PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 22, 1996)
$200,000,000
CITICORP (LOGO)
7 1/4% SUBORDINATED NOTES DUE OCTOBER 15, 2011
----------
Interest on the Subordinated Notes is payable semiannually on April 15 and
October 15, commencing April 15, 1997. The Subordinated Notes will mature on
October 15, 2011 and will not be subject to redemption by Citicorp prior to
Maturity. See "Supplemental Description of Subordinated Notes".
The Subordinated Notes are unsecured and subordinated obligations of
Citicorp as described in the accompanying Prospectus under "Description of
Notes". 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 in the case of
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.
The Subordinated Notes will be represented by one or more Global Securities
registered in the name of The Depository Trust Company, as depositary, or its
nominee. Beneficial interests in the Global Securities will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described under "Supplemental
Description of Subordinated Notes--Book-Entry System", Subordinated Notes in
definitive form will not be issued. The Subordinated Notes will be issued only
in registered form in denominations of $1,000 and integral multiples thereof.
See "Supplemental Description of Subordinated Notes--Book-Entry System".
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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 SUPPLEMENT OR THE PROSPECTUS TO WHICH
IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------
THE SUBORDINATED 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.
================================================================================
Initial Public Underwriting Proceeds to
Offering Price (1) Discount (2) Citicorp (1)(3)
- --------------------------------------------------------------------------------
Per Subordinated Note .... 99.233% 0.750% 98.483%
- --------------------------------------------------------------------------------
Total .................... $198,466,000 $1,500,000 $196,966,000
================================================================================
(1) Plus accrued interest, if any, from October 18, 1996.
(2) Citicorp has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting".
(3) Before deduction of expenses payable by Citicorp.
----------
The Subordinated Notes offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that the Subordinated Notes will be ready for delivery in book-entry form only
through the facilities of The Depository Trust Company in New York, New York on
or about October 18, 1996, against payment therefor in immediately available
funds.
BEAR, STEARNS & CO. INC.
CITICORP SECURITIES, INC.
UBS SECURITIES
The date of this Prospectus Supplement is October 15, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SUBORDINATED
NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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 SUPPLEMENT
OR THE PROSPECTUS.
S-2
<PAGE>
SUPPLEMENTAL DESCRIPTION OF SUBORDINATED NOTES
GENERAL
The 7 1/4% Subordinated Notes due October 15, 2011 (the "Subordinated
Notes") offered hereby will be issued under the Indenture (the "Original
Indenture"), dated as of April 1, 1991, between Citicorp and The Chase Manhattan
Bank (formerly known as Chemical Bank), as Trustee, as supplemented by a First
Supplemental Indenture (the "First Supplemental Indenture"), dated as of
November 27, 1992, between Citicorp and the Trustee (the Original Indenture
together with the First Supplemental Indenture, the "Indenture"), referred to in
the accompanying Prospectus. Capitalized terms used and not defined herein shall
have the meanings assigned to them in the accompanying Prospectus and in the
Indenture.
The Subordinated Notes will constitute a single series for purposes of the
Indenture and will be limited to $200,000,000 aggregate principal amount. The
Subordinated Notes will mature on October 15, 2011 and interest will accrue from
October 18, 1996 at the rate per annum shown on the front cover of this
Prospectus Supplement, payable semiannually on April 15 and October 15 of each
year, commencing April 15, 1997, and at Maturity, to the Person in whose name
the Subordinated Note (or any predecessor Subordinated Note) is registered at
the close of business on the April 1 or October 1 next preceding such Interest
Payment Date. The Subordinated Notes will not be subject to any sinking fund or
provide for redemption at the option of Citicorp or the Holder prior to
Maturity. The Subordinated Notes will be issued in the form of one or more
permanent global notes registered in the name of The Depository Trust Company,
as depositary (the "Depositary"), or its nominee, located in the Borough of
Manhattan, The City of New York.
The provisions of the Indenture described under "Description of Notes --
Defeasance and Covenant Defeasance" in the accompanying Prospectus apply to the
Subordinated Notes.
For a description of the rights attaching to different series of
Subordinated Notes under the Indenture (including the Subordinated Notes), see
"Description of Notes" in the accompanying Prospectus.
BOOK-ENTRY SYSTEM
The Subordinated Notes will be issued in the form of one or more permanent
global securities (the "Global Securities"), which will be deposited with, or on
behalf of, the Depositary and will be registered in the name of the Depositary
or a nominee of the Depositary. Except as set forth below, the Subordinated
Notes will be available for purchase in denominations of $1,000 and integral
multiples thereof in book-entry form only.
Ownership of Subordinated Notes will be limited to institutions that have
accounts with such Depositary or its nominee ("participants") or persons that
may hold interests through participants. In addition, ownership of Subordinated
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 Subordinated 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 Subordinated Notes.
Citicorp has been advised by the Depositary that upon the issuance of the
Global Securities, and the deposit of such Global Securities 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
Subordinated Notes represented by the Global Securities to the accounts of
participants. The accounts to be credited shall be designated by the
Underwriters.
Payments of principal of and interest on the Subordinated Notes represented
by the Global Securities 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 Subordinated Notes represented by
the Global Securities. 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
S-3
<PAGE>
payments of principal, the Global Securities 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 Trustee or any agent of
Citicorp or the 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 beneficial ownership interests in the Subordinated Notes
represented by the Global Securities or for maintaining, supervising or
reviewing any of the Depositary's records or any participant's records relating
to such beneficial ownership interests.
Citicorp has been advised by the Depositary that upon receipt of any
payment of principal of or interest in respect of the Global Securities, 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 Subordinated Notes represented by the Global
Securities as shown on the records of the Depositary. Payments by participants
to owners of the Subordinated 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.
The Global Securities may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
another nominee of the Depositary.
Subordinated Notes represented by the Global Securities are exchangeable
for definitive Subordinated 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 the Global
Securities 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 Subordinated
Notes shall be exchangeable for definitive Subordinated 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 the
Subordinated Notes. If the Global Securities become exchangeable pursuant to the
preceding sentence, they shall be exchangeable in whole for definitive
Subordinated Notes in registered form, of like tenor and of an equal aggregate
principal amount, in denominations of $1,000 and integral multiples thereof and
may be presented for registration of transfer or exchange at the offices of
Citibank in the Borough of Manhattan, The City of New York. Such definitive
Subordinated 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 Subordinated Notes.
Except as provided above, owners of Subordinated Notes will not be entitled
to receive physical delivery of Subordinated Notes in definitive form and will
not be considered the Holders thereof for any purpose under the Indenture, and
the Global Securities shall not be exchangeable, except for another Global
Security of like denomination and tenor to be registered in the name of the
Depositary or its nominee. Accordingly, each person owning a Subordinated 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 Indenture. The
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 Indenture. Citicorp understands that under
existing industry practices, in the event that Citicorp requests any action of
Holders or an owner of a Subordinated 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 Subordinated 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 Underwriters), banks,
trust companies, clearing
S-4
<PAGE>
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.
Settlement for the Subordinated Notes will be made in same day funds. All
payments of principal and interest will be made by Citicorp in same day funds.
The Subordinated Notes will trade in the Same-Day Funds Settlement System of the
Depositary until Maturity, and secondary market trading activity for the
Subordinated Notes will therefore settle in same day funds.
S-5
<PAGE>
SUMMARY FINANCIAL DATA
The following table sets forth, in summary form, certain financial data for
each of the years in the three-year period ended December 31, 1995 and for the
nine months ended September 30, 1996 and September 30, 1995. This summary is
qualified in its entirety by the detailed information and financial statements
included in the documents incorporated by reference; this summary is not covered
by the Report of Independent Auditors incorporated herein by reference. See
"Incorporation of Certain Documents by Reference" in the Prospectus. The
consolidated financial data at and for the nine months ended September 30, 1996
and September 30, 1995 is derived from unaudited financial statements. The
results for the nine months ended September 30, 1996 are not necessarily
indicative of the results for the full year or any other interim period.
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
-------------------- ---------------------------------
1996 1995 1995 1994 1993
------- ------- ------- ------- -------
(unaudited)
(In millions, except per share amounts)
<S> <C> <C> <C> <C> <C>
Net Interest Revenue ....................................... $ 8,122 $ 7,391 $ 9,951 $ 8,911 $ 7,690
Fees, Commissions and Other Revenue ........................ 6,709 6,498 8,727 7,837 8,385
------- ------- ------- ------- -------
Total Revenue .......................................... 14,831 13,889 18,678 16,748 16,075
Provision for Credit Losses ................................ 1,422 1,460 1,991 1,881 2,600
Operating Expense .......................................... 8,916 8,284 11,102 10,256 10,615
------- ------- ------- ------- -------
Income Before Taxes and Cumulative Effects of
Accounting Changes ....................................... 4,493 4,145 5,585 4,611 2,860
Income Taxes ............................................... 1,692 1,586 2,121 1,189 941
------- ------- ------- ------- -------
Income Before Cumulative Effects of
Accounting Changes ....................................... 2,801 2,559 3,464 3,422 1,919
Cumulative Effects of Accounting Changes(A) ................ -- -- -- (56) 300
------- ------- ------- ------- -------
Net Income ................................................. $ 2,801 $ 2,559 $ 3,464 $ 3,366 $ 2,219
======= ======= ======= ======= =======
Income Applicable to Common Stock .......................... $ 2,682 $ 2,290 $ 3,126 $ 3,010 $ 1,900
======= ======= ======= ======= =======
Earnings Per Share(B):
On Common and Common Equivalent Shares:
Income Before Cumulative Effects of
Accounting Changes ................................... $ 5.53 $ 5.29 $ 7.21 $ 7.15 $ 3.82
Cumulative Effects of Accounting Changes(A) ............ -- -- -- (.12) .68
------- ------- ------- ------- -------
Net Income ............................................. $ 5.53 $ 5.29 $ 7.21 $ 7.03 $ 4.50
======= ======= ======= ======= =======
Assuming Full Dilution:
Income Before Cumulative Effects of
Accounting Changes ................................... $ 5.45 $ 4.72 $ 6.48 $ 6.40 $ 3.53
Cumulative Effects of Accounting Changes(A) ............ -- -- -- (.11) .58
------- ------- ------- ------- -------
Net Income ............................................. $ 5.45 $ 4.72 $ 6.48 $ 6.29 $ 4.11
======= ======= ======= ======= =======
(In billions)
Period-End Balances:
Total Loans, Net(C) ...................................... $ 169.1 $ 160.7 $ 165.6 $152.4 $ 139.0
Total Assets(D) .......................................... 271.9 257.5 256.9 250.5 216.6
Total Deposits ........................................... 179.3 163.8 167.1 155.7 145.1
Long-Term Debt and Subordinated Capital Notes ............ 19.3 19.0 18.5 17.9 18.2
Total Stockholders' Equity(E) ............................ 20.4 19.5 19.6 17.8 14.0
</TABLE>
- -----------
(A) Refers to the adoption of SFAS No. 112, "Employers' Accounting for
Postemployment Benefits", effective January 1, 1994 and SFAS No. 109,
"Accounting for Income Taxes", effective January 1, 1993.
(B) Based on net income after deducting preferred stock dividends, except where
conversion is assumed, and, unless anti-dilutive, the after-tax dividend
equivalents on shares issuable under Citicorp's Executive Incentive
Compensation Plan.
(C) Net of unearned income.
(D) Reflects the adoption of FASB Interpretation No. 39, "Offsetting of Amounts
Related to Certain Contracts", effective January 1, 1994.
(E) Reflects the adoption of SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities", effective January 1, 1994.
S-6
<PAGE>
RATIOS OF INCOME TO FIXED CHARGES
For the fiscal years ended December 31, 1995, 1994, 1993, 1992 and 1991 and
the nine months ended September 30, 1996, Citicorp's consolidated ratios of
income to fixed charges, computed as set forth below, were as follows:
<TABLE>
<CAPTION>
Nine months Year ended December 31,
ended --------------------------------------------
September 30, 1996 1995 1994 1993 1992 1991
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income to Fixed Charges:
Excluding Interest on Deposits .... 2.65 2.31 1.76 1.44 1.24 0.96
Including Interest on Deposits .... 1.48 1.42 1.31 1.18 1.09 0.99
</TABLE>
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 (or net loss), before
extraordinary items 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.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, Citicorp has agreed to sell to each of the Underwriters named below,
and each of the Underwriters has severally agreed to purchase, the principal
amount of the Subordinated Notes set forth opposite its name below.
Principal
Amount of
Subordinated
Underwriter Notes
----------- ------------
Bear, Stearns & Co. Inc. ................ $ 68,000,000
Citicorp Securities, Inc. ............... 66,000,000
UBS Securities LLC ...................... 66,000,000
------------
Total ............................. $200,000,000
============
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Subordinated Notes, if
any are taken.
Citicorp has been advised by the Underwriters that the several Underwriters
propose initially to offer the Subordinated Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus Supplement and to certain securities dealers, including any
Underwriter, at such public offering price less a concession not in excess of
0.45% of the principal amount of the Subordinated Notes. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of 0.25% of the
principal amount of the Subordinated Notes to certain brokers and dealers. After
the initial public offering of the Subordinated Notes, the public offering price
and other selling terms may from time to time be varied by the Underwriters.
The Subordinated Notes are a new issue of securities with no established
trading market. Citicorp has been advised by the Underwriters that they intend
to make a market in the Subordinated Notes, but are not obligated to do so and
may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Subordinated Notes.
Citicorp has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
This Prospectus Supplement and Prospectus may be used by Citicorp
Securities, Inc., a wholly owned subsidiary of Citicorp, in connection with
offers and sales related to secondary market transactions in the Subordinated
Notes. Citicorp Securities, Inc. 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 Citicorp Securities, Inc. in offers and sales of the
Subordinated Notes will comply with the requirements of Rule 2720 of the Bylaws
of the National Association of Securities Dealers, Inc. (the "NASD") regarding
underwriting securities of an affiliate.
S-7
<PAGE>
Each NASD member participating in offers and sales of the Subordinated
Notes will not execute a transaction in the Subordinated Notes in a
discretionary account without the prior written specific approval of the
member's customer.
The Underwriters each engage in transactions with and perform services for
Citicorp in the ordinary course of business.
VALIDITY OF SUBORDINATED NOTES
The validity of the Subordinated Notes will be passed upon for Citicorp by
Stephen E. Dietz, Associate General Counsel of Citibank, N.A., and for the
Underwriters by Sullivan & Cromwell, New York, New York. Mr. Dietz owns or has
the right to acquire a number of shares of common stock of Citicorp equal to
less than .01% of the outstanding common stock of Citicorp.
S-8
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS 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 DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
----
Supplemental Description of Subordinated Notes ....................... S-3
Summary Financial Data ............................................... S-6
Ratios of Income to Fixed Charges .................................... S-7
Underwriting ......................................................... S-7
Validity of Subordinated Notes ....................................... S-8
PROSPECTUS
Available Information ................................................ 3
Incorporation of Certain Documents by Reference ...................... 3
Citicorp ............................................................. 3
Use of Proceeds ...................................................... 4
Description of Notes ................................................. 4
Foreign Currency Risks ............................................... 16
Plan of Distribution ................................................. 16
Validity of Securities ............................................... 17
Experts .............................................................. 17
----------------------------------
$200,000,000
CITICORP (LOGO)
7 1/4% SUBORDINATED NOTES
DUE OCTOBER 15, 2011
----------
PROSPECTUS SUPPLEMENT
----------
BEAR, STEARNS & CO. INC.
CITICORP SECURITIES, INC.
UBS SECURITIES
October 15, 1996
================================================================================
