equivalent thereof in other currencies or currency units.
------------------
Bear, Stearns & Co. Inc. Merrill Lynch & Co.
Citicorp Securities, Inc. Morgan Stanley & Co.
CS First Boston Incorporated
Donaldson, Lufkin & Jenrette PaineWebber Incorporated
Securities Corporation Salomon Brothers Inc
Goldman, Sachs & Co. Smith Barney Inc.
Lehman Brothers UBS Securities Inc.
------------------
The date of this Prospectus Supplement is January 26, 1995
<PAGE>
(Continued from cover page)
Notes will be sold in issues (each, an "Issue") consisting of one or more
Notes of like tenor and having the same Issue Date. Certain terms of each Issue
of Notes will be established by Citicorp at the time of issuance and will be set
forth in a related supplement accompanying this Prospectus Supplement (each such
supplement, a "Pricing Supplement"), including, without limitation, the interest
rate or interest rate index, if any, the Maximum Interest Rate, if any, the
Minimum Interest Rate, if any, the Specified Currency, issue price, Issue Date,
Stated Maturity, Interest Payment Dates, the Spread and/or Spread Multiplier, if
any, the public offering price, redemption or sinking fund provisions, if any
and the Agent for the Notes being offered and its compensation (each of the
foregoing capitalized terms being defined herein). Unless otherwise indicated in
the applicable Pricing Supplement, the Notes, except Zero-Coupon Notes (as
defined herein) will bear interest at a fixed rate or a rate or rates determined
by reference to an interest rate index or other formula, as indicated in the
applicable Pricing Supplement. For a description of certain interest rate
indices see "Description of Notes--Floating Rate Notes" herein. Zero-Coupon
Notes will be issued at a discount from the principal amount payable at Maturity
(as defined herein) thereof, and Holders of such Notes will not receive periodic
payments of interest.
The Notes may be subject to optional redemption, or obligate Citicorp to
redeem or purchase the Notes pursuant to sinking fund or analogous provisions or
at the option of the Holder thereof, in each case as indicated in the applicable
Pricing Supplement. See "Description of Notes--General". If so provided in the
applicable Pricing Supplement, Notes may be denominated in a foreign currency or
currency unit (a "Specified Currency") designated by Citicorp ("Foreign Currency
Notes"). The Notes may also be issued with the principal amount thereof payable
at Maturity and the interest payable thereon to be determined by reference to
one or more financial or other indices ("Indexed Notes"), as specified in the
applicable Pricing Supplement.
The Notes will be represented by one or more permanent global Notes,
registered in the name of The Depository Trust Company, as Depositary (the
"Depositary"), or a nominee of the Depositary (each beneficial interest in a
permanent global Note being referred to herein as a "Book-Entry Note") or,
if so specified in the applicable Pricing Supplement, will be issued in
definitive form. Book-Entry Notes will only be evidenced by, and transfers
thereof will be effected only through, records maintained by the Depositary and
its participants. Except as described herein under "Description of
Notes--Book-Entry Notes", owners of Book-Entry Notes will not be
entitled to receive physical delivery of Notes in definitive form and the
Depositary, and not the owners of beneficial interests in the Notes, will be
considered the Holders thereof.
Unless otherwise provided in the applicable Pricing Supplement, the Notes
will be issued in fully registered form in denominations of U.S. $50,000 and
integral multiples of U.S. $1,000 in excess thereof, or, in the case of Foreign
Currency Notes, in the denominations indicated in the applicable Pricing
Supplement. See "Special Provisions Relating to Foreign Currency Notes".
The Notes are offered on a continuous basis by Citicorp through the Agents,
each of which has agreed to use its reasonable best efforts to solicit offers to
purchase the Notes. Citicorp may also sell Notes to any Agent acting as
principal for resale to one or more investors and other purchasers. Citicorp
also has reserved the right to sell Notes through additional agents or directly
to investors on its own behalf. No commission will be payable nor will a
discount be allowed on any direct sales by Citicorp. The Notes will not be
listed on any securities exchange, unless otherwise indicated in the applicable
Pricing Supplement, and there can be no assurance that the Notes offered by this
Prospectus Supplement will be sold or that there will be a secondary market for
the Notes. Citicorp reserves the right to withdraw, cancel or modify the offer
made hereby without notice. Citicorp or any Agent may reject any offer to
purchase Notes, in whole or in part. See "Plan of Distribution of Notes" herein.
This Prospectus Supplement and Prospectus may be used by Citicorp Securities,
Inc. ("CSI"), a wholly owned subsidiary of Citicorp, in connection with offers
and sales related to secondary market transactions in the Notes. CSI may act as
principal or agent in such transactions. Such sales will be made at prices
related to prevailing market prices at the time of sale.
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus
Supplement, any Pricing Supplement or the Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by Citicorp or the Agents. This Prospectus Supplement, any Pricing Supplement
and the Prospectus do not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the securities offered hereby nor do they
constitute an offer to sell or a solicitation of an offer to buy the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction. The delivery of this Prospectus
Supplement, any Pricing Supplement and the Prospectus at any time does not imply
that the information they contain is correct as of any time subsequent to their
respective dates.
S-2
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
Page No.
-------
Description of Notes .................................................. S-4
General ............................................................. S-4
Interest ............................................................ S-5
Fixed Rate Notes .................................................... S-6
Floating Rate Notes ................................................. S-6
Book-Entry Notes .................................................... S-12
Special Provisions Relating to Foreign Currency Notes ................. S-13
General ............................................................. S-13
Payment of Principal, Premium and Interest .......................... S-14
Payment Currency .................................................... S-15
Foreign Currency Risks ................................................ S-15
General ............................................................. S-15
Exchange Rates and Exchange Controls ................................ S-15
Judgments ........................................................... S-16
Plan of Distribution of Notes ......................................... S-16
Validity of the Notes ................................................. S-17
Prospectus
Available Information ................................................. 3
Incorporation of Certain Documents by Reference ....................... 3
Citicorp .............................................................. 3
Holding Company ..................................................... 3
Use of Proceeds ....................................................... 4
Ratios of Income to Fixed Charges ..................................... 5
Description of Notes .................................................. 5
General ............................................................. 6
Form, Exchange, Registration and Transfer ........................... 7
Payment and Paying Agents ........................................... 8
Temporary Global Notes .............................................. 9
Permanent Global Notes .............................................. 9
Limitations on Liens on Stock of Citibank ........................... 10
Defaults; Events of Default ......................................... 10
Meetings, Modification and Waiver ................................... 11
Consolidation, Merger and Sale of Assets ............................ 12
Assumption of Obligations ........................................... 12
Notices ............................................................. 13
Title ............................................................... 13
Replacement of Notes and Coupons .................................... 13
Defeasance and Covenant Defeasance .................................. 13
Subordination ....................................................... 14
Governing Law ....................................................... 15
Concerning the Trustees ............................................. 15
Limitations on Issuance of Euro-Notes ............................... 15
Foreign Currency Risks ................................................ 17
General ............................................................. 17
Exchange Rates and Exchange Controls ................................ 17
United States Taxation ................................................ 17
United States Holders ............................................... 17
Payments of Interest ................................................ 18
Original Issue Discount ............................................. 18
Notes Purchased at a Premium ....................................... 22
Indexed Notes ....................................................... 22
Purchase, Sale and Retirement of Notes .............................. 22
Exchange of the Specified Currency .................................. 23
Bearer Notes ........................................................ 23
United States Alien Holders ......................................... 23
Backup Withholding and Information Reporting ........................ 23
Plan of Distribution .................................................. 24
Validity of Securities ................................................ 25
Experts ............................................................... 25
S-3
<PAGE>
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms and provisions of Notes
set forth under the heading "Description of Notes" in the accompanying
Prospectus, to which description reference is hereby made. Capitalized terms not
defined herein have the meanings assigned to such terms in the accompanying
Prospectus and the Senior Indenture, in the case of Senior Notes, and the
Subordinated Indenture, in the case of the Subordinated Notes (each as defined
below). The following description of the Notes will apply unless otherwise
stated in the applicable Pricing Supplement.
General
The Senior Notes offered hereby will be issued under the Indenture, dated
as of September 1, 1989, between Citicorp and United States Trust Company of New
York, as Trustee (the "Senior Trustee"), as supplemented by a First Supplemental
Indenture dated as of September 25, 1990 between Citicorp and the Senior Trustee
(such Indenture, together with such First Supplemental Indenture and any
additional supplemental indentures thereto, is hereinafter referred to as the
"Senior Indenture"). The Subordinated Notes offered hereby will be issued under
the Indenture, dated as of April 1, 1991, between Citicorp and Chemical Bank, as
Trustee (the "Subordinated Trustee" and together with the Senior Trustee, the
"Trustees"), as supplemented by a First Supplemental Indenture dated as of
November 27, 1992 between Citicorp and the Subordinated Trustee (such Indenture,
together with such First Supplemental Indenture and any additional supplemental
indentures thereto, is hereinafter referred to as the "Subordinated Indenture";
the Subordinated Indenture together with the Senior Indenture, the "Indentures";
and each, an "Indenture"). The Senior Notes and the Subordinated Notes each
constitute a single series for purposes of the applicable Indenture and are
limited to an aggregate principal amount of up to U.S. $5,000,000,000 in the
case of the Senior Notes, and up to U.S. $1,000,000,000 in the case of the
Subordinated Notes (including, in the case of Foreign Currency Notes, the
equivalent thereof at the Market Exchange Rate on the applicable Trade Date in
the Specified Currency), subject to reduction as the result of the sale by
Citicorp outside the United States of Citicorp's Global Medium-Term Senior
Notes, Series D (in the case of the Senior Notes) and Citicorp's Global
Medium-Term Subordinated Notes, Series D (in the case of the Subordinated
Notes), or by or pursuant to action of Citicorp's Board of Directors, provided
that no such reduction will affect any Note already issued or as to which an
offer to purchase has been accepted by Citicorp. See "Plan of Distribution of
Notes" herein. The foregoing limits, however, may be increased by Citicorp if in
the future it determines that it may wish to sell additional Notes. The
following description of the particular terms of the Notes applies to definitive
Notes and to any permanent global Note or Notes representing Book-Entry Notes.
For a description of special provisions that apply to Book-Entry Notes, see
"Book-Entry Notes" below.
The Senior Notes will be unsecured and will rank pari passu with all other
unsecured and unsubordinated indebtedness of Citicorp. The Subordinated Notes
will be unsecured and will rank pari passu with all other unsecured and
subordinated indebtedness of Citicorp other than subordinated indebtedness as to
which, in the instrument evidencing or creating the same or pursuant to which
the same is outstanding, it is provided that such indebtedness is junior to the
Subordinated Notes.
The Notes will be issuable only in fully registered form and, unless
otherwise provided in the applicable Pricing Supplement, the Notes, other than
Foreign Currency Notes, will be issuable only in denominations of U.S. $50,000
and integral multiples of U.S. $1,000 in excess thereof. For a description of
the denominations of Foreign Currency Notes, see "Special Provisions Relating to
Foreign Currency Notes" herein.
The Notes may be issued as Original Issue Discount Notes. An "Original
Issue Discount Note" is a Note, including any Zero-Coupon Note, which is issued
at a price lower than the amount payable at the Stated Maturity thereof and
which provides that upon redemption or acceleration of the Stated Maturity
thereof an amount less than the principal amount payable at the Stated Maturity
thereof and determined in accordance with the terms thereof shall become due and
payable. Original Issue Discount Notes, as well as certain other Notes offered
hereunder, may, for United States federal income tax purposes, be considered
"Discount Notes". Certain Holders of, or owners of beneficial interests in,
Original Issue Discount Notes having a Stated Maturity of more than one year
from their date of issue will have to include original issue discount in income
as it accrues, generally before receipt of cash attributable to such income.
Additional United States federal income tax consequences of the ownership of
Discount Notes are described under "United States Taxation--Original Issue
Discount" in the accompanying Prospectus. A "Zero-Coupon Note" means a Note that
does not bear interest prior to Maturity.
S-4
<PAGE>
The Notes may be issued as Indexed Notes, as set forth in the applicable
Pricing Supplement. Holders of Indexed Notes may receive a principal amount at
Maturity that is greater than or less than the face amount of such Notes
depending upon the fluctuation of the relative value, rate or price of the
specified index. The Pricing Supplement relating to an Issue of Indexed Notes
will contain specific information pertaining to the method for determining the
principal amount payable at Maturity, a historical comparison of the relative
value, rate or price of the specified index, the face amount of the Indexed
Note, certain additional tax considerations, and the manner of calculation of
the amount principal or interest payable if the specified index is no longer
calculated or published. See "Foreign Currency Risks" below.
The "Stated Maturity" of an Issue of Notes shall be the date specified in
the applicable Pricing Supplement as the fixed date on which the principal of
such Notes is due and payable. The "Maturity" of an Issue of Notes shall be the
date on which the principal of such Notes becomes due and payable, whether at
Stated Maturity, by acceleration, redemption or otherwise.
The applicable Pricing Supplement will indicate either that a Note cannot
be redeemed prior to its Stated Maturity or that a Note will be redeemable at
the option of Citicorp on or after a specified date prior to its Stated Maturity
at a specified price or prices (which may include a premium), together with
accrued interest to the date of redemption. In addition, the applicable Pricing
Supplement will indicate whether Citicorp will be obligated to redeem or
purchase a Note pursuant to any sinking fund or analogous provisions or at the
option of the Holder thereof. If Citicorp will be so obligated, the applicable
Pricing Supplement will indicate the period or periods within which and the
price or prices at which the applicable Notes will be redeemed or purchased, in
whole or in part, pursuant to such obligation and the other detailed terms and
provisions of such obligation.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars and payments of principal of and any premium
and interest on such Notes will be made in U.S. dollars in the manner described
in this Prospectus Supplement under "Book--Entry Notes" below and in the
accompanying Prospectus under the caption "Description of Notes--Payment and
Paying Agents". If any of the Notes are to be denominated in a Specified
Currency, additional information pertaining to the terms of such Notes and other
matters of interest to the Holders thereof will be described in the applicable
Pricing Supplement. See "Special Provisions Relating to Foreign Currency Notes"
and "Foreign Currency Risks" below and "United States Taxation" in the
accompanying Prospectus.
Payments of principal of and any premium and interest payable at Maturity
on a Note denominated in U.S. dollars will be made in immediately available
funds at the offices of Citibank, N.A. ("Citibank"), as Paying Agent (the
"Paying Agent"), in the Borough of Manhattan, The City of New York, provided
that the Note is presented to the Paying Agent in time for the Paying Agent to
make such payments in such funds in accordance with its normal procedures. With
respect to payments on Foreign Currency Notes at Maturity, see "Special
Provisions Relating to Foreign Currency Notes" below.
The Notes may be presented for registration of transfer or exchange at the
offices of Citibank in the Borough of Manhattan, The City of New York.
For a description of the rights attaching to series of Notes under the
applicable Indenture, see "Description of Notes" in the accompanying Prospectus.
The provisions of the Indentures described under "Description of
Notes--Defeasance and Covenant Defeasance" in the accompanying Prospectus apply
to the Notes.
Interest
Each Note, except a Zero-Coupon Note, will bear interest from and including
its Issue Date or from and including the most recent Interest Payment Date (or,
in the case of a Floating Rate Note with daily or weekly Interest Reset Dates,
the day following the most recent Regular Record Date) with respect to which
interest on such Note (or any predecessor Note) has been paid or duly provided
for at the fixed rate per annum, or at the rate per annum determined pursuant to
the interest rate index specified in the applicable Pricing Supplement, until
the principal thereof is paid or made available for payment. Interest will be
payable on each Interest Payment Date and at Maturity. Interest will be payable
generally to the Person in whose name a Note (or any predecessor Note) is
registered at the close of business on the Regular Record Date next preceding
each Interest Payment Date; provided, however, that interest payable at Maturity
will be payable to the Person to whom principal shall be payable. The first
payment of interest on any Note originally issued between a Regular Record Date
and an Interest Payment Date will be made on
S-5
<PAGE>
the second Interest Payment Date following the Issue Date of such Note to
the registered owner on the Regular Record Date immediately preceding such
Interest Payment Date.
Each Note, except a Zero-Coupon Note, will bear interest at either (a) a
fixed rate or rates(a "Fixed Rate Note") or (b) a variable rate determined by
reference to an interest rate index or formula (a "Floating Rate Note"), which
may be adjusted by adding or subtracting the Spread and/or multiplying by the
Spread Multiplier, unless otherwise indicated in the applicable Pricing
Supplement. Holders of Zero-Coupon Notes will receive no periodic payments of
interest on such Notes.
Unless otherwise specified in the applicable Pricing Supplement, interest
shall accrue on the Notes of any Issue from the period beginning on and
including the Issue Date of such Notes and ending on and excluding the first
Interest Payment Date with respect to such Notes and each successive period
beginning on and including each Interest Payment Date and ending on and
excluding the next successive Interest Payment Date or at Maturity (each such
period, an "Interest Period").
In addition to any Maximum Interest Rate which may be applicable to any
Note, the interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law, as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. The limit does not apply to Notes
in which U.S. $2,500,000 or more has been invested.
Fixed Rate Notes
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Note. Unless
otherwise indicated in the applicable Pricing Supplement, the Interest Payment
Dates for Fixed Rate Notes will be February 15 and August 15 of each year and at
Maturity and the Regular Record Dates for Fixed Rate Notes will be the February
1 or August 1, as the case may be, next preceding such Interest Payment Dates.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments for Fixed Rate Notes shall be the amount of interest accrued to but
excluding the relevant Interest Payment Date. Interest on such Notes will be
computed on the basis of a 360-day year of twelve 30-day months. Unless
otherwise specified in the applicable Pricing Supplement, if any Interest
Payment Date or the Maturity with respect to a Fixed Rate Note falls on a day
that is not a Market Day (as defined below), payments due shall be made on the
next succeeding Market Day as if they were made on the date such payments were
due and no interest will accrue on the amounts so payable for the period from
and after such Interest Payment Date or such Maturity, as the case may be.
Floating Rate Notes
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate index for such Floating Rate Note. Such index may be:
(a) the Commercial Paper Rate, in which case such Note will be a "Commercial
Paper Rate Note"; (b) LIBOR, in which case such Note will be a "LIBOR Note"; (c)
the Treasury Rate, in which case such Note will be a "Treasury Rate Note"; (d)
the Certificate of Deposit Rate, in which case such Note will be a "CD Rate
Note"; (e) the Federal Funds Effective Rate, in which case such Note will be a
"Federal Funds Rate Note"; (f) the Prime Rate, in which case such Note will be a
"Prime Rate Note"; (g) the Constant Maturity Treasury Rate, in which case such
Note will be a "CMT Rate Note"; or (h) such other interest rate index or formula
as is set forth in such Pricing Supplement. In addition, such Pricing Supplement
will specify for each Floating Rate Note the following terms, if applicable:
Calculation Dates; Initial Interest Rate; Maximum Interest Rate; Minimum
Interest Rate; Spread and/or Spread Multiplier; Interest Payment Dates; Regular
Record Dates; Index Maturity; Interest Determination Dates and Interest Reset
Dates (each as defined below). "Spread" means the number of basis points, as
specified in the applicable Pricing Supplement, as being applicable to the
interest rate for a particular Floating Rate Note and "Spread Multiplier" means
the percentage, as specified in the applicable Pricing Supplement, as being
applicable to the interest rate for a particular Floating Rate Note.
"Calculation Date" means the date, as specified in the applicable Pricing
Supplement, on which the Calculation Agent is to calculate the interest rate for
a Floating Rate Note.
"Market Day" means (a) with respect to any Note, any day that is not a
Saturday or Sunday and that, in The City of New York, is not a day on which
banking institutions generally are authorized or obligated by law or executive
order to close, (b) with respect to LIBOR Notes only, any such day on which
dealings in deposits in U.S. dollars are transacted in the London interbank
market, (c) with respect to Foreign Currency Notes, other than such Notes
S-6
<PAGE>
denominated in European Currency Units ("ECUs") only, any day that, in the
principal financial center of the country of the Specified Currency, is not a
day on which banking institutions generally are authorized or obligated by law
to close, and (d) with respect to Foreign Currency Notes denominated in ECUs
only, any day that is designated as an ECU settlement day by the ECU Banking
Association in Paris or otherwise generally regarded in the ECU interbank market
as a day on which payments in ECUs may be made.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each, an "Interest Reset
Date"), as specified in the applicable Pricing Supplement. The interest rate in
effect from the Issue Date of a Floating Rate Note to the first Interest Reset
Date will be the "Initial Interest Rate" and will be set forth or calculated as
described in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing Supplement, the interest rate in effect for the ten days
immediately prior to Maturity of any installment of principal will be that in
effect on the tenth day preceding the Maturity. If any Interest Reset Date for
any Floating Rate Note would otherwise be a day that is not a Market Day, the
Interest Reset Date for such Floating Rate Note shall be the next succeeding
Market Day, except that in the case of a LIBOR Note, if such Market Day is in
the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Market Day.
"Interest Determination Date" means, with respect to any Note, the date, as
specified in the applicable Pricing Supplement, as of which the rate of interest
in effect on an Interest Reset Date will be determined. Unless otherwise
specified in the applicable Pricing Supplement, the Interest Determination Date
pertaining to an Interest Reset Date for (a) a Floating Rate Note other than a
Treasury Rate Note will be the second Market Day preceding such Interest Reset
Date and (b) a Treasury Rate Note will be the day of the week in which such
Interest Reset Date falls on which Treasury bills are auctioned. Treasury bills
are normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on a day
which would otherwise be an Interest Reset Date for a Treasury Rate Note, then
such Interest Reset Date shall be the first Market Day immediately following
such auction date.
If specified in the applicable Pricing Supplement, a Floating Rate Note may
have either or both of the following: (a) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest which may accrue during any
Interest Period (a "Maximum Interest Rate") and (b) a minimum numerical interest
rate limitation, or floor, on the rate of interest which may accrue during any
Interest Period (a "Minimum Interest Rate").
"Interest Payment Dates" means, with respect to any Note, the dates, as
specified in the applicable Pricing Supplement, on which accrued interest on
such Note is due and payable, provided, however, if an Interest Payment Date
with respect to any Floating Rate Note (other than an Interest Payment Date
occurring on Maturity) would otherwise be a day that is not a Market Day, such
Interest Payment Date will be the next succeeding Market Day, except that, in
the case of a LIBOR Note, if the next succeeding Market Day is in the next
succeeding calendar month, such Interest Payment Date will be the immediately
preceding Market Day. If the Maturity with respect to any Floating Rate Note
would otherwise fall on a day that is not a Market Day, any payments due shall
be made on the next succeeding Market Day and no interest on such payments will
accrue for the period from and after such Maturity. The "Regular Record Date"
with respect to Floating Rate Notes shall be the date 15 calendar days prior to
each Interest Payment Date, whether or not such date shall be a Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments for a Floating Rate Note shall be the amount of interest accrued to,
but excluding, the Interest Payment Date or Maturity; provided, however, that if
the Interest Reset Dates with respect to any Floating Rate Note are daily or
weekly, interest payable on any Interest Payment Date, other than interest
payable on any date on which principal on any such Note is payable, will include
interest accrued to and including the next preceding Regular Record Date.
Accrued interest on any Floating Rate Note from its Issue Date or from the
last date to which interest has been paid or duly provided for is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day from the Issue Date or from the last date to which
interest has been paid or duly provided for, as the case may be, to the date for
which accrued interest is being calculated. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for each such day is computed
by dividing the interest rate applicable to such date by 360 (or by the actual
number of days in the year, in the case of Treasury Rate Notes or CMT Rate
Notes).
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Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation on Floating Rate Notes will be
rounded, if necessary, to the nearest one-hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards, and all
dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upwards).
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect and, if determined, the
interest rate which will become effective as a result of a determination made on
the most recent Interest Determination Date with respect to such Floating Rate
Note. The "Calculation Agent" means the agent appointed by Citicorp to calculate
interest rates under the circumstances specified below for Floating Rate Notes.
Unless otherwise provided in an applicable Pricing Supplement, the Calculation
Agent will be Citibank.
Commercial Paper Rate Notes. Each Commercial Paper Rate Note will bear
interest at the interest rate (calculated with reference to the Commercial Paper
Rate and the Spread and/or Spread Multiplier, if any) specified in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Interest Determination Date,
the Money Market Yield (calculated as described below) of the rate quoted on a
discount basis on such date for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "Commercial Paper". In the event that such rate is not published
prior to 9:00 A.M., New York City time, on the Calculation Date pertaining to
such Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on such Interest Determination Date for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement as published in Composite Quotations under the heading "Commercial
Paper". If such rate is neither published in H.15(519) by 9:00 A.M., New York
City time, on such Calculation Date nor in Composite Quotations by 3:00 P.M.,
New York City time, on such Calculation Date, the Commercial Paper Rate for that
Interest Determination Date will be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates, as
of 11:00 A.M., New York City time, on that Interest Determination Date, of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement placed for an industrial issuer whose senior
unsecured bond rating is "AA", or the equivalent, from a nationally recognized
rating agency; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D X 360
Money Market Yield = ---------- X 100
360-(D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate index is
based, as indicated in the applicable Pricing Supplement. "Composite Quotations"
means the daily statistical release entitled "Composite Quotations for U.S.
Government Securities", or any successor publication, published by the Federal
Reserve Bank of New York. "H.15(519)" means the weekly statistical release
entitled "Statistical Release H.15(519), Selected Interest Rates", or any
successor publication, published by the Board of Governors of the Federal
Reserve System.
LIBOR Notes. Each LIBOR Note will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any) specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions:
(a) With respect to any Interest Determination Date, LIBOR will be, as
specified in the applicable Pricing Supplement, either (i) the arithmetic
mean of the offered rates for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second Market Day immediately following such Interest Determination Date,
which appear on the Reuters Screen LIBO Page (as defined below)
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as of 11:00 A.M., London time, on such Interest Determination Date, if at
least two such offered rates appear on the Reuters Screen LIBO Page, or (ii) the
rate for deposits in U.S. dollars having the Index Maturity specified in the
applicable Pricing Supplement, commencing on the second Market Day immediately
following the Interest Determination Date that appears on the Telerate Screen
Page 3750 (as defined below) as of 11:00 A.M. on that Interest Determination
Date. "Reuters Screen LIBO Page" means the display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London interbank offered
rates of major banks or a comparable display, as determined in the sole
discretion of and selected by the Calculation Agent, of London interbank offered
rates or major bank offered rates, as may be available from a similar service).
"Telerate Screen Page 3750" means the display designated as page "British
Bankers Assoc. Interest Settlement Rates" on the Telerate system, page 3750 (or
such other page or pages as may replace such page on the system for the purpose
of displaying such rates). If fewer than two offered rates appear on the Reuters
Screen LIBO Page, or if no rate appears on Telerate Page 3750, as applicable,
LIBOR for such Interest Determination Date will be determined as described in
(b) below. The selection of the Reuters Screen LIBO Page or the Telerate Screen
Page 3750 shall be as specified in the applicable Pricing Supplement. If neither
Reuters Screen LIBO or Telerate Screen 3750 is specified in the applicable
Pricing Supplement, LIBOR will be determined as if Telerate Screen 3750 had been
specified.
(b) With respect to an Interest Determination Date on which fewer than two
offered rates for the applicable Index Maturity appear on the Reuters Screen
LIBO Page as specified in (a)(i) above, or on which no rate appears on the
Telerate Screen Page 3750 as specified in (a)(ii) above, LIBOR will be
determined on the basis of the rates at approximately 11:00 A.M., London time on
such Interest Determination Date at which deposits in U.S. dollars having the
Index Maturity designated in the applicable Pricing Supplement, commencing on
the second Market Day immediately following such Interest Determination Date and
in a principal amount of not less than U.S. $1,000,000 and representative for a
single transaction in such market at such time, are offered to prime banks in
the London interbank market by four major banks in the London interbank market
selected by the Calculation Agent. The Calculation Agent will request the
principal London office of each of such banks to provide a quotation of its
rate. If at least two such quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR for such Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00
A.M., New York City time, on such Interest Determination Date by three major
banks in The City of New York selected by the Calculation Agent for loans in
U.S. dollars to leading European banks having the applicable Index Maturity
commencing on the second Market Day immediately following such Interest
Determination Date and in a principal amount of not less than U.S. $1,000,000
that is representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR will be LIBOR in
effect on such Interest Determination Date.
Treasury Rate Notes. Each Treasury Rate Note will bear interest at the
interest rate (calculated with reference to the Treasury Rate and the Spread
and/or Spread Multiplier, if any) specified in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date, the rate for the
most recent auction of direct obligations of the United States ("Treasury
bills") having the Index Maturity specified in the applicable Pricing Supplement
as published in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so published by 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury bills
having the Index Maturity specified in the applicable Pricing Supplement are
neither published in H.15(519) by 9:00 A.M., New York City time, on such
Calculation Date, nor otherwise published or reported as provided above by 3:00
P.M., New York City time, on such Calculation Date, or if no such auction is
held in a particular week, then the Treasury Rate will be calculated by the
Calculation Agent and will be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the specified Index Maturity; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate will be the Treasury
Rate in effect on such Interest Determination Date.
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CD Rate Notes. Each CD Rate Note will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any) specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date, the rate on such date
for negotiable certificates of deposit having the Index Maturity specified in
the applicable Pricing Supplement as published in H.15(519) under the heading
"CDs (Secondary Market)". In the event that such rate is not so published by
9:00 A.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the CD Rate will be the rate on such Interest
Determination Date for negotiable certificates of deposit having the Index
Maturity specified in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Certificates of Deposit". If such rate
is neither published in H.15(519) by 9:00 A.M., New York City time, on such
Calculation Date nor in Composite Quotations by 3:00 P.M., New York City time,
on such Calculation Date, the CD Rate for such Interest Determination Date will
be calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date, of three leading nonbank dealers of negotiable U.S.
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the Index Maturity specified in the applicable
Pricing Supplement in a denomination of $5,000,000; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate will be the CD Rate in effect on such
Interest Determination Date.
Federal Funds Rate Notes. Each Federal Funds Rate Note will bear interest
at the interest rate (calculated with reference to the Federal Funds Effective
Rate and the Spread and/or Spread Multiplier, if any) specified in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Effective Rate" means, with respect to any Interest Determination Date,
the rate on that date for Federal Funds having the Index Maturity specified in
the applicable Pricing Supplement as published in H.15(519) under the heading
"Federal Funds (Effective)". In the event that such rate is not so published by
9:00 A.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the Federal Funds Effective Rate will be the rate
on such Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate". If such rate is neither published in
H.15(519) by 9:00 A.M., New York City time, on such Calculation Date nor in
Composite Quotations by 3:00 P.M., New York City time, on such Calculation Date,
the Federal Funds Effective Rate for such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
as of 9:00 A.M., New York City time, on such Interest Determination Date for the
last transaction in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Effective Rate will be the Federal Funds Effective Rate in effect on such
Interest Determination Date.
Prime Rate Notes. Each Prime Rate Note will bear interest at the interest
rate (calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any) specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date, the rate set forth
on such date in H.15(519) under the heading "Bank Prime Loan". In the event that
such rate is not published prior to 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
Reuters Screen NYMF Page (as defined below) as such bank's prime rate or base
lending rate as in effect for that Interest Determination Date. If fewer than
four such rates but more than one such rate appear on the Reuters Screen NYMF
Page for the Interest Determination Date, the Prime Rate will be determined by
the Calculation Agent and will be the arithmetic mean of the prime rates quoted
on the basis of the actual number of days in the year divided by a 360-day
year as of the close of business on such Interest Determination Date by four
major money center banks in The City of New York selected by the Calculation
Agent. If fewer than two such rates appear on the Reuters Screen NYMF Page, the
Prime Rate will be determined by the Calculation Agent on the basis of the rates
furnished in The City of New York by the appropriate number of substitute banks
or trust companies organized and doing business under the laws of the United
States, or any State thereof, having total equity capital of at least U.S.
$500,000,000 and being subject to supervision or examination by Federal or State
authority, selected by the Calculation Agent to provide such rate or rates;
provided,
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<PAGE>
however, that if the banks selected as aforesaid are not quoting as
mentioned in this sentence, the Prime Rate will be the Prime Rate in effect on
such Interest Determination Date. "Reuters Screen NYMF Page" means the display
designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks).
CMT Rate Notes. CMT Rate Notes will bear interest at the rates (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in such CMT Rate Notes and any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any Interest Determination Date, the rate displayed on
the Designated CMT Telerate Page (as defined below) under the caption ". . .
Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . .
Mondays Approximately 3:45 P.M.", under the column for the Index Maturity for
(i) if the Designated CMT Telerate Page is 7055, such Interest Determination
Date and (ii) if the Designated CMT Telerate Page is 7052, the week, or the
month, as set forth in the applicable Pricing Supplement, ended immediately
preceding the week in which the related Interest Determination Date occurs. If
such rate is no longer displayed on the relevant page, or if not displayed by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such Interest Determination Date will be such treasury constant
maturity rate for the Index Maturity as published in the relevant H.15(519). If
such rate is no longer published, or if not published by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for such Interest
Determination Date will be such treasury constant maturity rate for the Index
Maturity (or other United States Treasury rate for the Index Maturity) for the
Interest Determination Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for the Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
mid-market prices as of approximately 3:30 P.M., New York City time, on the
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York (which may include an Agent or its
affiliates) selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Index Maturity and a remaining term to
maturity of not less than such Index Maturity minus one year. If the Calculation
Agent cannot obtain three such Treasury Note quotations, the CMT Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be a yield to maturity based on the arithmetic mean of the secondary market
closing mid-market prices as of approximately 3:30 P.M., New York City
time, on the Interest Determination Date of three Reference Dealers in The City
of New York (from five such Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury Notes with an original maturity of the number of years
that is the next highest to the Index Maturity and a remaining term to maturity
closest to the Index Maturity and in an amount of at least $100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT Rate
will be the CMT Rate in effect on such Interest Determination Date. If two
Treasury Notes with an original maturity as described in the third preceding
sentence have remaining terms to maturity equally close to the Index Maturity,
the quotes for the Treasury Note with the shorter remaining term to maturity
will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
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Book-Entry Notes
Upon issuance, all Book-Entry Notes of the same Issue will be represented
by one or more permanent global Notes (the "Global Notes"). Each Global Note
will be deposited with, or on behalf of the Depositary, located in the Borough
of Manhattan, The City of New York, and will be registered in the name of the
Depositary or a nominee of the Depositary. Unless otherwise specified in the
applicable Pricing Supplement, all Global Notes will be denominated in U.S.
dollars only.
Ownership of Book-Entry Notes will be limited to institutions that have
accounts with the Depositary or its nominee ("participants") or persons that may
hold interests through participants. In addition, ownership of Book-Entry Notes
by participants will only be evidenced by, and the transfer of that ownership
interest will be effected only through, records maintained by the Depositary or
its nominee, as the case may be. Ownership of Book-Entry Notes by persons that
hold through participants will only be evidenced by, and the transfer of that
ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such laws may impair the ability to transfer Book-Entry
Notes.
Citicorp has been advised by the Depositary that upon the issuance of a
Global Note, and the deposit of such Global Note with or on behalf of the
Depositary, the Depositary will immediately credit, on its book-entry
registration and transfer system, the respective principal amounts of the
Book-Entry Notes represented by such Global Note to the accounts of
participants. The accounts to be credited shall be designated by the soliciting
Agent, or by Citicorp if such Notes are offered and sold directly by Citicorp.
Payments of principal of and any premium and interest on Book-Entry Notes
represented by Global Notes registered in the name of or held by the Depositary
or its nominee, will be made to the Depositary or its nominee, as the case may
be, as the registered owner and the Holder of the Global Notes representing such
Book-Entry Notes. Such payments to the Depositary or its nominee, as the case
may be, will be made in immediately available funds at the offices of Citibank,
as Paying Agent, in the Borough of Manhattan, The City of New York, provided
that, in the case of payments of principal and any premium, the Global Notes are
presented to the Paying Agent in time for the Paying Agent to make such payments
in such funds in accordance with its normal procedures. None of Citicorp, the
Trustees or any agent of Citicorp or either Trustee will have any responsibility
or liability for any aspect of the Depositary's records or any participant's
records relating to or payments made on account of Book-Entry Notes or for
maintaining, supervising or reviewing any of the Depositary's records or any
participant's records relating to such Book-Entry Notes.
With respect to payments in respect of Book-Entry Notes represented by a
Global Note which is a Foreign Currency Note, see "Special Provisions Relating
to Foreign Currency Notes".
Citicorp has been advised by the Depositary that upon receipt of any
payment of principal of or any premium or interest in respect of a Global Note,
the Depositary will immediately credit, on its book-entry registration and
transfer system, accounts of participants with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such Global
Note as shown on the records of the Depositary. Payments by participants to
owners of Book-Entry Notes held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in "street name", and
will be the responsibility of such participants.
No Global Note described above may be transferred except as a whole by the
Depositary for such Global Note to a nominee of the Depositary or by a nominee
of the Depositary to another nominee of the Depositary.
Book-Entry Notes represented by a Global Note are exchangeable for
definitive Notes in registered form, of like tenor and of an equal aggregate
principal amount, only if (x) the Depositary notifies Citicorp that it is
unwilling or unable to continue as Depositary for such Global Note or if at any
time the Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (y) Citicorp
in its sole discretion determines that such Book-Entry Notes shall be
exchangeable for definitive Notes in registered form or (z) any event shall have
happened and be continuing which, after notice or lapse of time, or both, would
become an Event of Default with respect to such Notes. Any Global Note
representing Book-Entry Notes that is exchangeable pursuant to the preceding
sentence shall be exchangeable in whole for definitive Notes in registered form,
of like tenor and of
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an equal aggregate principal amount, in denominations of U.S. $50,000 and
integral multiples of U.S. $1,000 in excess thereof. Such definitive Notes shall
be registered in the name or names of such person or persons as the Depositary
shall instruct the Security Registrar. It is expected that such instructions may
be based upon directions received by the Depositary from its participants with
respect to ownership of Book-Entry Notes.
Except as provided above, owners of Book-Entry Notes will not be entitled
to receive physical delivery of Notes in definitive form and will not be
considered the Holders of Notes for any purpose under the applicable Indenture,
and no Global Note representing Book-Entry Notes shall be exchangeable, except
for another Global Note of like denomination and tenor to be registered in the
name of the Depositary or its nominee. Accordingly, each person owning a
Book-Entry Note must rely on the procedures of the Depositary and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a Holder under the
applicable Indenture. Each Indenture provides that the Depositary, as a Holder,
may appoint agents and otherwise authorize participants to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder is entitled to give or take under the applicable
Indenture. Citicorp understands that under existing industry practices, in the
event that Citicorp requests any action of Holders or an owner of a Book-Entry
Note desires to give or take any action a Holder is entitled to give or take
under the Indenture, the Depositary would authorize the participants owning the
relevant Book-Entry Notes to give or take such action, and such participants
would authorize beneficial owners owning through such participants to give or
take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
The Depositary has advised Citicorp that the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
General
The following provisions, which apply to Foreign Currency Notes, supplement
the description of general terms and provisions of Notes set forth in the
accompanying Prospectus and elsewhere in this Prospectus Supplement. For a
description of certain risks associated with Foreign Currency Notes, see
"Foreign Currency Risks" below.
The authorized denominations for particular Foreign Currency Notes will be
indicated in the applicable Pricing Supplement.
Specific information pertaining to the foreign currency or currency units
in which a particular Foreign Currency Note is denominated, including historical
exchange rates and a description of the currency or currency unit and any
exchange controls, will be described in the applicable Pricing Supplement. See
"Foreign Currency Risks--Exchange Rates and Exchange Controls" below.
Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for Foreign Currency Notes in the Specified Currency. At the
present time there are limited facilities in the United States for the
conversion of U.S. dollars into foreign currencies or currency units and vice
versa, and banks generally do not offer non-U.S. dollar checking or savings
account facilities in the United States. However, if requested on or prior to
the fifth Market Day preceding the date of delivery of such Notes, or by such
other day as determined by the Agent who presented such offer to purchase such
Notes to Citicorp, such Agent is prepared to arrange for the conversion of U.S.
dollars into the Specified Currency to enable the purchasers to pay for such
Notes. Each such conversion will be made by such Agent on such terms and subject
to such conditions, limitations and charges as such Agent may from time to time
establish in accordance with its regular foreign exchange practices. All costs
of exchange will be borne by the purchasers of the Foreign Currency Notes.
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Payment of Principal, Premium and Interest
The principal of and any premium and interest on Foreign Currency Notes are
payable by Citicorp in the Specified Currency. Unless otherwise specified in the
applicable Pricing Supplement, the Exchange Rate Agent (as defined below) will
obtain the quotations necessary to convert the amount of all payments of
principal of and any premium and interest on Foreign Currency Notes from the
Specified Currency to U.S. dollars. However, unless otherwise specified in the
applicable Pricing Supplement, the Holder of a Foreign Currency Note may elect
to receive such payments in the Specified Currency as described below.
Any U.S. dollar amount to be received by a Holder of a Foreign Currency
Note will be based on the highest bid quotation in The City of New York received
by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on
the second Market Day preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) for the purchase by the quoting dealer of the Specified Currency for U.S.
dollars for settlement on such payment date in the aggregate amount of the
Specified Currency payable to all holders of Foreign Currency Notes scheduled to
receive U.S. dollar payments and at which the applicable dealer commits to
execute a contract. If such bid quotations are not available, payments will be
made in the Specified Currency. All currency exchange costs will be borne by the
Holder of the Foreign Currency Note by deductions from such payments. "Exchange
Rate Agent" means the agent appointed by Citicorp to obtain the quotations
necessary to convert the amount of principal and any premium and interest
payments on Foreign Currency Notes from the Specified Currency into U.S.
Dollars. Unless otherwise indicated in the applicable Pricing Supplement, the
Exchange Rate Agent will be Citibank.
Unless otherwise specified in the applicable Pricing Supplement, a Holder
of a Foreign Currency Note may elect to receive payment of the principal of and
any premium and interest on such Note in the Specified Currency by transmitting
a request for such payment to Citibank in the Borough of Manhattan, The City of
New York, as Paying Agent, on or prior to the Regular Record Date or at least
sixteen days prior to Maturity, as the case may be. Such request may be in
writing (mailed or hand delivered) or by cable, telex or other form of facsimile
transmission. A Holder of a Foreign Currency Note may make such election with
respect to all principal and any premium and interest payments and need not file
a separate election for each payment. Such election will remain in effect until
revoked by written notice to the Paying Agent, but written notice of any such
revocation must be received by the Paying Agent on or prior to the relevant
Regular Record Date or at least sixteen days prior to Maturity, as the case may
be. Holders of Foreign Currency Notes whose Notes are to be held in the name of
a broker or nominee should contact such broker or nominee to determine whether
and how an election to receive payments in the Specified Currency may be made.
Unless otherwise specified in the applicable Pricing Supplement, a
beneficial owner of Book-Entry Notes denominated in a Specified Currency
electing to receive payments of principal or any premium or interest in a
currency other than U.S. dollars must notify the participant through which its
interest is held on or prior to the applicable Regular Record Date, in the case
of a payment of interest, and on or prior to the sixteenth day prior to
Maturity, in the case of principal or premium, of such beneficial owner's
election to receive all or a portion of such payment in a Specified Currency.
Such participant must notify the Depositary of such election on or prior to the
third Market Day after such Regular Record Date. The Depositary will notify the
Paying Agent of such election on or prior to the fifth Market Day after such
Regular Record Date. If complete instructions are received by the participant
and forwarded by the participant to the Depositary, and by the Depositary to the
Paying Agent, on or prior to such dates, the beneficial owner will receive
payments in the Specified Currency.
Except as described below, principal of and any premium and interest on
Foreign Currency Notes paid in U.S. dollars will be paid in the manner specified
in the accompanying Prospectus and this Prospectus Supplement for principal of
and any premium and interest on Notes denominated in U.S. dollars, and principal
of and any premium and interest on Foreign Currency Notes paid in a Specified
Currency will be paid by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register. All checks
payable in a Specified Currency will be drawn on a bank office located outside
the United States. In addition, payments in U.S. dollars of principal of and any
premium and interest on a Foreign Currency Note in which the equivalent of U.S.
$10,000,000 or more has been invested may, at the request of the Holder thereof,
be made in immediately available funds at the offices of Citibank, as Paying
Agent, in the Borough of Manhattan, The City of New York, provided that, in the
case of payments of principal and any premium, such Note is presented to the
Paying Agent in time for the Paying Agent to make such payments in such funds in
accordance with its normal procedures. Also, payments in a Specified Currency of
principal of and any premium and interest on a Foreign Currency Note in which
the equivalent of U.S. $10,000,000
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<PAGE>
or more has been invested may, at the request of the Holder thereof, be
made by wire transfer to an account with a bank located in the country of the
Specified Currency, as shall have been designated on or prior to the relevant
Regular Record Date or at least sixteen days prior to Maturity, as the case may
be, provided that, in the case of payments of principal and any premium, the
Note is presented at the offices of Citibank, as Paying Agent, in the Borough of
Manhattan, The City of New York in time for the Paying Agent to make such
payments in such funds in accordance with its normal procedures. Any request of
a Holder in accordance with this paragraph must be transmitted to the Paying
Agent on or prior to the relevant Regular Record Date or at least sixteen days
prior to Maturity, as the case may be. Such request may be in writing (mailed or
hand delivered) or by cable, telex or other form of facsimile transmission. Such
Holder may make such election for all principal and any premium and interest
payments and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Paying Agent but
written notice of any such revocation must be received by the Paying Agent on or
prior to the relevant Regular Record Date or at least sixteen days prior to
Maturity, as the case may be.
Payment Currency
If a Specified Currency is not available for the payment of principal or
any premium or interest with respect to a Foreign Currency Note due to the
imposition of exchange controls or other circumstances beyond the control of
Citicorp or is no longer used by the government of the country issuing such
Specified Currency or for the settlement of transactions by public institutions
of or within the international business community, Citicorp will be entitled to
satisfy its obligations to holders of Foreign Currency Notes by making such
payment in U.S. dollars on the basis of the Market Exchange Rate two Market Days
prior to the date of such payment, or if such Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate. See
"Foreign Currency Risks--Exchange Rates and Exchange Controls" below. The
"Market Exchange Rate" for any Specified Currency means the noon buying rate in
The City of New York for cable transfers for such Specified Currency as
certified for customs purposes by the Federal Reserve Bank of New York.
FOREIGN CURRENCY RISKS
General
PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN FOREIGN CURRENCY NOTES OR
INDEXED NOTES INDEXED TO A FOREIGN CURRENCY OR CURRENCY UNIT. FOREIGN CURRENCY
NOTES OR INDEXED NOTES INDEXED TO A FOREIGN CURRENCY OR CURRENCY UNIT ARE NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
Unless otherwise indicated in an applicable Pricing Supplement, a
Foreign Currency Note will not be sold in, or to a resident of, the country of
the Specified Currency in which such Note is denominated. The information set
forth below is directed to prospective purchasers of Foreign Currency Notes or
Indexed Notes indexed to a foreign currency or currency unit who are United
States residents and prospective purchasers should consult their own financial
and legal advisors with respect to any matters that may affect the purchase or
holding of Foreign Currency Notes or Indexed Notes indexed to a foreign currency
or currency unit or the receipt of payments of principal of and any premium and
interest on Foreign Currency Notes or such Indexed Notes.
Exchange Rates and Exchange Controls
An investment in Foreign Currency Notes or Indexed Notes indexed to a
foreign currency or currency unit entails significant risks that are not
associated with a similar investment in a security denominated in U.S. dollars.
Such risks include, without limitation, the possibility of significant changes
in rates of exchange between the U.S. dollar and the Specified Currency and the
possibility of the imposition or modification of foreign exchange controls by
either the United States or foreign governments. Such risks generally depend on
economic and political events and the supply of and demand for the relevant
currencies over which Citicorp has no control. In recent years, rates of
exchange between the U.S. dollar and certain foreign currencies have been highly
volatile and such volatility may be expected in the future. Fluctuations in any
particular exchange rate that have occurred in the past are not necessarily
indicative, however, of fluctuations in the rate that may occur during the term
of any Foreign Currency Note. Depreciation of the Specified Currency applicable
to a Foreign Currency Note against the U.S. dollar would result in a
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decrease in the U.S. dollar-equivalent yield of such Note, in the U.S.
dollar-equivalent value of the principal repayable at Maturity of such Note and,
generally, in the U.S. dollar-equivalent market value of such Note.
Governments have imposed from time to time exchange controls and may in the
future impose or revise exchange controls at or prior to a Foreign Currency
Note's Maturity. Even if there are no exchange controls, it is possible that the
Specified Currency for any particular Foreign Currency Note would not be
available at such Note's Maturity due to other circumstances beyond the control
of Citicorp. See "Special Provisions Relating to Foreign Currency Notes--Payment
Currency" above.
Judgments
In the event an action based on Foreign Currency Notes were commenced in a
court of the United States, it is likely that such court would grant judgment
relating to such Notes only in U.S. dollars. It is not clear, however, whether,
in granting such judgment, the rate of conversion into U.S. dollars would be
determined with reference to the date of default, the date judgment is rendered
or some other date. The Notes will be governed by, and construed in accordance
with, the laws of the State of New York. Under Section 27 of the New York
Judiciary Law, a state court sitting in the State of New York would be required
to render a judgment on the Foreign Currency Notes in the applicable Specified
Currency. Such judgment would be converted into U.S. dollars at the exchange
rate prevailing on the date of entry of the judgment.
PLAN OF DISTRIBUTION OF NOTES
Unless otherwise specified in the applicable Pricing Supplement, the Agents
shall be Bear, Stearns & Co. Inc, Citicorp Securities, Inc., CS First Boston
Corporation, Donaldson, Lufkin & Jenrette Securities Corporation, Goldman, Sachs
& Co., Lehman Brothers, Lehman Brothers Inc. (including its affiliate Lehman
Government, Securities Inc.), Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Morgan Stanley & Co. Incorporated, PaineWebber
Incorporated, Salomon Brothers Inc, Smith Barney Inc. and UBS Securities Inc.
Under the terms of an amended and restated selling agent agreement dated as of
January 26, 1995 between Citicorp and the Agents named above (the "Selling
Agent Agreement"), the Notes may be offered on a continuing basis by Citicorp
through the Agents, each of which has agreed to use reasonable best efforts to
solicit purchases of the Notes. Citicorp will pay each Agent a commission (or
grant a discount) ranging from .125% to 1.00% of the principal amount of each
Note, depending on its Stated Maturity, sold through such Agent. Citicorp has
reserved the right to sell Notes directly to investors on its own behalf and to
enter into agreements similar to the Selling Agent Agreement with other parties.
No commission will be payable nor will a discount be allowed on any sales made
directly by Citicorp. Citicorp will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. Each Agent
shall have the right, in its discretion reasonably exercised, without notice to
Citicorp, to reject any offer to purchase Notes received by it, in whole or in
part. Citicorp also may sell Notes to any Agent, acting as principal, at a
discount to be agreed upon at the time of sale, for resale to one or more
investors or other purchasers at varying prices related to prevailing market
prices at the time of such resale, as determined by such Agent or, if so agreed,
at a fixed public offering price. The Agents may sell to or through dealers who
may resell to investors. The Agents may pay all or part of their discount or
commission to such dealers. The offering price and other selling terms for such
resales may from time to time be varied by such Agent.
This Prospectus Supplement and Prospectus may be used by CSI, a wholly
owned subsidiary of Citicorp, in connection with offers and sales related to
secondary market transactions in the Notes. CSI may act as principal or agent in
such transactions. Such sales will be made at prices related to prevailing
market prices at the time of sale.
The offer and sale of the Notes will comply with the requirements of
Schedule E of the By-Laws of the National Association of Securities Dealers,
Inc. (the "NASD") regarding underwriting securities of an affiliate. No NASD
member participating in offers and sales of the Notes will execute a transaction
in the Notes in a discretionary account without the prior written specific
approval of the member's customer.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes, other than Foreign Currency Notes, will be required
to be made in funds immediately available in The City of New York. With respect
to payment of the purchase price of Foreign Currency Notes, see "Special
Provisions Relating to Foreign Currency Notes--General" above.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"), and any discounts or commissions
received by them from Citicorp and any profit realized by them on the
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<PAGE>
sale or resale of the Notes may be deemed to be underwriting discounts and
commissions under the Act. Citicorp has agreed to indemnify the Agents against
and contribute toward certain liabilities, including liabilities under the Act.
Citicorp has agreed to reimburse the Agents for certain expenses.
In addition to offering Notes through the Agents as described herein, other
medium-term notes (but constituting one or more separate series of notes for
purposes of the applicable Indenture) may in the future be offered concurrently
with the offering of the Notes, on a continuing basis in and outside the United
States by Citicorp, including, without limitation, medium-term notes that
have terms substantially similar to the terms of the Notes offered by Citicorp
on a continuing basis outside the United States pursuant to an amended and
restated selling agent agreement dated as of January 26, 1995 between Citicorp
and Bear, Stearns International Limited, Citibank International plc, Goldman
Sachs International, Merrill Lynch International Limited, Morgan Stanley & Co.
International Limited, PaineWebber International (U.K.) Ltd., Salomon Brothers
International Limited and Smith Barney Inc., as overseas agents for Citicorp,
(the "Euro Selling Agent Agreement"), and directly to investors on its own
behalf. The terms of the Euro Selling Agent Agreement are substantially similar
to the terms of the Selling Agent Agreement, except that the Euro Selling Agent
Agreement contains certain selling restrictions. Any notes sold pursuant to a
Euro Selling Agent Agreement, sold by Citicorp to any of such Euro agents for
resale as contemplated by the Euro Selling Agent Agreement, or sold by Citicorp
directly to investors will, in the case of the sale of senior notes, reduce the
aggregate amount of Senior Notes which may be offered by this Prospectus
Supplement and the Prospectus, and, in the case of the sale of subordinated
notes, reduce the aggregate amount of Subordinated Notes which may be offered by
this Prospectus Supplement and the Prospectus.
The Agents each engage in transactions with and perform services for
Citicorp in the ordinary course of business.
VALIDITY OF THE NOTES
The validity of the Notes offered hereby will be passed upon for Citicorp
by Stephen E. Dietz, as an Associate General Counsel of Citibank, N.A., and for
the Agents by Sullivan & Cromwell, 125 Broad Street, New York, New York 10004.
The opinions of Mr. Dietz and Sullivan & Cromwell will be conditioned upon, and
subject to certain assumptions regarding, future action required to be taken by
Citicorp and the applicable Trustee in connection with the issuance and sale of
any particular Note, the specific terms of Notes and other matters which may
affect the validity of Notes but which cannot be ascertained on the date of such
opinions. Mr. Dietz owns or has the right to acquire a number of shares of
common stock of Citicorp equal to less than 0.01% of the outstanding common
stock of Citicorp.
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PROSPECTUS
[LOGO]
Senior Notes
Subordinated Notes
--------------
Citicorp from time to time may offer in one or more series its unsecured
debt securities, which may be either senior (the "Senior Notes") or subordinated
(the "Subordinated Notes", which with the Senior Notes are herein referred to as
the "Notes" and each, a "Note"). As used herein, Notes shall include Notes
denominated in U.S. dollars or, at the option of Citicorp and so specified in
the applicable Prospectus Supplement (as defined below), in any other currency
or composite currency, including the European Currency Unit. The Notes may be
offered, separately or together, in separate series in amounts, at prices and on
terms determined at the time of sale and set forth in the accompanying
supplement to this Prospectus (a "Prospectus Supplement"). Pursuant to the terms
of the Registration Statement of which this Prospectus forms a part, Citicorp
may also issue series of its preferred stock, shares of its common stock, par
value $1.00 per share, warrants to purchase separately either of the foregoing,
convertible notes, note warrants, currency warrants and capital securities under
such Registration Statement.
The Senior Notes will rank equally with all other unsecured and
unsubordinated indebtedness of Citicorp. The Subordinated Notes will be
subordinate to all existing and future unsecured and unsubordinated Senior
Indebtedness (as defined herein). See "Description of Notes."
The specific terms of each series of Notes offered pursuant to this
Prospectus will be set forth in the applicable Prospectus Supplement, which in
each case will identify the underwriter or underwriters or agent or agents for
the Notes being offered thereby and their compensation, the public offering or
purchase price and any specific terms in connection with the offer and sale of
such series of Notes.
With respect to each series of Notes, the related Prospectus Supplement
will set forth the aggregate principal amount offered, the rate and time of
payment of interest, if any, the authorized denominations, the maturity,
priority, premium, if any, any terms for redemption at the option of Citicorp or
the holder, the form of such series of Notes (which may be registered, bearer or
permanent global form), the initial public offering price and any mandatory or
optional sinking fund or analogous provisions.
The applicable Prospectus Supplement will also contain information, where
applicable, concerning certain United States federal income tax considerations
relating to, and as to any listing on a securities exchange of, the Notes
covered by such Prospectus Supplement.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
THE NOTES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE
UNSECURED DEBT OBLIGATIONS OF CITICORP AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
The Notes may be offered by Citicorp directly to purchasers, through agents
designated from time to time, through underwriting syndicates led by one or more
managing underwriters or through one or more underwriters acting alone. If
Citicorp, directly or through agents, solicits offers to purchase Notes,
Citicorp reserves the sole right to accept and, together with its agents, to
reject in whole or in part any proposed purchase of Notes. Affiliates of
Citicorp may from time to time act as agents or underwriters in connection with
the sale of Notes to the extent permitted by applicable law.
(Continued on next page)
--------------
The date of this Prospectus is January 26, 1995
<PAGE>
If any agent of Citicorp, or any underwriter, is involved in the sale of
Notes offered hereby, the name of such agent or underwriter and any applicable
commissions or discounts will be set forth in, or will be calculable from, the
applicable Prospectus Supplement, and the net proceeds to Citicorp from such
sale will be the purchase price of such offered Notes less such commissions or
discounts and other attributable issuance and distribution expenses. Citicorp
may also issue Notes to one or more persons in exchange for outstanding debt
securities of Citicorp acquired by such persons from third parties in open
market transactions or in privately negotiated transactions. The newly issued
Notes in such cases may be offered pursuant to this Prospectus and the
applicable Prospectus Supplement by such persons, acting as principal for their
own accounts, at market prices prevailing at the time of sale, at prices
otherwise negotiated or at fixed prices. Unless otherwise indicated in the
applicable Prospectus Supplement, Citicorp will receive only outstanding debt
securities and will not receive cash proceeds in connection with such exchanges
and resales. See "Plan of Distribution" for possible indemnification
arrangements for agents, underwriters and their controlling persons.
This Prospectus and applicable Prospectus Supplement may be used by direct
or indirect wholly owned subsidiaries of Citicorp in connection with offers and
sales related to secondary market transactions in the Notes. Such subsidiaries
may act as principal or agent in such transactions. Such sales will be made at
prices related to prevailing market prices at the time of sale.
This Prospectus may not be used to consummate sales of Notes unless
accompanied by a Prospectus Supplement. The delivery of this Prospectus together
with a Prospectus Supplement relating to particular Notes in any jurisdiction
shall not constitute an offer in that jurisdiction of any of the other Notes
covered by this Prospectus.
FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
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<PAGE>
AVAILABLE INFORMATION
Citicorp is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Information, as of particular dates, concerning
directors and officers, their remuneration, options granted to them, the
principal holders of securities of Citicorp and any material interest of such
persons in transactions with Citicorp is disclosed in proxy statements
distributed to stockholders of Citicorp and filed with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and Seven World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such reports, proxy statements and other information
concerning Citicorp also may be inspected at the offices of the New York Stock
Exchange, the American Stock Exchange, the Midwest Stock Exchange and the
Pacific Stock Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Citicorp are
incorporated as of their respective filing dates in this Prospectus by
reference:
(1) Annual Report and Form 10-K for the fiscal year ended December 31, 1993,
filed pursuant to Section 13 of the Exchange Act;
(2) Financial Reviews and Forms 10-Q for the quarters ended March 31, 1994,
June 30, 1994 and September 30, 1994, filed pursuant to Section 13 of
the Exchange Act; and
(3) Current Reports on Form 8-K dated January 18, 1994, April 19, 1994, July
19, 1994, October 18, 1994 and January 17, 1995, filed pursuant to
Section 13 of the Exchange Act.
All reports subsequently filed by Citicorp pursuant to Sections 13(a) and
(c) of the Exchange Act and any definitive proxy or information statements filed
pursuant to Section 14 of the Exchange Act in connection with any subsequent
stockholders' meeting and any reports filed pursuant to Section 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination of
the offering of the Notes offered hereby shall be incorporated by reference into
this Prospectus and be a part hereof. Any statement contained herein or in a
document incorporated by reference herein shall be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which also is incorporated by reference
herein or in the accompanying Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not, except as so
modified or superseded, constitute a part of this Prospectus.
Citicorp will provide without charge to each person to whom this Prospectus
is delivered, on the request of any such person, a copy of any and all of the
foregoing documents incorporated herein by reference (other than exhibits to
such documents). Written or telephone requests should be directed to Citicorp,
399 Park Avenue, New York, New York 10043, Attention: Investor Relations
Department, (212) 559-2718.
CITICORP
Citicorp, whose principal subsidiary is Citibank, N.A. ("Citibank"), is a
holding company incorporated under the laws of the State of Delaware on December
4, 1967. The principal office of Citicorp is located at 399 Park Avenue, New
York, New York 10043; its telephone number is (212) 559-1000. Through its
subsidiaries and affiliates, including Citibank, Citicorp is a global financial
services organization serving the financial needs of individuals, businesses,
governments and financial institutions in the United States and throughout the
world.
Holding Company
Citicorp is a legal entity separate and distinct from Citibank and its
other subsidiaries and affiliates. The proceeds of Citicorp debt and equity
issuances are provided to its subsidiaries both as equity investments and
advances or are held primarily in liquid investments. Citicorp derives revenues
through interest payments and dividends on its subsidiary advances and
investments and from earnings on its liquid asset portfolio. These revenues are
used to defray Citicorp's operating expenses, service its debt and pay dividends
to holders of its preferred and common shares.
3
<PAGE>
There are various legal limitations on the extent to which Citicorp's bank
subsidiaries may extend credit, pay dividends or otherwise supply funds to
Citicorp. The approval of the Office of the Comptroller of the Currency is
required if total dividends declared by a national bank in any calendar year
exceed net profits (as defined) for that year combined with its retained net
profits for the preceding two years. In addition, dividends for such a bank may
not be paid in excess of the bank's undivided profits. State-chartered bank
subsidiaries are subject to dividend limitations imposed by applicable state
law. Citicorp's national and state-chartered bank subsidiaries can declare
dividends to their respective parent companies in 1994, without regulatory
approval, of approximately $3.9 billion (determined as of September 30, 1994),
adjusted by the effect of their net income (or net loss) for 1994 from September
30, 1994 up to the date of any such dividend declaration. In determining whether
and to what extent to pay dividends, each bank subsidiary must also consider the
effect of dividend payments on applicable risk-based capital and leverage ratio
requirements as well as policy statements of the federal regulatory agencies
that indicate that banking organizations should generally pay dividends out of
current operating earnings. Consistent with these considerations, Citicorp
estimates that its bank subsidiaries can declare approximately $2.0 billion of
the available $3.9 billion (determined as of September 30, 1994), adjusted by
the effect of their net income (or net loss) from September 30, 1994 up to the
date of any such dividend declaration.
Citicorp also derives dividends from its non-bank subsidiaries, including
the holding company that owns many of Citicorp's domestic banks. These
subsidiaries are not subject to regulatory restrictions on their payment of
dividends to Citicorp, except that the approval of the Office of Thrift
Supervision may be required if total dividends declared by a savings association
in any calendar year exceed amounts specified in that agency's regulations. In
addition, there are numerous governmental requirements and regulations that
affect the activities of Citicorp and its bank and non-bank subsidiaries.
Under longstanding policy of The Board of Governors of the Federal Reserve
System, a bank holding company is expected to act as a source of financial
strength for its subsidiary banks and to commit resources to support such banks.
As a result of such policy, Citicorp may be required to commit resources to its
subsidiary banks in circumstances where it might not do so absent such policy.
Because Citicorp is a holding company, its rights and the rights of its
creditors, including the holders of the Notes offered hereby, to participate in
the assets of any subsidiary upon the latter's liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors, except to the
extent that Citicorp may itself be a creditor with recognized claims against the
subsidiary.
USE OF PROCEEDS
Citicorp intends to apply the net proceeds from the sale of the Notes to
its general funds to be used by its management for corporate purposes,
principally to fund investments in, or extensions of credit to, banking and
non-banking subsidiaries. Except as otherwise described in a Prospectus
Supplement, specific allocations of the proceeds to such purposes will not have
been made at the date of the applicable Prospectus Supplement, although the
management of Citicorp will have determined that funds should be borrowed at
that time in anticipation of future funding requirements of the subsidiaries.
The precise amount and timing of such investments in and extensions of credit to
the subsidiaries will depend upon their funding requirements and the
availability of other funds to Citicorp and its subsidiaries.
If Notes are issued to one or more persons in exchange for outstanding debt
securities and resold by such persons, the accompanying Prospectus Supplement
will set forth the aggregate principal amount of securities which Citicorp will
receive in exchange therefor and which will thereupon cease to be outstanding,
the residual cash payment, if any, which Citicorp may receive from such person
or such person may receive from Citicorp, as the case may be, the date from
which Citicorp will pay to such person interest accrued on the debt securities
to the closing date and an estimate of Citicorp's expenses in respect of the
offering of the Notes.
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RATIOS OF INCOME TO FIXED CHARGES
For the fiscal years ended December 31, 1994, 1993, 1992, 1991 and 1990,
Citicorp's consolidated ratios of income to fixed charges, computed as set forth
below, were as follows:
Year ended December 31,
-------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
Income to Fixed Charges:
Excluding Interest on Deposits .... 1.76 1.44 1.24 0.9 61.09
Including Interest on Deposits .... 1.31 1.18 1.09 0.99 1.03
Income for the year ended December 31, 1991 was inadequate to cover fixed
charges by $237 million. For purposes of computing the consolidated ratio of
income to fixed charges, income represents net income (loss) (before
extraordinary item and cumulative effects of accounting changes) plus income
taxes and fixed charges. Fixed charges, excluding interest on deposits,
represent interest expense (except interest paid on deposits) and the interest
factor included in rents. Fixed charges, including interest on deposits,
represent all interest expense and the interest factor included in rents.
DESCRIPTION OF NOTES
The Senior Notes offered hereby are to be issued under an indenture dated
as of September 1, 1989, between Citicorp and United States Trust Company of New
York, as trustee (the "Senior Trustee"), as supplemented by a first supplemental
indenture dated as of September 25, 1990 between Citicorp and the Senior Trustee
(such indenture, together with the first supplemental indenture thereto, is
referred to herein as the "Senior Indenture").
The Subordinated Notes offered hereby are to be issued under an indenture
dated as of April 1, 1991 (the "Original Subordinated Indenture"), between
Citicorp and Chemical Bank, as trustee (the "Subordinated Trustee" and, together
with the Senior Trustee, the "Trustees"), as supplemented by a first
supplemental indenture dated as of November 27, 1992 (the "First Supplemental
Indenture") between Citicorp and the Subordinated Trustee (the Original
Subordinated Indenture together with the First Supplemental Indenture is
referred to herein as the "Subordinated Indenture"). The First Supplemental
Indenture was entered into in response to an interpretation of the staff of the
Board of Governors of the Federal Reserve System concerning the capital
treatment of subordinated debt and amended the Original Subordinated Indenture
by removing a restrictive covenant relating to liens on the stock of Citibank
and by narrowing the definition of "Event of Default" to provide that the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
similar official) for Citicorp or substantially all of its property (rather than
a substantial part of its property) is an Event of Default. These amendments do
not apply to any series of Subordinated Notes issued prior to the execution of
the First Supplemental Indenture (the "Original Subordinated Notes") and,
therefore, holders of Original Subordinated Notes could be entitled to demand
immediate payment of their securities upon the occurrence of certain events of
bankruptcy or insolvency which would not entitle the holders of Subordinated
Notes offered hereby or issued since the execution of the First Supplemental
Indenture to demand such payment.
A copy of each of the Senior Indenture and the Subordinated Indenture (each
an "Indenture" and together the "Indentures") is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the Indentures do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the applicable Indenture, including the definition therein
of certain terms.
Each Indenture provides that Notes, in addition to the Notes previously
issued under such Indenture, may be issued in separate series thereunder without
limitation as to aggregate principal amount, as authorized from time to time by,
or pursuant to resolutions of, Citicorp's Board of Directors. (Indentures
ss.301).
The Notes may be issued from time to time in one or more series. The
particular terms of each series of Notes offered by a Prospectus Supplement will
be described in such Prospectus Supplement relating to such series.
The Senior Notes of each series will be unsecured and will rank pari passu
with all other unsecured and unsubordinated indebtedness of Citicorp. The
Subordinated Notes of each series will be unsecured and will rank pari passu
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with all other unsecured and subordinated indebtedness of Citicorp other than
subordinated indebtedness as to which, in the instrument creating or evidencing
the same, or pursuant to which the same is outstanding, it is provided that such
indebtedness is junior to the Subordinated Notes.
Citicorp may offer under this Prospectus series of Notes under indentures
or documentation containing provisions which may differ from those included in
the Indentures or any indenture or documentation applicable to other outstanding
series of Citicorp indebtedness, provided that the material provisions of the
indenture or documentation under which such series of Notes is issued are
described in the Prospectus Supplement relating to such series of Notes.
General
The applicable Prospectus Supplement will describe the following terms of
the Notes of each series: (1) the title of the Notes and whether they are
Subordinated Notes or Senior Notes; (2) any limit on the aggregate principal
amount of the Notes; (3) whether the Notes are to be issuable as Registered
Notes or Bearer Notes (each as defined below) or both, whether any of the Notes
are to be issuable initially in temporary global form and whether any of the
Notes are to be issuable in permanent global form; (4) the price or prices
(expressed as a percentage of the aggregate principal amount thereof) at which
the Notes will be issued; (5) the date or dates on which the Notes will mature;
(6) the rate or rates per annum at which the Notes will bear interest, if any,
or the formula pursuant to which such rate or rates will be determined, and the
date or dates from which any such interest will accrue; (7) the Interest Payment
Dates on which any such interest on the Notes will be payable and the Regular
Record Date for any interest payable on any Registered Notes on any Interest
Payment Date; (8) the person to whom any interest on any Registered Note of such
series will be payable, if other than the person in whose name that Note (or one
or more Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest, the manner in which, or the Person to whom, any
interest on any Bearer Note of such series will be payable, if otherwise than
upon presentation and surrender of coupons appertaining thereto, and the extent
to which, or the manner in which, any interest payable on a temporary global
Note on an Interest Payment Date will be paid if other than in the manner
described under "Temporary Global Notes" below and the extent to which, or the
manner in which, any interest payable on a permanent global Note on an Interest
Payment Date will be paid; (9) each office or agency where, subject to the terms
of the applicable Indenture as described below under "Payment and Paying
Agents", the principal of and any premium and interest on the Notes will be
payable and each office or agency where, subject to the terms of the applicable
Indenture as described below under "Form, Exchange, Registration and Transfer",
the Notes may be presented for registration of transfer or exchange; (10) the
period or periods within which and the price or prices at which the Notes may,
pursuant to any optional redemption provisions, be redeemed, in whole or in
part, and the other detailed terms and provisions of any such optional
redemption provisions; (11) the obligation, if any, of Citicorp to redeem or
purchase the Notes pursuant to any sinking fund or analogous provisions or at
the option of the holder thereof and the period or periods within which and the
price or prices at which the Notes will be redeemed or purchased, in whole or in
part, pursuant to such obligation, and the other detailed terms and provisions
of such obligation; (12) the denominations in which any Registered Notes will be
issuable, if other than denominations of $1,000 and any integral multiple
thereof, and the denomination or denominations in which Bearer Notes will be
issuable, if other than denominations of $5,000; (13) the currency or currency
units of payment of principal of and any premium and interest on the Notes, if
other than U.S. dollars; (14) any index or formula used to determine the amount
of payments of principal of and any premium on the Notes; (15) if applicable,
the fact that the terms of the applicable Indenture described below under
"Defeasance and Covenant Defeasance" will not apply to such series; (16) the
application, if any, of the terms of the applicable Indenture described below
under "Assumption of Obligations" to any series of Notes issuable as Bearer
Notes; (17) any additional restrictive covenants included for the benefit of the
holders of such Notes; (18) any additional Events of Default provided with
respect to such Notes; (19) information with respect to book-entry procedures,
if any; and (20) any other terms of the Notes not inconsistent with the
provisions of the applicable Indenture. (Indentures ss.301). Any such Prospectus
Supplement will also describe any special provisions for the payment of
additional amounts with respect to the Notes of such series. If Citicorp has an
obligation to redeem or purchase the Notes at the option of the holder thereof
as provided in the applicable Prospectus Supplement pursuant to clause (11)
above, Citicorp will comply with any applicable provisions of Section 14(e) of
the Exchange Act and the related rules and regulations in connection with such
redemption or purchase.
Notes of any series may be issued as Original Issue Discount Notes. An
Original Issue Discount Note is a Note, including any zero-coupon Note, which is
issued at a price lower than the amount payable upon the Stated Maturity thereof
and which provides that upon redemption or acceleration of the Maturity thereof
an amount less than the
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amount payable upon the Stated Maturity thereof and determined in accordance
with the terms of such Note shall become due and payable. United States Holders
of Original Issue Discount Notes having a maturity of more than one year from
their date of issue will have to include original issue discount in income as it
accrues, generally before receipt of cash attributable to such income.
Additional special United States federal income tax considerations applicable to
Notes issued at an original issue discount, including Original Issue Discount
Notes, and certain special United States tax considerations applicable to any
Notes which are denominated in a currency or currency unit other than United
States dollars, are described below under "United States Taxation".
Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the applicable Indenture would not necessarily afford
holders of either the Senior Notes or the Subordinated Notes protection in the
event of a sudden and dramatic decline in credit quality resulting from
takeovers, recapitalizations or similar restructurings.
Form, Exchange, Registration and Transfer
Notes of a series may be issued in registered form ("Registered Notes"), or
bearer form with coupons ("Bearer Notes") or any combination thereof. Each
Indenture also provides that Notes of a series may be issued in temporary or
permanent global form. Unless otherwise indicated in an applicable Prospectus
Supplement, Bearer Notes (other than Bearer Notes in temporary or global form)
will have interest coupons attached. (Indentures ss.201). See "Temporary Global
Notes" and "Permanent Global Notes".
In connection with its sale during the restricted period (as defined below
under "Limitations on Issuance of Euro-Notes"), no Euro Security issued under
either Indenture (together, "Euro-Notes") shall be delivered to any location in
the United States or its possessions and a Euro-Note (not including a Note in
temporary global form) may be delivered in definitive form only if, prior to
such delivery, the owner of such Euro-Note or the financial institution or
clearing organization through which the owner holds such Euro-Note, directly or
indirectly, provides a written certificate to Citicorp, in the form required by
the applicable Indenture, to the effect that (a) such Euro-Note is owned by a
person (other than a financial institution for purposes of resale during the
restricted period) who is not a United States person; (b) such Euro-Note is
owned by a United States person (other than a financial institution for purposes
of resale during the restricted period) who is (i) a foreign branch of a United
States financial institution or (ii) a United States person who acquired such
Euro-Note through the foreign branch of a United States financial institution
and who for purposes of this certification holds such Euro-Note through such
financial institution on the date of certification and, in either case, such
United States financial institution provides a certificate to Citicorp or the
distributor selling the Euro-Note stating that it agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as from time to time amended (the "Internal Revenue Code"), and the
regulations thereunder; or (c) such Euro-Note is owned by a financial
institution for purposes of resale during the restricted period and such
financial institution certifies that it has not acquired such Euro-Note for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions. Upon exchange of a portion
of a temporary global Note for an interest in a Euro-Note in permanent global
form, such certification must be given in connection with the exchange. In the
case of a Euro-Note in permanent global form, such certification must be given
in connection with the notation of a beneficial ownership interest therein upon
exchange of a portion of a temporary global Euro-Note. (Indentures ss.ss.303,
304). See "Temporary Global Notes" and "Limitations on Issuance of Euro-Notes".
At the option of the holder, subject to the terms of the applicable
Indenture, Registered Notes of any series will be exchangeable for other
Registered Notes of the same series of any authorized denominations and of a
like aggregate principal amount and tenor. In addition, if Notes of any series
are issuable as both Registered Notes and Bearer Notes, at the option of the
holder, subject to the terms of such Indenture, Bearer Notes (with all unmatured
coupons, except as provided below, and with all matured coupons in default) of
such series will be exchangeable for Registered Notes of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Bearer Notes surrendered in exchange for Registered Notes between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest shall be surrendered without the coupon relating to such date for
payment of interest and interest will not be payable in respect of the
Registered Note issued in exchange for such Bearer Note, but will be payable
only to the holder of such coupon when due in accordance with the terms of the
applicable Indenture. Registered Notes, including Registered Notes received in
exchange for Bearer Notes, may not be exchanged for Bearer Notes. (Indentures
ss.305). Each Bearer Note and any coupons appertaining thereto will bear a
legend to the following
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effect: "Any United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the limitations
provided in Sections 165(j) and 1287(a) of the Internal Revenue Code".
(Indentures ss.201).
Notes may be presented for exchange as provided above, and Registered Notes
may be presented for registration of transfer (with the form of transfer
endorsed thereon duly executed), at the office of the Security Registrar or at
the office of any transfer agent designated by Citicorp for such purpose with
respect to any series of Notes and referred to in the applicable Prospectus
Supplement without a service charge and upon payment of any taxes and other
governmental charges as described in the applicable Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. Citicorp has appointed Citibank as Security
Registrar. (Indentures ss.305). If a Prospectus Supplement refers to any
transfer agents (in addition to the Security Registrar) initially designated by
Citicorp with respect to any series of Notes, Citicorp may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that if Notes of a series are
issuable solely as Registered Notes, Citicorp will be required to maintain a
transfer agent in each Place of Payment for such series and, if Notes of a
series are issuable as Bearer Notes, Citicorp will be required to maintain (in
addition to the Security Registrar) a transfer agent in a Place of Payment for
such series located outside the United States and its possessions. Citicorp may
at any time designate additional transfer agents with respect to any series of
Notes. (Indentures ss.1002).
In the event of any redemption in part, Citicorp shall not be required to
(i) issue, register the transfer of or exchange any Note during a period
beginning at the opening of business 15 days before any selection for redemption
of Notes of like tenor and of the series of which such Note is a part, and
ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all holders of Notes of
like tenor and of such series to be redeemed; (ii) register the transfer of or
exchange any Registered Note so selected for redemption, in whole or in part,
except the unredeemed portion of any Note being redeemed in part; or (iii)
exchange any Bearer Note so selected for redemption, except to exchange such
Bearer Note for a Registered Note of that series and like tenor which is
immediately surrendered for redemption. (Indentures ss.305).
Payment and Paying Agents
Unless otherwise indicated in the applicable Prospectus Supplement and
provided that the certificate described above under "Form, Exchange,
Registration and Transfer" has been received, principal of and any premium and
interest on Bearer Notes will be payable, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States and
its possessions as Citicorp may designate from time to time, at the option of
the holder, by check or by transfer to an account maintained by the payee with a
financial institution located outside the United States and its possessions.
Unless otherwise indicated in the applicable Prospectus Supplement, payment of
interest on a Bearer Note on any Interest Payment Date will be made only against
surrender to the Paying Agent of the coupon relating to such Interest Payment
Date. (Indentures ss.1001). No payment with respect to any Bearer Note will be
made at any office or agency of Citicorp in the United States or its possessions
or by check mailed to any address in the United States or its possessions or by
transfer to any account maintained with a financial institution located in the
United States or its possessions. Notwithstanding the foregoing, payments of
principal of and any premium and interest on Bearer Notes denominated and
payable in U.S. dollars will be made at the office of the Paying Agent in the
Borough of Manhattan, The City of New York, if (but only if) payment of the full
amount thereof in U.S. dollars at all offices or agencies outside the United
States and its possessions is illegal or effectively precluded by exchange
controls or other similar restrictions. (Indentures ss.1002).
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of and any premium and interest on Registered Notes will be payable,
subject to any applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as Citicorp may designate from time to time, except that
at the option of Citicorp payment of any interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register. (Indentures ss.201). Unless otherwise indicated in an
applicable Prospectus Supplement, payment of interest on a Registered Note on
any Interest Payment Date will be made to the Person in whose name such
Registered Note (or Predecessor Note) is registered at the close of business on
the Regular Record Date for such interest. (Indentures ss.307).
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporate Trust Office of Citibank in The City of New York will be designated as
a Paying Agent for Citicorp for payments with respect to Notes of each
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series which are issuable solely as Registered Notes and as a Paying Agent for
payments with respect to Notes of each series (subject to the limitations
described above in the case of Bearer Notes) which are issuable solely as Bearer
Notes or as both Registered Notes and Bearer Notes. Any Paying Agents outside
the United States and its possessions and any other Paying Agents in the United
States or its possessions initially designated by Citicorp for the Notes of each
series will be named in the applicable Prospectus Supplement. Citicorp may at
any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that if Notes of a series are issuable solely as Registered Notes,
Citicorp will be required to maintain a Paying Agent in each Place of Payment
for such series and, if Notes of a series are issuable as Bearer Notes, Citicorp
will be required to maintain (i) a Paying Agent in the Borough of Manhattan, The
City of New York for payments with respect to any Registered Notes of the series
(and for payments with respect to Bearer Notes of the series in the
circumstances described above, but not otherwise) and (ii) a Paying Agent in a
Place of Payment located outside the United States and its possessions where
Notes of such series and any coupons appertaining thereto may be presented and
surrendered for payment; provided, however, that if the Notes of such series are
listed on The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited (the "London Stock Exchange"), the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and its
possessions and such stock exchange shall so require, Citicorp will maintain a
Paying Agent in London, Luxembourg or any other required city located outside
the United States and its possessions, as the case may be, for the Notes of such
series. (Indentures ss.1002).
After notice by publication, all moneys paid by Citicorp to a Paying Agent
for the payment of the principal of and any premium or interest on any Note of
any series which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to Citicorp
and the holder of such Note or any coupon appertaining thereto will thereafter
look only to Citicorp for payment thereof. (Indentures ss.1003).
Temporary Global Notes
All Euro-Notes will initially be represented by one or more temporary
global Notes, without interest coupons, to be deposited with a common depositary
in London for Morgan Guaranty Trust Company of New York, Brussels office, in its
capacity as operator of the Euroclear System ("Euroclear") and Cedel, societe
anonyme ("Cedel")for credit to the designated accounts. On and after the date
determined as provided in any such temporary global Note and described in an
applicable Prospectus Supplement (the "Exchange Date"), each such temporary
global Note will be exchanged for definitive Bearer Notes, definitive Registered
Notes or all or a portion of a permanent global Note, or any combination
thereof, as specified in an applicable Prospectus Supplement, but, unless
otherwise specified in an applicable Prospectus Supplement, only upon receipt by
Euroclear or Cedel of written certification in the form and to the effect
described above under "Form, Exchange, Registration and Transfer". No Note
delivered in exchange for any portion of a temporary global Note shall be
delivered to any location in the United States or its possessions in connection
with such exchange. (Indentures ss.304) .
Unless otherwise specified in an applicable Prospectus Supplement, interest
in respect of any portion of a temporary global Note payable in respect of an
Interest Payment Date occurring prior to the issuance of definitive Notes
(including a permanent global Note) will be payable to the bearer and thus,
while such temporary global Note is deposited with the common depositary for
Euroclear and Cedel, will be paid to each of Euroclear and Cedel with respect to
the portion of the temporary global Note held for its account for which it
provides certification in the form described above under "Form, Exchange,
Registration and Transfer". If an Interest Payment Date occurs prior to the
issuance of definitive Notes (including a permanent global Note), written
certification in the form and to the effect described above under "Form,
Exchange, Registration and Transfer" will be required to obtain an interest
payment, and upon receipt of such certification Euroclear or Cedel, as the case
may be, will exchange the portion of the temporary global Note relating to such
certification for an interest in a permanent global Note (unless the account
holder requests that such portion be exchanged for a definitive Registered Note
or Notes or a definitive Bearer Note or Notes). (Indentures ss.304).
Permanent Global Notes
If any Notes of a series are issuable in permanent global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such permanent global Note may
exchange such interests for Notes of such series and of like tenor and principal
amount in any authorized form and denomination. No Bearer Note delivered in
exchange for any portion of a permanent global Note shall be delivered to
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any location in the United States or its possessions in connection with such
exchange. (Indentures ss.305). Principal of and any premium and interest on any
permanent global Note will be payable in the manner described in the applicable
Prospectus Supplement. (Indentures ss.304).
Limitations on Liens on Stock of Citibank
Citicorp has covenanted in the Senior Indenture that, so long as any of the
Senior Notes issued thereunder which mature more than ten years after their
issuance are Outstanding, it will not create, incur, assume or suffer to exist
any mortgage, pledge, security interest or other encumbrance, as security for
indebtedness for borrowed money, upon any shares of Voting Stock of Citibank
owned by Citicorp, without effectively providing that the Senior Notes issued
under such Indenture which mature more than ten years after their issuance shall
be secured equally and ratably with, or prior to, such indebtedness; provided,
however, that Citicorp shall be permitted to create, incur, assume or suffer to
exist any such mortgage, pledge, security interest or other encumbrance without
regard to the foregoing provisions so long as after giving effect thereto
Citicorp will own at least 80% of the Voting Stock of Citibank then issued and
outstanding, free and clear of any such mortgage, pledge, security interest or
other encumbrance. For the purpose of this covenant, the term "Voting Stock" of
Citibank shall mean stock of any class or classes, however designated, having
ordinary voting power for the election of a majority of the board of directors
of Citibank, other than stock having such power only by reason of the happening
of a contingency. (Senior Indenture ss.1005). The foregoing covenant also
applies to the Original Subordinated Notes but is not a provision of the
Subordinated Indenture and does not apply to any series of Subordinated Notes.
Defaults; Events of Default
Unless otherwise provided in the applicable Prospectus Supplement, the
following will be "Events of Default" under the Senior Indenture with respect to
any series of Senior Notes: (a) failure to pay principal of or any premium on
any Senior Note of that series at maturity; (b) failure to pay any interest on
any Senior Note of that series when due, continued for 30 days; (c) failure to
deposit any sinking fund payment, when due, in respect of any Senior Note of
that series; (d) failure to perform any other covenant of Citicorp in the Senior
Indenture (other than a covenant included in the Senior Indenture solely for the
benefit of series of Senior Notes other than that series) continued for 60 days
after written notice of such default; (e) certain events of bankruptcy,
insolvency or reorganization of Citicorp or Citibank; and (f) any other Event of
Default provided with respect to Senior Notes of that series. (Senior Indenture
ss.501).
Unless otherwise provided in the applicable Prospectus Supplement, the
following will be "Defaults" under the Subordinated Indenture with respect to
any series of Subordinated Notes: (a) failure to pay principal of or any premium
on any of the Subordinated Notes of that series at maturity; (b) failure to pay
any interest on any Subordinated Note of that series when due, continued for 30
days; (c) failure to perform any other covenant of Citicorp in the Subordinated
Indenture (other than a covenant included in the Subordinated Indenture solely
for the benefit of series of Subordinated Notes other than that series)
continued for 60 days after written notice of such default; (d) any Event of
Default; and (e) any other Default provided with respect to Subordinated Notes
of that series. (Subordinated Indenture ss.503). Unless otherwise provided in
the applicable Prospectus Supplement, the following will be the Events of
Default under the Subordinated Indenture with respect to any series of
Subordinated Notes: (x) certain events of bankruptcy, insolvency or
reorganization of Citicorp; and (y) any other Event of Default provided with
respect to Subordinated Notes of that series. (Subordinated Indenture ss.501).
Unless an Event of Default has occurred and shall be continuing with respect to
a series of Subordinated Notes, neither the holders of such Subordinated Notes
nor the Subordinated Trustee may declare the acceleration of the payment of
principal or premium, if any, of such Subordinated Notes under the Subordinated
Indenture.
Subject to the provisions of the applicable Indenture relating to the
duties of the related Trustee, in case an Event of Default with respect to
either the Senior Notes or the Subordinated Notes shall occur, or in case a
Default with respect to the Subordinated Notes shall occur and be continuing,
such Trustee will be under no obligation to exercise any of its rights or powers
under such Indenture at the request or direction of any of the holders of Notes
of any series or any related coupons unless such holders shall have offered to
such Trustee reasonable indemnity. (Indentures ss.ss.601, 603). The holders of a
majority in aggregate principal amount of the Outstanding Notes of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the related Trustee, or exercising any
trust or power conferred on the Trustee, with respect to Notes of that series,
provided that such direction does not conflict with applicable law or the
applicable Indenture or have a substantial likelihood of involving such Trustee
in personal liability. (Indentures ss.512).
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If an Event of Default with respect to Notes of any series at the time
Outstanding shall occur and be continuing, either the related Trustee or the
holders of at least 25% in aggregate principal amount of the Outstanding Notes
of that series may declare the principal, or, if any such Notes are Original
Issue Discount Notes, such lesser amounts as may be described in the applicable
Prospectus Supplement, of all such Outstanding Notes of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to Notes of any series has been made but before a judgment or decree for
payment of money due has been obtained by such Trustee, the holders of a
majority in aggregate principal amount of Outstanding Notes of that series may
rescind any declaration of acceleration and its consequences, if all payments
due (other than those due as a result of acceleration) have been made and all
Events of Default have been remedied or waived. (Indentures ss.502).
No holder of any Notes of any series or any related coupons will have any
right to institute any proceeding with respect to the applicable Indenture or
for any remedy thereunder, unless such holder shall have previously given to the
related Trustee written notice of a continuing Event of Default, with respect to
the Senior Notes or the Subordinated Notes of that series, or of a continuing
Default with respect to the Subordinated Notes of that series, the holders of at
least 25% in aggregate principal amount of the Outstanding Notes of that series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee, and the Trustee shall not have
received from the holders of a majority in aggregate principal amount of the
Outstanding Notes of that series a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days. (Indentures
ss.507). However, such limitations do not apply to a suit instituted by a holder
of an Outstanding Note of that series for enforcement of payment of the
principal of, or any premium or interest on, such Note on or after the
respective due dates expressed in such Note. (Indentures ss.508).
Citicorp is required to furnish to each Trustee annually a statement as to
its performance or fulfillment of covenants, agreements or conditions in the
applicable Indenture and as to the absence of defaults thereunder. (Indentures
ss.1004).
Meetings, Modification and Waiver
Modifications and amendments of each Indenture may be made by Citicorp and
the related Trustee with the consent of the holders of not less than a majority
in aggregate principal amount of the Outstanding Notes of each series affected
by such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the holders of each Outstanding Note
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Note, (b) reduce the principal
amount of, or premium or interest on, any Note, (c) change any obligation of
Citicorp to pay additional amounts, (d) reduce the amount of principal of an
Original Issue Discount Note payable upon acceleration of the Maturity thereof,
(e) change the coin or currency in which any Note or any premium or interest
thereon is payable, (f) impair the right to institute suit for the enforcement
of any payment on or with respect to any Note, (g) reduce the percentage in
principal amount of Outstanding Notes of any series, the consent of whose
holders is required for modification or amendment of the applicable Indenture or
for waiver of compliance with certain provisions of such Indenture or for waiver
of certain defaults, (h) reduce the requirements contained in such Indenture for
quorum or voting, (i) change any obligation of Citicorp to maintain an office or
agency in the places and for the purposes required by such Indenture, or (j)
modify any of the above provisions. (Indentures ss.902). Under certain limited
circumstances and only upon the fulfillment of certain conditions, modifications
and amendments of such Indenture may be made by Citicorp and the related Trustee
without the consent of any holders of Outstanding Notes. (Indentures ss.901).
The holders of at least a majority in aggregate principal amount of the
Outstanding Notes of a series may, on behalf of the holders of all the Notes of
that series, waive, insofar as that series is concerned, compliance by Citicorp
with certain restrictive provisions of the applicable Indenture. (Indentures
ss.1007). The holders of not less than a majority in aggregate principal amount
of the Outstanding Notes of a series may, on behalf of all holders of Notes of
that series and any coupons appertaining thereto, waive any past default under
the applicable Indenture with respect to Notes of that series, except a default
(a) in the payment of principal of or any premium or interest on any Note of
such series or (b) in respect of a covenant or provision of the applicable
Indenture which cannot be modified or amended without the consent of the holders
of each Outstanding Note of such series affected. (Indentures ss.513).
Each Indenture provides that in determining whether the holders of the
requisite principal amount of the Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver thereunder or are
present at a meeting of holders of Notes for quorum purposes, (i) the principal
amount of an Original Issue Discount
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Note that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof, and (ii) the principal amount of a Note
denominated in a foreign currency or currency unit shall be the U.S. dollar
equivalent, determined on the date of original issuance of such Note, of the
principal amount of such Note or, in the case of an Original Issue Discount
Note, the U.S. dollar equivalent, determined on the date of original issuance of
such Note, of the amount determined as provided in (i) above. (Indentures
ss.101).
Each Indenture contains provisions for convening meetings of the holders of
Notes of a series if Notes of that series are issuable as Bearer Notes.
(Indentures ss.1301). A meeting may be called at any time by the Trustee, and
also, upon request, by Citicorp or the holders of at least 10% in aggregate
principal amount of the Outstanding Notes of such series, in any such case upon
notice given in accordance with "Notices" below. (Indentures ss.1302). Except
for any consent which must be given by the holder of each Outstanding Note
affected thereby, as described above, any resolution presented at a meeting or
adjourned meeting at which a quorum is present may be adopted by the affirmative
vote of the holders of a majority in aggregate principal amount of the
Outstanding Notes of that series; provided, however, that, except for any
consent which must be given by the holder of each Outstanding Note affected
thereby, as described above, any resolution with respect to any consent, waiver,
request, demand, notice, authorization, direction or other action which may be
given by the holders of not less than a specified percentage in aggregate
principal amount of Outstanding Notes of a series may be adopted at a meeting or
an adjourned meeting at which a quorum is present only by the affirmative vote
of the holders of not less than such specified percentage in aggregate principal
amount of the Outstanding Notes of that series. Any resolution passed or
decision taken at any meeting of holders of Notes of any series duly held in
accordance with the applicable Indenture will be binding on all holders of Notes
of that series and the related coupons. The quorum at any meeting called to
adopt a resolution, and at any adjourned meeting, will be Persons holding or
representing a majority in aggregate principal amount of the Outstanding Notes
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent, waiver, request, demand, notice,
authorization, direction or other action which may be given by the holders of
not less than a specified percentage in aggregate principal amount of the
Outstanding Notes of a series, the Persons holding or representing such
specified percentage in aggregate principal amount of the Outstanding Notes of
such series will constitute a quorum. (Indentures ss.1304).
Consolidation, Merger and Sale of Assets
Citicorp may, without the consent of the holders of any of the Outstanding
Notes of a series, consolidate with, merge into or transfer its assets
substantially as an entirety to any corporation organized under the laws of any
domestic or foreign jurisdiction, provided that (i) the successor corporation
assumes Citicorp's obligations on the Notes of each series and under the
applicable Indenture, (ii) after giving effect thereto, with respect to the
Senior Notes, no Event of Default and no event which, after notice or lapse of
time, or both, would become an Event of Default shall have occurred and be
continuing, (iii) after giving effect thereto, with respect to the Subordinated
Notes, no Default, and no event which, after notice or lapse of time, or both,
would become a Default, shall have happened and be continuing, and (iv) certain
other conditions are met. (Indentures ss.ss.801, 802).
Assumption of Obligations
If so specified in an applicable Prospectus Supplement for a series of
Notes issuable as Bearer Notes, Citicorp may elect at any time to assign to a
Subsidiary or an Affiliate of Citicorp, and cause such Subsidiary or Affiliate
to assume, the obligations of Citicorp for the due and punctual payment of the
principal of and any premium and interest on all the Notes of such series and
the performance of every covenant of the applicable Indenture, except as
described below, on the part of Citicorp to be performed or observed with
respect to the Notes of such series, provided that (i) Citicorp has the right to
redeem the Notes of such series in the event of certain changes involving United
States taxes or the imposition of certain reporting requirements as expressly
described in the applicable Prospectus Supplement and the circumstances and
conditions expressly described in such Prospectus Supplement giving rise to
Citicorp's right so to redeem the Notes of such series have occurred, are in
effect and have been satisfied, as the case may be, (ii) no payment of principal
of or any premium or interest on any of the Notes of such series is overdue,
(iii) Citicorp unconditionally guarantees the performance of the obligations of
such Subsidiary or Affiliate under the applicable Indenture and under the Notes
of such series, (iv) Citicorp and such Subsidiary or Affiliate each agrees to
indemnify the holder of each Note of such series against (A) any tax, assessment
or governmental charge which is imposed on such holder by a jurisdiction other
than the United States or any political subdivision or taxing authority thereof
or
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therein with respect to, and which is withheld on the making of, the payment of
the principal of or any premium or interest on such Note, and which would not
have been so imposed and withheld had such assignment and assumption not been
made, (B) any tax, assessment or governmental charge imposed on or relating to
the act of assignment and assumption and (C) any costs or expenses of the act of
assignment and assumption, (v) after giving effect thereto, no Event of Default
with respect to the Senior Notes or the Subordinated Notes and no Default with
respect to the Subordinated Notes, and no event which, after notice or lapse of
time, or both, would become an Event of Default or Default, respectively, shall
have occurred and be continuing, and (vi) certain other conditions are met.
(Indentures ss.803). Notwithstanding any assignment and assumption with respect
to the Notes of a series as described in this paragraph, Citicorp will remain
unconditionally obligated to comply with such provisions of each Indenture as
may be required to comply with applicable law and, with respect to the Senior
Notes and the Original Subordinated Notes, Citicorp shall remain unconditionally
obligated to comply with the covenant described above under "Limitations on
Liens on Stock of Citibank". (Indentures ss.ss.803, 804).
Notices
Except as otherwise provided in the applicable Indenture, notices to
holders of Bearer Notes will be given by publication at least twice in a daily
newspaper of general circulation in The City of New York and in such other city
or cities as may be specified in such Notes. Notices to holders of Registered
Notes will be given by mail to the addresses of such holders as they appear in
the Security Register. (Indentures ss.ss.101, 106).
Title
Title to any Bearer Notes (including Bearer Notes in temporary global form
and in permanent global form) and any coupons appertaining thereto will pass by
delivery. Citicorp, the related Trustee and any agent of Citicorp or such
Trustee may treat the bearer of any Bearer Note and the bearer of any coupon and
the registered owner of any Registered Note as the absolute owner thereof
(whether or not such Note or coupon shall be overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes. (Indentures ss.308).
Replacement of Notes and Coupons
Any mutilated Note or a Note with a mutilated coupon appertaining thereto
will be replaced by Citicorp at the expense of the holder upon surrender of such
Note to the related Trustee. Notes or coupons that become destroyed, lost or
stolen will be replaced by Citicorp at the expense of the holder upon delivery
to such Trustee of evidence of the destruction, loss or theft thereof
satisfactory to Citicorp and such Trustee; in the case of any coupon which
becomes destroyed, lost or stolen, such coupon will be replaced by issuance of a
new Note in exchange for the Note to which such coupon appertains. In the case
of a destroyed, lost or stolen Note or coupon, an indemnity satisfactory to such
Trustee and Citicorp may be required at the expense of the holder of such Note
or coupon before a replacement Note will be issued. (Indentures ss.306).
Defeasance and Covenant Defeasance
Unless otherwise specified in the applicable Prospectus Supplement for a
series of Notes, Citicorp may cause itself (i) to be discharged from any and all
obligations with respect to such Notes (subject to the terms of the applicable
Indenture) ("defeasance") and/or (ii) to be released from its obligations
described above under "Limitations on Liens on Stock of Citibank" with respect
to the Senior Notes or Original Subordinated Notes ("covenant defeasance"), upon
the deposit with the related Trustee (or other qualifying trustee), in trust for
such purpose, of money and/or U.S. Government Obligations which through the
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient, without reinvestment, to pay the principal of and
any premium or interest on such Notes to Maturity or redemption, as the case may
be, and any mandatory sinking fund or analogous payments thereon. As a condition
to defeasance or covenant defeasance, Citicorp must deliver to the related
Trustee an Opinion of Counsel to the effect that the holders of such Notes will
not recognize income, gain or loss for United States federal income tax purposes
as a result of such defeasance or covenant defeasance and will be subject to
United States federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance or covenant
defeasance had not occurred. Such Opinion, in the case of defeasance under
clause (i) above, must refer to and be based upon a published ruling of the
Internal Revenue Service or changes in applicable United States federal income
tax law occurring after the date of the applicable Indenture. (Indentures
Article Fourteen).
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Defeasance by Citicorp with respect to the Notes of a series is permitted
notwithstanding Citicorp's prior covenant defeasance with respect to such
series. Following a defeasance, payment of such Notes may not be accelerated
because of an Event of Default or a Default. (Indentures ss.1402). Following a
covenant defeasance, payment of Senior Notes or the Original Subordinated Notes
may not be accelerated by reference to the covenant noted under clause (ii)
above. (Senior Indenture ss.1403, Original Subordinated Indenture ss.1403).
However, if such an acceleration were to occur, the realizable value at the
acceleration date of the money and U.S. Government Obligations in the defeasance
trust could be less than the principal and interest then due on such Notes, in
that the required deposit in the defeasance trust is based upon scheduled cash
flows rather than market value, which will vary depending upon interest rates
and other factors.
Subordination
With respect to Notes issued pursuant to the Subordinated Indenture, such
Subordinated Notes shall be subordinate and junior in right of payment, to the
extent set forth in such Indenture, to all Senior Indebtedness (as defined
below) of Citicorp. In the event that Citicorp shall default in the payment of
any principal of (or premium, if any) or interest on any Senior Indebtedness
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise, then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no direct
or indirect payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made on account of the principal of or interest on
the indebtedness evidenced by the Subordinated Notes, or in respect of any
redemption, retirement, purchase or other acquisition of any of the Subordinated
Notes. In the event of (a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to Citicorp, its creditors or its property, (b) any
proceeding for the liquidation, dissolution or other winding-up of Citicorp,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (c) any assignment by Citicorp for the benefit of creditors or (d)
any other marshalling of the assets of Citicorp, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution
under the Subordinated Notes, whether in cash, securities or other property,
shall be made to any Subordinated Note holders. In such event, any payment or
distribution under the Subordinated Notes, whether in cash, securities or other
property (other than securities of Citicorp or any other corporation provided
for by a plan of reorganization or readjustment the payment of which is
subordinate at least to the extent provided in the subordination provisions with
respect to the Subordinated Notes to the payment of all Senior Indebtedness at
the time outstanding, and to any securities issued in respect thereof under any
such plan of reorganization or readjustment), which would otherwise (but for
those subordination provisions) be payable or deliverable in respect of the
Subordinated Notes, shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall have been paid in full. If any
payment or distribution under the Subordinated Notes, of any character whether
in cash, securities or other property (other than securities of Citicorp or any
other corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the Subordinated Notes, to the payment
of all Senior Indebtedness at the time outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment), shall
be received by any holder of any Subordinated Notes in contravention of any of
the terms hereof and before all the Senior Indebtedness shall have been paid in
full, such payment or distribution or security shall be received in trust for
the benefit of, and shall be paid over or delivered and transferred, to the
holders of the Senior Indebtedness at the time outstanding in accordance with
the priorities then existing among such holders for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay all
such Senior Indebtedness in full (Subordinated Indenture ss.1501).
"Senior Indebtedness" means any obligation of Citicorp to its creditors,
whether now outstanding or subsequently incurred, other than (a) all
subordinated securities and subordinated capital notes issued or which may be
issued under the respective indentures, dated as of April 15, 1985 and April 1,
1986, each between Citicorp and Chemical Bank, as the same may be amended from
time to time; (b) Guaranteed Floating Rate Subordinated Capital Notes Due
January 30, 1997 issued under the indenture, dated as of January 30, 1985, among
Citicorp Person-to-Person, Inc. ("Person-to-Person"), Citicorp and Morgan
Guaranty Trust Company of New York, as trustee (as of April 30, 1985, Citicorp
Banking Corporation ("CBC") assumed such obligations of Person-to-Person and as
of November 28, 1994, Citicorp assumed such obligations of CBC); (c) Guaranteed
Floating Rate Subordinated Capital Notes Due July 10, 1997 issued by CBC under
the indenture, dated as of July 10, 1985, among CBC, Citicorp and Morgan
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Guaranty Trust Company of New York, as trustee (as of November 28, 1994,
Citicorp assumed such obligations of CBC); (d) all guarantees of notes or
obligations which may be issued under the indentures referenced in clauses (b)
and (c) above, as the same may be amended from time to time; (e) any obligation
as to which, in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such obligation is not Senior
Indebtedness (including, without limitation, all other unsecured and
subordinated indebtedness of Citicorp); and (f) any subordinated securities
issued under the Original Subordinated Indenture or the Subordinated Indenture,
including Subordinated Notes. (Subordinated Indenture ss.101).
Neither Indenture limits the issuance of additional Senior Indebtedness.
Because Citicorp is a holding company, its rights and the rights of its
creditors, including the holders of the Subordinated Notes to be offered, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that Citicorp may itself be a creditor with
recognized claims against the subsidiary.
Governing Law
Each Indenture, the Notes and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York. (Indentures
ss.113).
Concerning the Trustees
United States Trust Company of New York, the Senior Trustee, has its
principal corporate trust office at 114 West 47th Street, New York, New York
10036 and is also trustee under several other Citicorp indentures under which
unsecured debt securities are currently outstanding.
Chemical Bank, the Subordinated Trustee, has its principal corporate trust
office at 450 West 33rd Street, New York, New York 10001, and is also trustee
under several other Citicorp indentures under which subordinated unsecured debt
securities are currently outstanding and under several other indentures of an
affiliate of Citicorp under which securities are currently outstanding that are
guaranteed on a subordinated and unsecured basis by Citicorp.
Citicorp or its affiliates maintain certain accounts and other banking
relationships with each Trustee or certain affiliates of each Trustee.
Limitations on Issuance of Euro-Notes
In compliance with United States federal tax laws and regulations,
Euro-Notes may not be offered or sold during the restricted period (as defined
below) in the United States or its possessions or to a United States person
(each as defined below) other than an exempt purchaser (as defined below).
Furthermore, in compliance with such federal tax laws and regulations,
Euro-Notes may not be delivered, in connection with the sale thereof during the
restricted period, in definitive form within the United States or its
possessions.
Citicorp will not offer or sell the Euro-Notes during the restricted period
to a person who is within the United States or its possessions or to a United
States person other than an exempt purchaser, and any underwriter, agent and
dealer participating in the offering of Euro-Notes must covenant that: (i) it
has not and will not offer or sell the Euro-Notes during the restricted period
to a person who is within the United States or its possessions or to a United
States person other than an exempt purchaser; (ii) it has in effect, in
connection with the offer and sale of the Euro-Notes during the restricted
period, procedures reasonably designed to ensure that its employees or agents
who are directly engaged in selling the Euro-Notes are aware that the Euro-Notes
cannot be offered or sold during the restricted period to a person who is within
the United States or its possessions or who is a United States person (other
than an exempt purchaser); (iii) it will not permit any affiliate (within the
meaning of Section 1.163-5(c)(2)(i)(D)(4)(iii) of the regulations issued under
the Internal Revenue Code (the "Treasury Regulations")) to acquire any EuroNote
for the purpose of offering or selling it during the restricted period unless
such affiliate provides it (for the benefit of Citicorp) with the covenants
contained in this paragraph; (iv) it will not deliver any Euro- Notes, in
connection with the sale thereof during the restricted period, in definitive
form within the United States or its possessions; (v) it will not enter into any
written contract with another distributor (within the meaning of Section
1.163-5(c)(2)(i)(D)(4) of the Treasury Regulations) to offer or sell the
Euro-Notes during the restricted period unless such distributor provides it (for
the benefit of Citicorp) with the covenants contained in this paragraph; and
(vi) if it is a United States person, it is acquir-
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ing the Euro-Notes for purposes of resale in connection with their original
issuance and if it retains the Euro-Notes for its own account, it will only do
so in accordance with the requirements of Section 1.163-5(c)(2)(i)(D)(6) of the
Treasury Regulations.
For purposes of the selling restrictions described in this section, an
offer or sale will be considered to be made to a person who is within the United
States or its possessions if the offeror or seller of the Euro-Notes has an
address within the United States or its possessions for the offeree or buyer of
the Euro-Notes with respect to the offer or sale. Bearer Notes and any coupons
appertaining thereto (including Euro-Notes in permanent global form exchangeable
for Bearer Notes) will bear a legend to the following effect: "Any United States
person who holds this obligation will be subject to limitations under the United
States income tax laws, including the limitations provided in Sections 165(j)
and 1287(a) of the Internal Revenue Code".
Purchasers of Euro-Notes may be affected by certain limitations under
United States tax laws. See "United States Taxation".
As used herein, "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States and an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, "United States" means the United States of America (including the States
and the District of Columbia) and "possessions" of the United States include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
Northern Mariana Islands, "restricted period" means with respect to a Note, the
period beginning on the earlier of the closing date or the first date on which
the Note is offered to persons other than distributors and ending on the
expiration of the 40-day period beginning on the closing date, except that,
notwithstanding the foregoing, any offer or sale of the Notes by Citicorp or a
distributor shall be deemed to be made during the restricted period if Citicorp
or the distributor holds the Note as part of an unsold allotment or
subscription, and "exempt purchaser" means (A) an exempt distributor (as defined
in Section 1.163-5(c)(2)(i)(D)(5) of the Treasury Regulations) that covenants
that it is buying the Euro-Notes for the purpose of resale in connection with
the original issuance thereof, and that if it retains the Euro-Notes for its own
account, it will do so only in accordance with the requirements of Section
1.163-5(c)(2)(i)(D)(6) of the Treasury Regulations; (B) an international
organization described in Section 7701(a)(18) of the Internal Revenue Code; (C)
a foreign central bank (as defined in Section 895 of the Internal Revenue Code
and the Treasury Regulations thereunder); (D) a foreign branch of a United
States financial institution as described in Section 1.163-5(c)(2)(i)(D)(6)(i)
of the Treasury Regulations; and (E) a United States person who acquires the
Euro-Notes through the foreign branch of a United States financial institution
and who holds the Euro-Notes through such financial institution. Notwithstanding
the foregoing, however, (i) a person described in (A) of this paragraph will not
be considered an exempt purchaser with respect to offers to a non-United States
office of such person; (ii) a person described in (B) or (C) of this paragraph
will not be considered an international organization or a foreign central bank,
as the case may be, with respect to offers that are not made directly and
specifically to such person; (iii) a person described in (E) of this paragraph
will be considered an exempt purchaser only with respect to sales of the
Euro-Notes; and (iv) in the case of persons described in (D) or (E) of this
paragraph, the financial institution holding the Euro-Note provides a
certificate to Citicorp or the distributor selling the Euro-Note stating that it
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code and the Treasury Regulations thereunder.
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FOREIGN CURRENCY RISKS
General
Notes may be denominated in such foreign currencies or currency units as
may be designated by Citicorp at the time of offering (the "Foreign Currency
Securities").
PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN FOREIGN CURRENCY
SECURITIES. FOREIGN CURRENCY SECURITIES ARE NOT AN APPROPRIATE INVESTMENT
FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
The information set forth below is directed to prospective purchasers of
Foreign Currency Securities who are United States residents and Citicorp
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States with respect to any matters that may
affect the purchase or holding of a Foreign Currency Security or the receipt of
payments of principal of and any premium and interest on a Foreign Currency
Security in a Specified Currency (as defined below under "United States
Taxation--Payments of Interest"). Such persons should consult their own legal
advisors with regard to such matters.
Exchange Rates and Exchange Controls
An investment in Foreign Currency Securities entails significant risks that
are not associated with a similar investment in a security denominated in U.S.
dollars. Such risks include, without limitation, the possibility of significant
changes in the rate of exchange between the U.S. dollar and the Specified
Currency and the possibility of the imposition or modification of foreign
exchange controls by either the United States or foreign governments. Such risks
generally depend on economic and political events over which Citicorp has no
control. In recent years, rates of exchange between the U.S. dollar and certain
foreign currencies have been highly volatile and such volatility may be expected
in the future. Fluctuations in any particular exchange rate that have occurred
in the past are not necessarily indicative, however, of fluctuations in the rate
that may occur during the term of any Foreign Currency Security. Changes in the
exchange rate of the Specified Currency applicable to a Foreign Currency
Security against the U.S. dollar would generally result in changes in the U.S.
dollar-equivalent market value of such Security.
UNITED STATES TAXATION
The following is a summary of the principal United States federal income
tax consequences of the ownership and disposition of Notes and is included
herein in reliance upon the opinion of E. Noel Harwerth, Esq., Chief Tax Officer
of Citibank. It deals only with Notes held as capital assets by initial
purchasers and does not deal with special classes of holders, such as dealers in
securities or currencies, life insurance companies, tax-exempt organizations,
persons holding Notes as a hedge or hedged against currency risks or as part of
a straddle or conversion transaction, or persons whose functional currency is
not the U.S. dollar. The summary is based on the Internal Revenue Code of 1986,
as amended (the "Code"), its legislative history, existing and proposed Treasury
regulations thereunder, published rulings and court decisions, as currently in
effect, all of which are subject to change, possibly with retroactive effect. In
particular, the discussion of original issue discount ("OID") is based in part
on Treasury regulations under the OID and related provisions of the Code (the
"final regulations"). The final regulations adopt, with certain changes, the
proposed regulations on the same subjects that were published in the Federal
Register on December 21, 1992 (the "proposed regulations"). Generally, the final
regulations apply to debt instruments issued on or after April 4, 1994. The
discussion below applies only to Notes having a term of 30 years or less; the
United States federal income tax consequences of ownership of Notes having a
term in excess of 30 years will be discussed in the applicable Pricing
Supplement.
Persons considering the purchase of Notes should consult their own tax
advisors concerning the application of the United States federal income tax laws
to their particular situations, as well as the application of state or local
laws or the laws of any other taxing jurisdiction.
United States Holders
As used herein, "United States Holder" means a beneficial owner of a Note
who or which is (i) a citizen or resident of the United States, (ii) a
corporation organized in or under the laws of the United States or any political
subdiv-
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ision thereof, or (iii) a person otherwise subject to United States federal
income taxation on a net income basis in respect of a Note. It is assumed that
the functional currency of a United States Holder is the U.S. dollar.
Payments of Interest
Interest on a Note (whether payable in U.S. dollars or in a currency,
composite currency or basket of currencies other than U.S. dollars (a "Specified
Currency")), other than interest on a discount Note (as defined below) that is
not "qualified stated interest" (as defined below) will be taxable to a United
States Holder as ordinary interest income at the time it is accrued or is
received depending on the United States Holder's method of accounting for tax
purposes. If an interest payment is denominated in, or determined by reference
to, a Specified Currency, the amount of income recognized by a cash basis United
States Holder will be the U.S. dollar value of the interest payment based on the
interest rate in effect at the time such payment is received, regardless of
whether the payment is in fact converted to U.S. dollars. Unless an election
described in the next succeeding paragraph is made, accrual basis United States
Holders recognize interest income based on the average exchange rate for the
interest accrual period (or, with respect to an accrual period that spans two
taxable years, the partial period within the taxable year). Upon the receipt of
an interest payment (including a payment attributable to accrued but unpaid
interest upon the sale or retirement of a Note) denominated in, or determined by
reference to, a Specified Currency, an accrual basis United States Holder will
recognize foreign currency gain or loss to the extent of the difference, if any,
between such average exchange rate and the exchange rate at the time of receipt,
which gain or loss will be treated as ordinary income or loss, regardless of
whether the payment is in fact converted into U.S. dollars.
An accrual basis United States Holder may elect to translate interest
income into U.S. dollars at the exchange rate in effect on the last day of the
accrual period, or, in the case of an accrual period that spans two taxable
years, at the exchange rate in effect on the last day of the partial period
within the taxable year. Additionally, if a payment of interest is actually
received within 5 business days of the last day of the accrual period or taxable
year, an electing accrual basis United States Holder may instead translate such
accrued interest into U.S. dollars at the exchange rate in effect on the day of
actual receipt. Any such election will apply to all debt instruments held by the
United States Holder at the beginning of the first taxable year to which the
election applies or thereafter acquired by the United States Holder and will be
irrevocable without the consent of the Internal Revenue Service (the "Service").
Original Issue Discount
General. For United States federal income tax purposes, a Note, other than
a Note with a term of one year or less (a "short term note"), will be treated as
issued at an original issue discount (a "discount Note") if the excess of its
"stated redemption price at maturity" over its issue price is more than a "de
minimis amount" (as defined below). Generally, the issue price of a Note will be
the first price at which a substantial amount of Notes included in the issue of
which the Note is a part is sold. The stated redemption price at maturity of a
Note is the total of all payments provided by the Note that are not payments of
"qualified stated interest". A qualified stated interest payment is generally
any one of a series of stated interest payments on a Note that are
unconditionally payable at least annually at a single fixed rate (with certain
exceptions for lower rates paid during some periods) applied to the outstanding
principal amount of the Note. Special rules are provided for "variable rate
Notes" (as defined below).
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is less than 1/4 of 1 percent of the Note's stated
redemption price at maturity multiplied by the number of complete years to its
maturity (the "de minimis amount"), then such excess, if any, constitutes "de
minimis OID" and the Note is not a discount Note. Unless the election described
below under "Election to Treat All Interest as OID" is made, a United States
Holder of a Note with de minimis OID must include such de minimis OID in income
as stated principal payments on the Note are made. The includible amount with
respect to each such payment will equal the product of the total amount of the
Note's de minimis OID and a fraction, the numerator of which is the amount of
the principal payment made and the denominator of which is the stated principal
amount of the Note.
Inclusion of Original Issue Discount in Income. United States Holders
(including cash basis United States Holders) of discount Notes having a maturity
of more than one year from their date of issue must include OID in income as it
accrues on a constant yield basis, generally before the receipt of cash
attributable to such income and generally in increasingly greater amounts over
the life of the Note. The amount of discount includible in income by the holder
of a discount Note is the sum of the daily portions of discount with respect to
the discount Note for each day during the taxable year or portion of the taxable
year in which it holds such Note ("accrued OID"). The daily portion
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is determined by allocating to each day in any "accrual period" a pro rata
portion of the OID allocable to such accrual period.
Accrual periods with respect to a Note may be of any length selected by the
United States Holder, as long as (i) no accrual period is longer than one year
and (ii) each scheduled payment of interest or principal on the Note occurs on
either the first or last day of an accrual period. The amount of OID allocable
to any accrual period is an amount equal to the excess of (a) the product of the
discount Note's "adjusted issue price" (as defined below) at the beginning of
such accrual period and its yield to maturity (determined on the basis of
compounding at the close of each accrual period and adjusted for the length of
such period) over (b) the sum of the payments of qualified stated interest, if
any, allocable to the accrual period. The "adjusted issue price" of a discount
Note at the beginning of any accrual period is the issue price of the Note
increased by (i) the amount of accrued OID for each prior accrual period and
decreased by (ii) the amount of any payments previously made on the Note that
were not qualified stated interest payments. For purposes of determining the
amount of OID allocable to an accrual period if an interval between payments of
qualified stated interest on the Note contains more than one accrual period, the
amount of qualified stated interest payable at the end of the interval
(including any qualified stated interest that is payable on the first day of the
accrual period immediately following the interval) is allocated pro rata on the
basis of relative length to each accrual period in the interval, and the
adjusted issue price at the beginning of each accrual period must be increased
by the amount of any qualified stated interest that has accrued prior to the
first day of the accrual period but that is not payable until the end of the
interval. The amount of OID allocable to an initial short accrual period may be
computed using any reasonable method if all other accrual periods other than a
final short accrual period are of equal length. The amount of OID allocable to
the final accrual period is the difference between the amount payable at the
maturity of the Note (other than any payment of qualified stated interest) and
the Note's adjusted issued price as of the beginning of the final accrual
period.
Acquisition Premium. A United States Holder that purchases a Note for an
amount less than or equal to the sum of all amounts payable on the Note after
the purchase date other than payments of qualified stated interest but in excess
of its adjusted issue price (any such excess being "acquisition premium") and
that does not make the election described below under "Election to Treat All
Interest as Original Issue Discount" is permitted to reduce the daily portions
of OID by a fraction, the numerator of which is the excess of the United States
Holder's adjusted basis in the Note immediately after its purchase over the
adjusted issue price of the Note, and the denominator of which is the excess of
the sum of all amounts payable on the Note after the purchase date, other than
payments of qualified stated interest, over the Note's adjusted issue price.
Market Discount. A Note, other than a short-term Note, will be treated as
purchased at a market discount (a "market discount Note") if (i) the amount for
which a United States Holder purchased the Note is less than the Note's issue
price (as determined above under "Original Issue Discount--General") and (ii)
the Note's stated redemption price at maturity or, in the case of a discount
Note, the Note's "revised issue price", exceeds the amount for which the United
States Holder purchased the Note by at least 1/4 of 1 percent of such Note's
stated redemption price at maturity or revised issue price, respectively,
multiplied by the number of complete years to the Note's maturity. If such
excess is not sufficient to cause the Note to be a market discount Note, then
such excess constitutes "de minimis market discount". The Code provides that,
for these purposes, the "revised issue price" of a Note generally equals its
issue price, increased by the amount of any OID that has accrued on the Note.
Any gain recognized on the maturity or disposition of a market discount
Note will be treated as ordinary income to the extent that such gain does not
exceed the accrued market discount on such Note. Alternatively, a United States
Holder of a market discount Note may elect to include market discount in income
currently over the life of the Note. Such an election shall apply to all debt
instruments with market discount acquired by the electing United States Holder
on or after the first day of the first taxable year to which the election
applies. This election may not be revoked without the consent of the Service.
Market discount on a market discount Note will accrue on a straight-line
basis unless the United States Holder elects to accrue such market discount on a
constant-yield to maturity basis. Such an election shall apply only to the Note
with respect to which it is made and may not be revoked without the consent of
the Service. A United States Holder of a market discount Note that does not
elect to include market discount in income currently generally will be required
to defer deductions for interest on borrowings allocable to such Note in an
amount not exceeding the accrued market discount on such Note until the maturity
or disposition of such Note.
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Pre-Issuance Accrued Interest. If (i) a portion of the initial purchase
price of a Note is attributable to pre-issuance accrued interest, (ii) the first
stated interest payment on the Note is to be made within one year of the Note's
issue date and (iii) the payment will equal or exceed the amount of pre-issuance
accrued interest, then the United States Holder may elect to decrease the issue
price of the Note by the amount of pre-issuance accrued interest. In that event,
a portion of the first stated interest payment will be treated as a return of
the excluded pre-issuance accrued interest and not as an amount payable on the
Note.
Notes Subject to Contingencies Including Optional Redemption. In general,
if a Note provides for an alternative payment schedule or schedules applicable
upon the occurrence of a contingency or contingencies and the timing and amounts
of the payments that comprise each payment schedule are known as of the issue
date, the yield and maturity of the Note are determined by assuming that the
payments will be made according to the Note's stated payment schedule. If,
however, based on all the facts and circumstances as of the issue date, it is
more likely than not that the Note's stated payment schedule will not occur,
then, in general, the yield and maturity of the Note are to be computed based on
the payment schedule most likely to occur.
Notwithstanding the general rules for determining yield and maturity in the
case of Notes subject to contingencies, if Citicorp has an unconditional option
or options to redeem a Note, or the holder has an unconditional option or
options to cause a Note to be repurchased, prior to the Note's stated maturity,
then (i) in the case of an option or options of Citicorp, Citicorp will be
deemed to exercise or not exercise an option or combination or options in the
manner that minimizes the yield on the Note and (ii) in case of an option or
options of the holder, the holder will be deemed to exercise or not exercise an
option or combination of options in the manner that maximizes the yield on the
Note. For purposes of those calculations, the yield on the Note is to be
determined by using any date on which the Note may be redeemed or repurchased as
the maturity date and the amount payable on such date in accordance with the
terms of the Note as the principal amount payable at maturity.
If a contingency (including the exercise of an option) actually occurs or
does not occur contrary to an assumption made according to the above rules (a
"change in circumstances") then, solely for purposes of the accrual of OID, the
yield and maturity of the Note are to be redetermined by treating the Note as
reissued on the date of the change in circumstances for an amount equal to the
Note's adjusted issue price on that date, except to the extent that a portion of
the Note is repaid as a result of a change in circumstances.
Election to Treat All Interest as OID. A United States Holder may elect to
include in gross income all interest that accrues on a Note using the
constant-yield method described above under the heading "Original Issue
Discount--General", with the modifications described below. For the purposes of
this election, interest includes stated interest, OID, de minimis OID, market
discount, de minimis market discount and unstated interest, as adjusted by any
amortizable bond premium (described below under "Notes Purchased at a Premium")
or acquisition premium.
In applying the constant-yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
United States Holder's adjusted basis in the Note immediately after its
acquisition, the issue date of the Note will be the date of its acquisition by
the electing United States Holder, and no payments on the Note will be treated
as payments of qualified stated interest. This election will generally apply
only to the Note with respect to which it is made and may not be revoked without
the consent of the Service. If this election is made with respect to a Note with
amortizable bond premium, then the electing United States Holder will be deemed
to have elected to apply amortizable bond premium against interest with respect
to all debt instruments with amortizable bond premium (other than debt
instruments the interest on which is excludible from gross income) held by the
electing United States Holder as of the beginning of the taxable year in which
the Note with respect to which the election is made is acquired or thereafter
acquired. The deemed election with respect to amortizable bond premium may not
be revoked without the consent of the Service.
If the election to apply the constant-yield method to all interest on a
Note is made with respect to a market discount Note, the electing United States
Holder will be treated as having made the election discussed above under
"Original Issue Discount--Market Discount" to include market discount in income
currently over the life of all debt instruments held or thereafter acquired by
such United States Holder.
Variable Rate Notes. A "variable rate Note" is a Note that: (i) has an
issue price that does not exceed the total noncontingent principal payments by
more than the lesser of (1) the product of (x) the total noncontingent principal
payments, (y) the number of complete years to maturity from the issue date and
(z) .015, or (2) 15 percent of the total noncontingent principal payments, and
(ii) provides for stated interest compounded or paid at least annually at (1)
one
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or more "qualified floating rates", (2) a single fixed rate and one or more
qualified floating rates, (3) a single "objective rate" or (4) a single fixed
rate and a single objective rate that is a "qualified inverse floating rate".
A qualified floating rate or objective rate in effect at any time during
the term of the instrument must be set at a "current value" of that rate. A
"current value" of a rate is the value of the rate on any day that is no earlier
than three months prior to the first day on which that value is in effect and no
later than one year following that first day.
A variable rate is a "qualified floating rate" if (i) variations in the
value of the rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the Note
is denominated or (ii) it is equal to the product of such a rate and either (a)
a fixed multiple that is greater than zero but not more than 1.35, or (b) a
fixed multiple greater than zero but not more than 1.35, increased or decreased
by a fixed rate. A rate is not a qualified floating rate, however, if the rate
is subject to certain restrictions (including caps, floors, or other similar
restrictions) unless such restrictions are fixed throughout the term of the Note
or are not reasonably expected to significantly affect the yield on the Note.
An "objective rate" is a rate, other than a qualified floating rate,
determined using a single, fixed formula and based on (i) one or more qualified
floating rates, (ii) one or more rates each of which would be a qualified
floating rate for a debt instrument denominated in a currency other than the
currency in which the debt instrument is denominated, (iii) the yield or changes
in the price of one or more actively traded items of personal property other
than stock or debt of the issuer or a related party or (iv) a combination of
objective rates. A variable rate is not an objective rate, however, if it is
reasonably expected that the average value of the rate during the first half of
the Note's term will be either significantly less than or significantly greater
than the average value of the rate during the final half of the Note's term. An
objective rate is a "qualified inverse floating rate" if (i) the rate is equal
to a fixed rate minus a qualified floating rate and (ii) the variations in the
rate can reasonably be expected to inversely reflect contemporaneous variations
in the cost of newly borrowed funds.
In general, if a variable rate Note provides for stated interest at a
single qualified floating rate or objective rate, all stated interest on the
Note is qualified stated interest and the amount of OID, if any, is determined
by using, in the case of a qualified floating rate or qualified floating inverse
rate, the value as of the issue date of the qualified floating rate or qualified
inverse floating rate, or in the case of any other objective rate, a fixed rate
that reflects the yield reasonably expected for the Note.
If a variable rate Note does not provide for stated interest at a single
qualified floating rate or objective rate, or at a fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals on the Note are generally determined by (i) determining a fixed rate
substitute for each variable rate provided under the variable rate Note
(generally, the value of each variable rate as of the issue date or, in the case
of an objective rate that is not a qualified inverse floating rate, a rate that
reflects the reasonably expected yield on the Note), (ii) constructing the
equivalent fixed rate debt instrument (using the fixed rate substitute described
above), (iii) determining the amount of qualified stated interest and OID with
respect to the equivalent fixed rate debt instrument and (iv) making the
appropriate adjustments for actual variable rates during the applicable accrual
period.
If a variable rate Note provides for stated interest either at one or more
qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately preceding paragraph, except that
the variable rate Note is treated, for purposes of the first three steps of the
determination, as if it provided for a qualified floating rate (or a qualified
inverse floating rate, as the case may be) rather than the fixed rate. The
qualified floating (or qualified inverse floating rate) replacing the fixed rate
must be such that the fair market value of the Variable Rate Note as of the
issue date would be approximately the same as the fair market value of an
otherwise identical debt instrument that provides for the qualified floating
rate (or qualified inverse floating rate) rather than the fixed rate.
Short-Term Notes. In general, an individual or other cash basis United
States Holder of a short-term Note is not required to accrue OID (as
specifically defined below for the purposes of this paragraph) for United States
federal income tax purposes unless it elects to do so (but may be required to
include any stated interest in income as the interest is received). Accrual
basis United States Holders and certain other United States Holders, including
banks, regulated investment companies, dealers in securities, common trust
funds, United States Holders who hold Notes as part of certain identified
hedging transactions, certain pass-through entities and cash basis United States
Holders who so elect, are required to accrue OID on short-term Notes on either a
straight-line basis or under the constant-yield method
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(based on daily compounding), at the election of the United States Holder.
In the case of a United States Holder not required and not electing to include
OID in income currently, any gain realized on the sale or retirement of the
short-term Note will be ordinary income to the extent of the OID accrued on a
straight-line basis (unless an election is made to accrue the OID under the
constant-yield method) through the date of sale or retirement. United States
Holders who are not required and do not elect to accrue OID on short-term Notes
will be required to defer deductions for interest on borrowings allocable to
short-term Notes in an amount not exceeding the deferred income until the
deferred income is realized. For purposes of determining the amount of OID
subject to these rules, all interest payments on a short-term Note, including
stated interest, are included in the short-term Note's stated redemption price
at maturity.
Specified Currency Discount Notes. OID for any accrual period on a discount
Note that is determined in, or determined by reference to, a Specified Currency
will be determined in the Specified Currency and then translated into U.S.
dollars in the same manner as stated interest accrued by an accrual basis United
States Holder, as described under "Payments of Interest". Upon receipt of an
amount attributable to OID (whether in connection with a payment of interest or
the sale or retirement of a Note), a United States Holder may recognize ordinary
income or loss.
Notes Purchased at a Premium
A United States Holder that purchases a Note for an amount in excess of its
principal amount may elect to treat such excess as "amortizable bond premium",
in which case the amount required to be included in the United States Holder's
income each year with respect to interest on the Note will be reduced by the
amount of amortizable bond premium allocable (based on the Note's yield to
maturity) to such year. In the case of a Note that is denominated in a Specified
Currency, bond premium will be computed in units of the Specified Currency, and
amortizable bond premium will reduce interest income in units of the Specified
Currency. At the time amortizable bond premium offsets interest income, a United
States Holder may realize exchange gain or loss (taxable as ordinary income or
loss), measured by the difference between exchange rates at that time and at the
time of the acquisition of the Note. Any election to amortize bond premium shall
apply to all bonds (other than bonds the interest on which is excludible from
gross income) held by the United States Holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the United
States Holder, and is irrevocable without the consent of the Service.
Indexed Notes
The applicable Prospectus Supplement or Prospectus Supplements will contain
a discussion of any special United States federal income tax rules with respect
to Notes, payments on which are determined by reference to the value of any
currencies, commodities, securities or any index thereof.
Purchase, Sale and Retirement of Notes
A United States Holder's tax basis in a Note will be its U.S. dollar cost
(as defined below) increased by the amount of any OID or market discount
previously included in the United States Holder's income with respect to the
Note and the amount, if any, of income attributable to de minimis original issue
discount or de minimis market discount included in the United States Holder's
income with respect to the Note, and reduced by (i) the amount of any payments
that are not qualified stated interest payments, and (ii) the amount of any
amortizable bond premium applied to reduce interest on the Note. The U.S. dollar
cost of a Note purchased with a Specified Currency will generally be the U.S.
dollar value of the purchase price on the date of purchase or, in the case of
Notes traded on an established securities market (as defined in the final
regulations) that are purchased by a cash basis United States Holder (or an
accrual basis United States Holder that so elects), on the settlement date for
the purchase. Gain or loss will be recognized upon the sale or retirement of a
Note equal to the difference between the amount realized upon the sale or
retirement and the tax basis in the Notes. The amount realized on a sale or
retirement for an amount in Specified Currency will be the U.S. dollar value of
such amount on the date of sale or retirement or, in the case of Notes traded on
an established securities market sold by a cash basis United States holder (or
an accrual basis United States Holder that so elects), on the settlement date
for the sale. Except to the extent described under "Original Issue
Discount--Short-Term Notes," "Original Issue Discount--Market Discount" or in
the next paragraph, such gain or loss will be long-term capital gain or loss if,
at the time of sale or retirement, the Note has been held for more than one
year.
In general, gain or loss recognized by a United States Holder on the sale
or retirement of a Note which is attributable to changes in exchange rates will
be ordinary income or loss. However, exchange gain or loss is recognized only to
the extent of total gain or loss realized on the transaction.
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Exchange of the Specified Currency
Specified Currency received as interest or on the sale or retirement of a
Note will have a tax basis equal to its U.S. dollar value at the time such
interest is received or at the time of such sale or retirement. Specified
Currency that is purchased will generally have a tax basis equal to the U.S.
dollar value of the Specified Currency on the date of purchase. Any gain or loss
realized on a sale or other disposition of a Specified Currency (including its
use to purchase Notes or upon exchange for U.S. dollars) will be ordinary income
or loss.
Bearer Notes
Under Sections 165(j) and 1287(a) of the Internal Revenue Code, a Holder
that is a United States person generally will not be entitled to deduct any loss
on Bearer Notes (including for purposes of this paragraph Notes in global form
exchangeable for Bearer Notes) or coupons (other than Bearer Notes or coupons
having a maturity of one year or less from their date of issuance) and must
treat as ordinary income any gain realized on the sale or other disposition
(including a retirement of the Note) of Bearer Notes or coupons (other than
Bearer Notes or coupons having a maturity of one year or less from their date of
issue).
United States Alien Holders
Under present United States federal income and estate tax law and subject
to the discussion of backup withholding below:
(a) payments of principal (including any OID) and any premium and
interest on the Notes by Citicorp or any of its Paying Agents to any United
States Alien Holder (as defined below) will not be subject to United States
federal withholding tax, provided that in the case of interest or OID, (1)
the beneficial owner does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of Citicorp
entitled to vote, (2) the beneficial owner is not a controlled foreign
corporation that is related to Citicorp through stock ownership, and (3) if
the Note is a Registered Note (including such Notes which were received in
exchange for Bearer Notes), either (i) the beneficial owner of the Notes
certifies to Citicorp or its agent, under penalties of perjury, that he is
not a United States person (as defined under "Limitations on Issuance of
Euro-Notes") and provides his name and address, or (ii) a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the Notes on behalf of the beneficial
owner certifies to Citicorp or its Paying Agent under penalties of perjury
that such statement has been received from the beneficial owner by it or by
a financial institution between it and the beneficial owner and furnishes
the payor with a copy thereof;
(b) a United States Alien Holder will not be subject to United States
federal withholding tax on gain realized on the sale, exchange or
redemption of a Note; and
(c) a Note or coupon held by an individual who at the time of death is
not a citizen or resident of the United States will not be subject to
United States federal estate tax as a result of such individual's death if,
at the time of such death, the individual does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of Citicorp entitled to vote and the income on the Notes
would not have been effectively connected with the conduct of a trade or
business by the individual in the United States.
As used herein, a "United States Alien Holder" is a Holder who is a United
States Alien (as defined below). As used herein, a "United States Alien" means
any person who, for United States federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a non-resident alien fiduciary of
a foreign estate or trust, or a foreign partnership to the extent that one or
more of the members is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non-resident alien fiduciary
of a foreign estate or trust, in each case not subject to United States federal
income tax on a net income basis in respect of a Note.
Backup Withholding and Information Reporting
Payments of principal (including OID, if any) and any premium and interest
made within the United States by Citicorp or any of its Paying Agents are
generally subject to information reporting and possibly to "backup withholding"
at a rate of 31%. Information reporting and backup withholding do not apply to
payments of principal (including OID, if any) and any premium and interest made
outside the United States by Citicorp or a Paying Agent on a Bearer Note or
coupon, or to payments made on a Registered Note (including such Notes which
were received in exchange
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for Bearer Notes) if the certification described in clause (a)(3) under
"United States Alien Holders" is received, provided, in each case, that the
payor does not have actual knowledge that the holder is a United States person.
In addition, if payments are collected outside the United States by a foreign
office of a custodian, nominee or other agent acting on behalf of a beneficial
owner of a Bearer Note or coupon, such custodian, nominee or other agent will
not be required to deduct backup withholding from payments made to such owner.
However, if the custodian, nominee or other agent is a United States person, a
controlled foreign corporation for United States tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with the
conduct of a trade or business within the United States for a specified
three-year period, information reporting will be required with respect to
payments made to such owner unless such custodian, nominee or other agent has
documentary evidence in its files of the owner's foreign status and has no
actual knowledge to the contrary, or the owner otherwise establishes an
exemption.
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50% or
more of whose gross income is effectively connected with the conduct of a trade
or business within the United States for a specified three-year period,
information reporting will apply to such payments unless such broker has
documentary evidence in its files of the owner's foreign status and has no
actual knowledge to the contrary, or the owner otherwise establishes an
exemption. Payment of the proceeds from a sale of a Note to or through the
United States office of a broker is subject to information reporting and backup
withholding unless the holder or beneficial owner certifies as to its non-United
States status or otherwise establishes an exemption from information reporting
and backup withholding.
Backup withholding will generally not apply to United States Holders other
than certain noncorporate Holders who fail to supply an accurate taxpayer
identification number or who fail to report all interest and dividend income
required to be shown on their federal income tax returns.
PLAN OF DISTRIBUTION
Citicorp may offer and sell the Notes by any of three means of
distribution: (1) through agents, (2) through underwriters or dealers or (3)
directly to one or more purchasers. Such underwriters, dealers or agents may be
affiliates of Citicorp. The applicable Prospectus Supplement will set forth the
terms of the offering of the Notes to which such Prospectus Supplement relates,
including the name or names of any underwriters or agents with whom Citicorp has
entered into arrangements with respect to the sale of such Notes, the public
offering or purchase price of such Notes, the net proceeds to Citicorp from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any discounts and commissions allowed or paid to dealers, if any,
any commissions allowed or paid to agents, the initial public offering price and
any securities exchanges, if any, on which such Notes will be listed. Citicorp
may also issue Notes to one or more persons in exchange for outstanding
securities of Citicorp acquired by such persons from third parties in open
market transactions or in privately negotiated transactions. The newly issued
Notes in such cases may be offered pursuant to this Prospectus and the
applicable Prospectus Supplement by such persons, acting as a principal for
their own accounts, at market prices prevailing at the time of sale, at prices
otherwise negotiated or at fixed prices. Unless otherwise indicated in the
applicable Prospectus Supplement, Citicorp will receive only outstanding
securities and will not receive cash proceeds in connection with such exchanges
or resales. Dealer trading may take place in certain of the Notes, including
Notes not listed on any securities exchange.
The Notes may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through one
or more underwriters acting alone. The underwriter or underwriters with respect
to an underwritten offering of the Notes will be named in the applicable
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover page of such Prospectus Supplement. Unless otherwise indicated in the
applicable Prospectus Supplement, the obligations of the underwriters to
purchase the Notes will be subject to certain conditions precedent and each of
the underwriters with respect to a sale of Notes will be obligated to purchase
all of its Notes if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
Notes may be offered and sold by Citicorp directly or through agents
designated by Citicorp from time to time, which agents may be affiliates of
Citicorp. Any agent involved in the offer and sale of the Notes in respect of
which this Prospectus is being delivered will be named, and any commissions
payable by Citicorp to such agent will be set forth in or be calculable from,
the applicable Prospectus Supplement. Unless otherwise indicated in the
applicable
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Prospectus Supplement, any such agent will be acting on a reasonable
efforts basis for the period of its appointment (ordinarily five business days
or less).
Each underwriter and agent participating in the distribution of any Notes
of a series which are issuable in bearer form will agree that it will not offer,
sell or deliver, directly or indirectly, Notes of such series in bearer form, in
connection with the sale thereof during the restricted period, in the United
States or to United States persons other than the United States offices of
certain exempt distributors, certain international organizations, certain
foreign central banks, certain foreign branches of United States financial
institutions and certain United States persons who acquire such Notes through
foreign branches of United States financial institutions. See "Limitations on
Issuance of Euro-Notes".
If so indicated in the applicable Prospectus Supplement, Citicorp will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Notes from Citicorp pursuant to Delayed Delivery Contracts providing
for payment and delivery at a future date.
Any underwriter or agent participating in the distribution of the Notes may
be deemed to be an underwriter, as that term is defined in the Securities Act of
1933, as amended (the "Securities Act"), of the Notes so offered and sold and
any discounts or commissions received by them from Citicorp and any profit
realized by them on the sale or resale of the Notes may be deemed to be
underwriting discounts and commissions under the Securities Act.
Underwriters, agents and their controlling persons may be entitled, under
agreements entered into with Citicorp, to indemnification by Citicorp against
certain civil liabilities, including liabilities under the Securities Act.
This Prospectus and related Prospectus Supplements may be used by direct or
indirect wholly owned subsidiaries of Citicorp in connection with offers and
sales related to secondary market transactions in the Notes. Such subsidiaries
may act as principal or agent in such transactions. Such sales will be made at
prices related to prevailing market prices at the time of sale.
The participation of an affiliate or subsidiary of Citicorp in the offer
and sale of the Notes will comply with the requirements of Schedule E of the
By-laws of the National Association of Securities Dealers, Inc. (the "NASD")
regarding underwriting securities of an affiliate. No NASD member participating
in offers and sales of the Securities will execute a transaction in the Notes in
a discretionary account without the prior written specific approval of the
member's customer.
Underwriters, agents or their controlling persons may engage in
transactions with and perform services for Citicorp in the course of business.
See the accompanying Prospectus Supplement for further information
regarding the distribution of the Notes.
VALIDITY OF SECURITIES
The validity of the Notes will be passed upon for Citicorp by Stephen E.
Dietz, as an Associate General Counsel of Citibank, N.A., and for any
underwriters or agents by Sullivan & Cromwell, New York, New York. Certain
federal income tax matters will be passed upon for Citicorp by E. Noel Harwerth,
Esq., Chief Tax Officer of Citibank. Each of Mr. Dietz and Ms. Harwerth owns or
has the right to acquire a number of shares of Common Stock of Citicorp equal to
less than 0.01% of the outstanding Common Stock of Citicorp.
EXPERTS
The consolidated financial statements of Citicorp and subsidiaries included
in Citicorp's Annual Report and Form 10-K for 1993 have been incorporated herein
by reference in reliance upon the report set forth therein of KPMG Peat Marwick
LLP, independent certified public accountants, and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP
covering the December 31, 1993 financial statements refers to changes in
Citicorp's accounting practices for postretirement benefits and income taxes.
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