PROSPECTUS SUPPLEMENT
(To Prospectus Dated August 27, 1997)
$1,000,000,000
CITICORP [LOGO]
Medium-Term Senior Notes, Series E
Global Medium-Term Subordinated Notes, Series E
Due from 9 Months to 50 Years from Date of Issue
Citicorp is offering hereby from time to time its Medium-Term Senior
Notes, Series E (the "Senior Notes") and its Medium-Term Subordinated Notes,
Series E (the "Subordinated Notes", and together with the Senior Notes, the
"Notes"). The Notes are offered in an aggregate principal amount of up to
$1,000,000,000. Each Note will mature from 9 months to 50 years from its date of
original issuance (each an "Issue Date"), as selected by the initial purchaser
and agreed to by Citicorp.
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. 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.
<TABLE>
<CAPTION>
=====================================================================================================
Price to Agents' Commissions Proceeds to
Public (1) or Discounts (2) Company (2) (3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note ............. 100% .125%-3.00% 99.80%-97.00%
- -----------------------------------------------------------------------------------------------------
Total (4)............. $1,000,000,000 $2,000,000-$30,000,000 $988,000,000-$970,000,000
=====================================================================================================
</TABLE>
1. Unless otherwise indicated in a pricing supplement, Notes will be issued
at 100% of their principal amount.
2. Citicorp will pay Smith Barney Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.W. Korth & Company, as agents, and such other agents as
may be named from time to time (the "Agents"), a commission (or grant a
discount) ranging from 0.20% to 3.00% 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.
----------------------
Smith Barney Inc. Merrill Lynch & Co.
J.W. Korth & Company
----------------------
The date of this Prospectus Supplement is August 27, 1997.
<PAGE>
(Continued from cover page)
The Notes will be issued in fully registered form in denominations of
$1,000 and integral multiples of $1,000 in excess thereof, unless otherwise
provided in the accompanying Supplement to this Prospectus Supplement (a"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, or a
nominee of the Depositary. Ownership of Notes will be evidenced only by, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described under "Description of
Notes--Book-Entry System", owners of 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 holder
thereof.
The interest rate or interest rate index, if any, the maximum interest
rate, if any, the minimum interest rate, if any, 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 each Note and its compensation will be established by Citicorp at the
time of issuance of such Note and will be indicated in a Pricing Supplement. The
Notes, except Zero-Coupon Notes, will bear interest at a fixed rate or a rate or
rates determined by reference to an interest rate index or formula, as indicated
in the applicable Pricing Supplement. Zero-Coupon Notes will be issued at a
discount from the principal amount payable at Maturity thereof, and will not
bear interest prior to Maturity.
Unless otherwise indicated in the applicable Pricing Supplement, interest
on the Notes will be payable monthly on the 15th day of each month and at
Maturity.
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". 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 may be offered on a continuous basis by Citicorp through the
Agents, each of which has agreed or will agree to use 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". This
Prospectus Supplement and Prospectus may be used by Citicorp Securities, Inc., a
wholly owned subsidiary of Citicorp, acting as principal or agent, in connection
with offers and sales related to secondary market transactions in the Notes.
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.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT COVERING TRANSACTIONS
AND PENALTY BIDS. SEE "PLAN OF DISTRIBUTION OF NOTES" HEREIN.
S-2
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
Page
Summary Financial Data................................................... S-4
Description of Notes..................................................... S-5
General.............................................................. S-5
Interest............................................................. S-6
Fixed Rate Notes..................................................... S-7
Floating Rate Notes.................................................. S-7
Book-Entry System.................................................... S-8
United States Taxation................................................... S-9
Payments of Interest................................................... S-9
Original Issue Discount................................................ S-9
Notes Purchased at a Premium........................................... S-11
Purchase, Sale and Retirement of Notes................................. S-11
Backup Withholding and Information Reporting........................... S-12
Plan of Distribution of Notes............................................ S-12
Validity of the Notes.................................................... S-13
Prospectus Supplement Glossary........................................... S-14
Prospectus
Available Information.................................................... 3
Incorporation of Certain Documents by Reference.......................... 3
Citicorp................................................................. 3
Holding Company........................................................ 4
Use of Proceeds.......................................................... 4
Ratios of Income to Fixed Charges........................................ 5
Description of Notes..................................................... 5
General................................................................ 5
Form, Exchange, Registration and Transfer.............................. 7
Payment and Paying Agents.............................................. 9
Temporary Global Notes................................................. 10
Permanent Global Notes................................................. 11
Limitations on Liens on Stock of Citibank.............................. 11
Defaults; Events of Default............................................ 11
Meetings, Modification and Waiver...................................... 13
Consolidation, Merger and Sale of Assets............................... 14
Assumption of Obligations.............................................. 14
Notices................................................................ 15
Title.................................................................. 15
Replacement of Notes and Coupons....................................... 15
Defeasance and Covenant Defeasance..................................... 15
Subordination.......................................................... 16
Governing Law.......................................................... 17
Concerning the Trustees................................................ 17
Limitations on Issuance of Euro-Notes.................................. 17
Foreign Currency Risks................................................... 19
General................................................................ 19
Exchange Rates and Exchange Controls................................... 19
Plan of Distribution..................................................... 20
Validity of Securities................................................... 21
Experts.................................................................. 21
S-3
<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, 1996 and for
the six months ended June 30, 1997 and June 30, 1996. 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 this Prospectus Supplement.
The consolidated financial data at and for the six months ended June 30, 1997
and June 30, 1996 is derived from unaudited financial statements. The results
for the six months ended June 30, 1997 are not necessarily indicative of the
results for the full year or any other interim period.
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
1997 1996 1996 1995 1994
(In Millions, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Consolidated Summary of Financial Results
Net Interest Revenue ...................... $ 5,667 $ 5,413 $ 10,940 $ 9,951 $ 8,911
Fees, Commissions and Other Revenue ....... 4,840 4,408 9,256 8,727 7,837
Total Revenue ............................ $ 10,507 $ 9,821 $ 20,196 $ 18,678 $ 16,748
Provision for Credit Losses ............... 935 973 1,926 1,991 1,881
Operating Expense ......................... 6,342 5,838 12,197 11,102 10,256
Income Before Taxes and
Cumulative Effects of Accounting Changes . $ 3,230 $ 3,010 $ 6,073 $ 5,585 $ 4,611
Income Taxes .............................. 1,211 1,144 2,285 2,121 1,189
Income Before Cumulative
Effects of Accounting Changes ............ $ 2,019 $ 1,866 $ 3,788 $ 3,464 $ 3,422
Cumulative Effects of Accounting Changes(A) -- -- -- -- (56)
Net Income ................................ $ 2,019 $ 1,866 $ 3,788 $ 3,464 $ 3,366
Income Applicable to Common Stock ......... $ 1,947 $ 1,785 $ 3,631 $ 3,126 $ 3,010
Dividends Declared Per Common Share ....... 1.05 .90 1.80 1.20 .45
Earnings Per Share (B)
On Common and Common Equivalent Shares
Income Before Cumulative
Effects of Accounting Changes ............. $ 4.11 $ 3.68 $ 7.50 $ 7.21 $ 7.15
Cumulative Effects of Accounting Changes(A) -- -- -- -- (.12)
Net Income ................................ $ 4.11 $ 3.68 $ 7.50 $ 7.21 $ 7.03
Assuming Full Dilution
Income Before Cumulative
Effects of Accounting Changes ............ $ 4.11 $ 3.61 $ 7.42 $ 6.48 $ 6.40
Cumulative Effects of Accounting Changes(A) -- -- -- -- (.11)
Net Income ................................ $ 4.11 $ 3.61 $ 7.42 $ 6.48 $ 6.29
Period End Balances (In Billions)
Total Loans, Net of Unearned Income and
Allowance for Credit Losses ............. $ 173.1 $ 162.4 $ 169.1 $ 160.3 $ 147.3
Total Assets(C) ........................... 304.3 266.8 281.0 256.9 250.5
Total Deposits ............................ 198.7 175.8 185.0 167.1 155.7
Debt(D) ................................... 19.7 19.5 18.9 18.5 17.9
Total Stockholders' Equity(E) ............. 21.4 19.9 20.7 19.6 17.8
</TABLE>
(A) Refers to the adoption of SFAS No. 112, "Employers' Accounting for
Postemployment Benefits", effective January 1, 1994.
(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) Reflects the adoption of FASB Interpretation No. 39, "Offsetting of
Amounts Related to Certain Contracts", effective January 1, 1994.
(D) Includes long-term debt, subordinated capital notes and redeemable
preferred stock.
(E) Reflects the adoption of SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities", effective January 1, 1994.
S-4
<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 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"). As of the date of this Prospectus Supplement, the principal
office of the Senior Trustee is located at 114 West 47th Street, New York, New
York 10036. The Subordinated Notes offered hereby will be issued under the
Indenture, dated as of April 1, 1991, between Citicorp and The Chase Manhattan
Bank (formerly known as Chemical Bank), as Trustee (the "Subordinated Trustee"
and, together with the Senior Trustee, the "Trustees"), as supplemented by the
First Supplemental Indenture dated as of November 27, 1992 and the Second
Supplemental Indenture dated as of December 17, 1996, each between Citicorp and
the Subordinated Trustee (such Indenture, together with such First Supplemental
Indenture, Second 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"). As of the date of this Prospectus Supplement, the
principal office of the Subordinated Trustee is located at 450 West 33rd Street,
New York, New York 10001. Each of the Senior Notes and the Subordinated Notes
constitute a single series for purposes of the applicable Indenture and are
limited to an aggregate principal amount of up to $1,000,000,000, subject to
reduction 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" below. The foregoing limit, however, may be increased by Citicorp if in
the future it determines that it may wish to sell additional Notes.
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.
Each Note will mature from 9 months to 50 years from its Issue Date, as
selected by the initial purchaser and agreed to by Citicorp.
The Notes will be issuable only in fully registered form and, unless
otherwise provided in the applicable Pricing Supplement, will be issuable only
in denominations of $1,000 and integral multiples of $1,000 in excess thereof.
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" herein. A "Zero-Coupon Note" means a Note that does not bear interest
prior to Maturity.
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. 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 and the face amount of the
Indexed Note, certain additional tax considerations, and the manner of
calculation of the principal amount or interest payable if the specified index
is no longer calculated or published will be described in the applicable Pricing
Supplement.
The "Stated Maturity" of an Issue of Notes shall be the date specified in
the applicable Pricing Supplement as the
S-5
<PAGE>
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.
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 System" below and in the
accompanying Prospectus under the caption "Description of Notes--Payment and
Paying Agents".
The Notes may be presented for registration of transfer or exchange at the
offices of Citibank, N.A. ("Citibank") in the Borough of Manhattan, The City of
New York.
The provisions of the Indentures described under "Description of
Notes--Defeasance and Covenant Defeasance" in the accompanying Prospectus apply
to the Notes. For a summary description of the various rights attaching to the
series of Notes under the applicable Indenture, see "Description of Notes" in
the accompanying Prospectus.
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 terms and provisions
of such obligation.
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 or formula 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 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 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 (as defined below) and/or
multiplying by the Spread Multiplier (as defined below), unless otherwise
indicated in the applicable Pricing Supplement. Holders of Zero-Coupon Notes
will receive no periodic payments of interest.
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 current 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 $2,500,000 or more has been invested.
S-6
<PAGE>
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 the 15th day of each month (each an "Interest
Payment Date") and at Maturity and the Regular Record Dates for Fixed Rate Notes
will be the first day of each month. Unless otherwise indicated in the
applicable Pricing Supplement, interest payments for Fixed Rate Notes will 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, 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.
"Market Day" means any day that is not (a) a Saturday or Sunday, (b) a day on
which banking institutions in The City of New York are authorized or obligated
by law or executive order to close or (c) any other day specified in the
applicable Pricing Supplement.
Floating Rate Notes
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate index or formula and will also specify the Spread
and/or Spread Multiplier, if any, and the maximum or minimum interest rate
limitation, if any, applicable to such Note. "Spread" means the number of basis
points 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 specified in the applicable Pricing Supplement as being
applicable to the interest rate for a particular Floating Rate Note. In
addition, such Pricing Supplement will state for each Floating Rate Note the
following terms, if applicable: Calculation Dates; Initial Interest Rate; Index
Maturity; Interest Determination Dates and Interest Reset Dates (each as defined
below), as well as the applicable Interest Payment Dates and the Regular Record
Dates. "Calculation Date", where applicable, means the date on which the
Calculation Agent is to calculate the interest rate for a Floating Rate Note.
"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 or
formula is based.
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; provided, however,
that the interest rate in effect from the Issue Date of a Floating Rate Note (or
any predecessor Note) to the first Interest Reset Date will be the Initial
Interest Rate and 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 such 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 will be the next succeeding Market Day. "Initial
Interest Rate" means the rate at which a Floating Rate Note will bear interest
from its Issue Date to the first Interest Reset Date. "Interest Determination
Date" means the date as of which the rate of interest in effect on an Interest
Reset Date will be determined.
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 and (b) a minimum numerical interest
rate limitation, or floor, on the rate of interest which may accrue during any
interest period.
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. Unless
otherwise specified in the related Pricing Supplement, the "Regular Record Date"
with respect to Floating Rate Notes will be the date 15 calendar days prior to
each Interest Payment Date, whether or not such date shall be a Market Day.
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, in the case of
Floating Rate Notes whose interest rate is indexed to U.S. Treasury securities,
the actual number of days in the year).
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).
S-7
<PAGE>
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.
Book-Entry System
Upon issuance, all Notes of like tenor and having the same Issue Date will
be represented by one or more permanent global securities (the "Global
Securities"). Each Global Security will be deposited with, or on behalf of, The
Depository Trust Company, as Depositary (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.
Ownership of 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 Notes by participants
will be evidenced only 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 Notes by persons that hold through participants
will be evidenced only 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 Notes.
Citicorp has been advised by the Depositary that upon the issuance of a
Global Security, and the deposit of such Global Security 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 Notes
represented by such Global Security 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 Notes represented
by a Global Security 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 Security representing such
Notes. Such payments to the Depositary or its nominee 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 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 Trustees,
any agent of Citicorp or any agent of the Trustees 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 Notes represented by Global Securities or for maintaining,
supervising or reviewing any of the Depositary's records or any participant's
records relating to such 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
Security, 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 Security as shown on the records of the Depositary. Payments by
participants to owners of 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 Security may 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.
Notes represented by a Global Security 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 Security 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 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 Security representing 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 an equal aggregate
principal amount, in denominations of $1,000 and integral multiples of $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
Notes.
Except as provided above, owners of Notes will not be entitled to receive
physical delivery of Notes in definitive form and will not be considered the
holders thereof for any purpose under the applicable Indenture, and no Global
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Security representing Notes shall 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 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 that Indenture. Citicorp understands that
under existing industry practices, in the event that Citicorp requests any
action of holders or an owner of a Note desires to give or take any action a
holder is entitled to give or take under an Indenture, the Depositary would
authorize the participants owning the relevant 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, 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.
UNITED STATES TAXATION
The following is a summary of the principal United States federal income
tax consequences of the ownership and disposition of Notes by United States
Holders (as defined below). 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, persons whose functional
currency is not the U.S. dollar or persons that are not United States Holders.
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
"regulations"). 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. In addition, any special United States tax consequences of
Indexed Notes or Notes providing for payments denominated in or determined by
reference to foreign currency 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.
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
subdivision thereof, or (iii) a person otherwise subject to United States
federal income taxation on a net income basis in respect of a Note.
Payments of Interest
Interest on a Note, 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.
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
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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", an allocable portion of which must be included in a United States
Holder's income as principal payments are made on the Note. 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 is
determined by allocating to each day in any "accrual period" a pro rata portion
of the OID allocable to such 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 an election to treat all interest as OID is permitted to
reduce the daily portions of OID proportionately over the life of the Note.
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 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 Internal
Revenue Service (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.
Notes Subject to Contingencies Including Optional Redemption. If a Note
provides for an alternative payment schedule or schedules applicable upon the
occurrence of a contingency or contingencies (other than a remote or incidental
contingency), whether such contingency relates to payments of interest or of
principal, if the timing and amount of the payments that comprise each payment
schedule are known as of the Issue Date and if one of such schedules is
significantly more likely than not to occur, the yield and maturity of the Note
are determined by assuming that the payments will be made according to that
payment schedule. If there is no single payment schedule that is significantly
more likely than not to occur (other than because of a mandatory sinking fund),
the Note will be subject to the general rules that govern contingent payment
obligations. These rules will be discussed in an applicable Pricing Supplement.
Notwithstanding the general rules for determining yield and maturity in
the case of Notes subject to contingencies, if Citicorp has a 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.
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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.
Variable Rate Notes. In general, a Note is a "variable rate Note" if (i)
the Note's issue price does not exceed the total noncontingent principal
payments on the Note by more than a specified amount and (ii) the Note provides
for stated interest payments that are unconditionally payable at least annually
at one or more qualifying variable rates. It is expected that Floating Rate
Notes will generally qualify as variable rate Notes; the United States federal
income tax consequences of any Floating Rate Note that does not qualify as a
variable rate Note will be discussed in the applicable Pricing Supplement.
In general, if a variable rate Note provides for stated interest at a
single qualifying variable rate, all interest on the Note is qualified stated
interest and the amount of OID on the Note is calculated using the value of the
rate on the issue date (if the variable rate reflects or inversely reflects
contemporaneous variations in the cost of newly borrowed funds and meets certain
other requirements) or the yield reasonably expected for the Note (if the
variable rate is determined by reference to objective financial or economic
information not within the control of or unique to the circumstances of the
issuer or a related party). If the variable rate Note does not provide for
stated interest at a single qualifying variable rate, interest and OID accruals
are generally calculated by constructing an equivalent fixed rate Note (using
for each variable rate, depending on its type, the value of the rate as of the
issue date or a rate reflecting the expected yield on the Note). For this
purpose, a variable rate Note that provides for a fixed interest rate during any
period is treated as if it provided instead for a variable rate; the substitute
variable rate must be such that it would not, upon replacing the fixed rate,
change the fair market value of the Note.
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). Accrued
basis United States Holders and certain other United States Holders are required
to accrue OID on short-term Notes on either a straight-line basis or under the
constant-yield method (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, and 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.
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. 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.
Purchase, Sale and Retirement of Notes
A United States Holder's tax basis in a Note will be its costs 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. 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 (less any accrued but unpaid interest, which will be
taxable as such) and the tax basis in the Note. Except to the extent described
under "Original Issue Discount--Short-Term Notes" or "Original Issue
Discount--Market Discount", such gain or loss. Long-term capital gain of an
individual United States Holder is generally subject to a maximum tax rate of
28% for property held for more than one year. The maximum rate is reduced to 20%
in the case of property held for more than 18 months.
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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%.
Payments of the proceeds for the sale of a Note to or through a broker are
generally subject to information reporting and backup withholding. However,
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 OF NOTES
The Agents will be Smith Barney Inc., Merrill Lynch & Co., Merrill Lynch,
Pierce Fenner & Smith Incorporated and J.W. Korth & Company ("the Agents") and
any other Agent designated in the applicable Pricing Supplement. Under the terms
of the amended and restated selling agent agreement dated as of August 7, 1995,
as amended (the "Selling Agent Agreement") between Citicorp and the Agents named
above, 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 ranging from
0.20% to 3.00% 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
substantially 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. Unless otherwise specified in the applicable
Pricing Supplement, any Note purchased by an Agent as principal shall be
purchased at a price equal to 100% of the principal amount thereof less an
amount equal to the commission payable on an agency sale of a Note having an
identical Stated Maturity. Agents acting as principals 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 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.
Unless otherwise indicated in the applicable Pricing Supplement, payment
of the purchase price of Notes will be required to be made in funds immediately
available in The City of New York.
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 sale or
resale of the Notes may be deemed to be underwriting discounts and commissions
under the Act. Citicorp has agreed or will agree to indemnify the Agents against
and contribute toward certain liabilities, including liabilities under the Act,
and to reimburse the Agents for certain expenses.
The participation of an affiliate or subsidiary of Citicorp in the offer
and sale of the Notes will comply with the requirements of Rule 2720 of the
Conduct Rules 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.
The Agents may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the underlying Notes so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Notes in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Agents to reclaim a selling concession from a syndicate
member when the Notes originally sold by such syndicate member are purchased in
a syndicate covering transaction to cover syndicate short positions. Such
stabilizing transactions, syndicate covering transactions and penalty bids may
cause the price of the Notes to be higher than it would otherwise be in the
absence of such transactions. These transactions, if commenced, may be
discontinued at any time.
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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 SUPPLEMENT GLOSSARY
Term Page
accrued OID......................................................... S-10
Act................................................................. S-12
acquisition premium................................................. S-10
Agents.............................................................. S-1, S-12
Calculation Agent................................................... S-8
Calculation Date.................................................... S-7
change in circumstances............................................. S-11
Citibank............................................................ S-6
CSI................................................................. S-12
Code................................................................ S-9
de minimis amount................................................... S-10
Depositary.......................................................... S-8
discount Notes...................................................... S-10
Exchange Act........................................................ S-8
Fixed Rate Note..................................................... S-6
Floating Rate Note.................................................. S-6
Global Securities................................................... S-8
Indenture........................................................... S-5
Index Maturity...................................................... S-7
Indexed Notes....................................................... S-2
Initial Interest Rate............................................... S-7
Interest Determination Date......................................... S-7
Interest Payment Date............................................... S-7
Interest Period..................................................... S-6
Interest Reset Date................................................. S-7
Issue Date.......................................................... S-1
Market Day.......................................................... S-7
market discount Note................................................ S-10
Maturity............................................................ S-6
Notes............................................................... S-1
OID................................................................. S-9
Original Issue Discount Note........................................ S-5
participants........................................................ S-8
Pricing Supplement.................................................. S-2
qualified stated interest........................................... S-9
Regular Record Date................................................. S-7
regulations......................................................... S-9
Selling Agent Agreement............................................. S-12
Senior Indenture.................................................... S-5
Senior Notes........................................................ S-1
Senior Trustee...................................................... S-5
Service............................................................. S-10
Short term note..................................................... S-9
Spread.............................................................. S-7
Spread Multiplier................................................... S-7
Stated Maturity..................................................... S-5
Subordinated Indenture.............................................. S-5
Subordinated Notes.................................................. S-1
Subordinated Trustee................................................ S-5
Trustees............................................................ S-5
United States Holder................................................ S-9
variable rate Note.................................................. S-10
Zero-Coupon Note.................................................... S-5
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<PAGE>
PROSPECTUS
CITICORP [LOGO]
Senior Notes
Subordinated Notes
This Prospectus may be used in connection with the offering of Citicorp's
unsecured debt securities, which may be either senior (the "Senior Notes") or
subordinated (the "Subordinated Notes" and, together with the Senior Notes, the
"Notes"). 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 one or more supplements to this Prospectus (collectively, the "Prospectus
Supplement"). Pursuant to the terms of the Registration Statement of which this
Prospectus forms a part, Citicorp's preferred stock, common stock and other
securities may also be offered under the 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 Senior Indebtedness (as defined herein).
See "Description of Notes."
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 date of this Prospectus is August 27, 1997
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The specific terms of each series of Notes offered pursuant to this
Prospectus will be set forth in the applicable Prospectus Supplement, which will
identify any underwriters or agents for the Notes being offered thereby and
their compensation, and the public offering or purchase price.
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 or conversion at the option
of Citicorp or the holder, the currency or composite currency, if not the U.S.
dollar, in which the Notes are denominated, and any mandatory or optional
sinking fund or analogous provisions.
The 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.
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.
If any agent or 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. See "Plan of
Distribution" for possible indemnification arrangements for agents, underwriters
and their controlling persons.
This Prospectus and related Prospectus Supplements may be used by direct
or indirect 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 a
Prospectus Supplement is also delivered. The delivery of this Prospectus
together with a Prospectus Supplement relating to particular Notes shall not
constitute an offer in any 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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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, proxy statements and other information with the
Commission. Reports, proxy statements and other information concerning Citicorp
can be inspected and copied at prescribed rates at the Commission's Public
Reference Room, Judiciary Plaza, 450 Fifth Street, Northwest, Washington, D.C.
20549, as well as the following Regional Offices of the Commission: 7 World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material may be obtained by mail
from the Commission's Public Reference Section at prescribed rates. If
available, such reports and other information may also be accessed through the
Commission's electronic data gathering, analysis and retrieval system ("EDGAR")
via electronic means, including the Commission's web site on the Internet
(http://www.sec.gov). Such reports, proxy statements and other information may
also be inspected at the offices of the New York Stock Exchange, the American
Stock Exchange, the Chicago Stock Exchange and the Pacific Stock Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Citicorp pursuant to
Section 13 of the Exchange Act 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,
1996;
(2) Financial Reviews and Forms 10-Q for the quarters ended March 31, 1997
and June 30, 1997; and
(3) Current Reports on Form 8-K dated January 21, 1997, April 15, 1997 and
July 15, 1997.
All reports subsequently filed by Citicorp pursuant to Sections 13(a) and
(c) of the Exchange Act, 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 securities offered hereby (the "Securities") 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 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.
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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. 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. 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.
Citicorp also derives dividends from its non-bank subsidiaries. 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 that policy, Citicorp may be required to commit resources to its
subsidiary banks in circumstances where it might not otherwise do so.
Because Citicorp is a holding company, its rights and the rights of its
creditors and stockholders, including the holders of the Securities, 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 Securities
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 raised 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.
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RATIOS OF INCOME TO FIXED CHARGES
For the six months ended June 30, 1997 and fiscal years ended December 31,
1996, 1995, 1994, 1993 and 1992, Citicorp's consolidated ratios of income to
fixed charges, computed as set forth below, were as follows:
<TABLE>
<CAPTION>
Six
Months
Ended
June 30, Year Ended December 31,
-------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993 1992
Income to Fixed Charges:
Excluding Interest on Deposits 2.84 2.69 2.31 1.76 1.44 1.24
Including Interest on Deposits 1.50 1.48 1.42 1.31 1.18 1.09
</TABLE>
For purposes of computing the consolidated ratio of income to fixed
charges, income represents net income, 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.
DESCRIPTION OF NOTES
General
The Senior Notes offered hereby are to be issued under an indenture dated
as of September 1, 1989, as amended (the "Senior Indenture"), between Citicorp
and United States Trust Company of New York, as trustee (the "Senior Trustee").
The Subordinated Notes offered hereby are to be issued under an indenture
dated as of April 1, 1991, as amended (the "Subordinated Indenture"), between
Citicorp and The Chase Manhattan Bank (formerly known as Chemical Bank), as
trustee (the "Subordinated Trustee" and, together with the Senior Trustee, the
"Trustees"). As of November 27, 1992, the Subordinated Indenture as in effect
prior to that date (the "Original Subordinated Indenture") was amended by a
first supplemental indenture (the "First Supplemental 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.
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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
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 will be
described in the Prospectus Supplement relating to such series of Notes.
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, and whether any of the
Notes are to be issuable in temporary or permanent global form; (4) the price at
which the Notes will be issued; (5) the date on which the Notes will mature; (6)
the rate per annum at which the Notes will bear interest, if any, or the formula
pursuant to which such rate will be determined, and the date 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
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 within which and the price at which the Notes will be redeemed
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<PAGE>
or purchased, in whole or in part, pursuant to such obligation, and the other
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 denominations in which Bearer Notes will be
issuable, if other than denominations of $5,000 and integral multiples thereof;
(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
(which may be based on the value of any currencies, commodities, securities or
any group or combination thereof) 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 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 for federal income tax purposes as it accrues,
generally before receipt of cash attributable to such income.
To the extent described in the applicable Prospectus Supplement, Notes may
be convertible or exchangeable, at the option of the holder or Citicorp, into
common stock or other securities of Citicorp or another issuer. Any applicable
conversion or exchange provisions will be described in the Prospectus
Supplement.
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 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 ("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 Note issued in bearer form or
issued in global form and exchangeable for Notes
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<PAGE>
in bearer form (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) that is (i) a foreign branch of a United
States financial institution or (ii) a United States person that acquired such
Euro-Note through the foreign branch of a United States financial institution
and that 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 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 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 when the Security Registrar or such transfer agent, as the case may be,
is satisfied with the documents of title and identity of the person making the
request. Citicorp has appointed Citibank as Security Registrar. (Indentures
ss.305). Citicorp may at any time rescind the designation of any transfer agent
(other than the Security Registrar) 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
8
<PAGE>
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 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
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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 surrenderedfor 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
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 may
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 Bank,
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
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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 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)
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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).
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 annually to each Trustee 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).
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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, 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 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
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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.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 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)
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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
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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).
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
The Subordinated Notes will be subordinate and junior in right of payment,
to the extent set forth in the Subordinated 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 marshaling 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
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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 outstanding on the date of the Subordinated Indenture or subsequently
incurred, other than (w) any securities issued under the Subordinated Indenture
(including Subordinated Notes), (x) all other unsecured and subordinated
indebtedness of Citicorp, and all other unsecured and subordinated guarantees by
Citicorp of indebtedness of other Persons, (y) all obligations incurred or
assumed by Citicorp in the ordinary course of business in connection with the
obtaining of materials or services, and all obligations of Citicorp in respect
of any guarantees of such obligations of subsidiaries of Citicorp (provided that
obligations described in this clause (y) shall not include traveler's checks or
other unsubordinated financial instruments) and (z) any other obligations 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. (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 Notes, 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 other Citicorp indentures under which unsecured
debt securities are currently outstanding.
The Chase Manhattan Bank (formerly known as 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 other indentures
under which subordinated unsecured debt securities issued or guaranteed by
Citicorp are currently outstanding.
Citicorp or its affiliates maintain certain accounts and other banking
relationships with the Trustees and their respective affiliates.
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
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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 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 Euro-Note
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 acquiring 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."
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 such 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
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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) a person described in (D)
or (E) of this paragraph will not be considered an exempt purchaser unless 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.
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. 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
relevant foreign 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 significant 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 relevant foreign 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 the
Security.
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PLAN OF DISTRIBUTION
Securities may be offered and sold 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, and offers and sales of Securities may include secondary market
transactions by affiliates of Citicorp. The applicable Prospectus Supplement
will set forth the terms of the offering to which such Prospectus Supplement
relates, including the name or names of any underwriters or agents, the public
offering or purchase price, 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, any commissions
allowed or paid to agents, and the securities exchanges, if any, on which such
Securities will be listed. Dealer trading may take place in certain of the
Securities, including Securities not listed on any securities exchange. Direct
sales may be made on a national securities exchange or otherwise.
The Securities 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. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time. If so indicated in the applicable Prospectus Supplement,
Citicorp will authorize underwriters or agents to solicit offers by certain
institutions to purchase securities from Citicorp pursuant to Delayed Delivery
Contracts providing for payment and delivery at a future date.
Each underwriter and agent participating in the distribution of any
Euro-Notes will agree that it will not offer, sell or deliver, directly or
indirectly, such Notes, in connection with the sale thereof during the
restricted period, in the United States or to United States persons, with
certain limited exceptions. See "Limitations on Issuance of Euro-Notes."
Any underwriter or agent participating in the distribution of the
Securities 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 Securities so
offered and sold and any discounts or commissions received by them and any
profit realized by them on the sale or resale of the Securities 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 subsidiaries of Citicorp in connection with offers and sales related
to secondary market transactions. 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 Securities will comply with the requirements of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc. (the
"NASD") regarding underwriting securities of an affiliate. No NASD member
participating in offers and sales will execute a transaction in the Securities
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 ordinary course of
business.
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VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for Citicorp by Stephen
E. Dietz, as an AssociateGeneral Counsel of Citibank. 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.
EXPERTS
The consolidated financial statements of Citicorp and subsidiaries
included in Citicorp's Annual Report and Form 10-K for 1996 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, 1996 financial statements refers to
the fact that in 1994 Citicorp adopted Statement of Financial Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits,"
and SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
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