PROSPECTUS SUPPLEMENT
(To Prospectus Dated October 27, 1997)
Citicorp [Logo]
U.S. $2,000,000,000 Medium-Term
Senior Notes, Series F
U.S. $1,000,000,000 Medium-Term
Subordinated Notes, Series F
TERMS OF SALE
The following terms may apply to the Notes which Citicorp may sell at one or
more times. The final terms for each Note will be included in a Pricing
Supplement. For more detail, see "Description of Notes." Citicorp will receive
between $2,996,250,000 and $2,910,000,000 of the proceeds from the sale of the
Notes, after paying the Agents' commissions of between $3,750,000 and
$90,000,000.
o Mature 9 months to 60 years o Certificated or book-entry form
o Fixed or floating interest rate or o Subject to redemption and
indexed notes or zero-coupon or repurchase at option of Citicorp
other original issue discount or holder
notes. The floating interest
holdere formula would be based on: o Interest paid on fixed rate notes
semi-annually
o Commercial paper rate o Interest paid on floating rate
o LIBOR notes monthly, quarterly, semi-
o Treasury rate annually or annually
o CD rate
o Federal Funds effective rate o Minimum denominations of $50,000
o Prime rate increased in multiples of $1,000
o CMT rate (minimum denominations may be
less for foreign currency Notes)
The price of the Notes to the public will be set forth in a Pricing Supplement.
Citicorp may offer the Notes on a continuous basis through the Agents, each of
which has agreed to use its reasonable best efforts when requested by Citicorp
to solicit offers to purchase the Notes.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved the Notes. Nor has any such organization determined that
this Prospectus Supplement is accurate or complete. Any representation to the
contrary is a criminal offense.
These securities are not deposits or savings accounts but are unsecured debt
obligations of Citicorp. These securities are not insured by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality.
- --------------------------------------------------------------------------------
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 thereby. They also do not constitute an offer
to sell or a solicitation of an offer to buy the securities in any jurisdiction
to any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction.
Bear, Stearns & Co. Inc. Merrill Lynch & Co.
Citicorp Securities, Inc. Morgan Stanley Dean Witter
Credit Suisse First Boston PaineWebber Incorporated
Donaldson, Lufkin & Jenrette Prudential Securities Incorporated
Securities Corporation Salomon Brothers Inc
Goldman, Sachs & Co. Smith Barney Inc.
Lehman Brothers UBS Securities
October 27, 1997
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TABLE OF CONTENTS
Prospectus Supplement
Page No.
Description of Notes................................................... S-3
General.............................................................. S-3
Interest............................................................. S-5
Fixed Rate Notes..................................................... S-7
Floating Rate Notes.................................................. S-7
Book-Entry Notes..................................................... S-15
United States Taxation................................................. S-17
United States Holders................................................ S-18
Payments of Interest................................................. S-18
Original Issue Discount.............................................. S-18
Notes Purchased at a Premium......................................... S-21
Purchase, Sale and Retirement of Notes............................... S-21
Backup Withholding and Information Reporting......................... S-21
Plan of Distribution of Notes.......................................... S-22
Validity of the Notes.................................................. S-24
Glossary Supplement.................................................... S-25
Prospectus
Incorporation of Certain Documents by Reference........................ 2
Citicorp............................................................... 3
Holding Company...................................................... 3
Use of Proceeds........................................................ 3
Ratios of Income to Fixed Charges...................................... 4
Description of Notes................................................... 4
General.............................................................. 5
Form, Exchange, Registration and Transfer............................ 7
Payment and Paying Agents............................................ 7
Global Notes......................................................... 8
Limitations on Liens on Stock of Citibank, N.A....................... 8
Defaults; Events of Default.......................................... 8
Meetings, Modification and Waiver.................................... 10
Consolidation, Merger and Sale of Assets............................. 12
Notices.............................................................. 12
Title................................................................ 12
Replacement of Notes and Coupons..................................... 13
Defeasance and Covenant Defeasance................................... 13
Subordination........................................................ 13
Certain Amendments to the Subordinated Indenture..................... 15
Governing Law........................................................ 15
Concerning the Trustees.............................................. 15
Foreign Currency Risks................................................. 16
General.............................................................. 16
Exchange Rates and Exchange Controls................................. 16
Plan of Distribution................................................... 16
Validity of Securities................................................. 17
Experts................................................................ 17
Glossary............................................................... 18
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DESCRIPTION OF NOTES
The description in this Prospectus Supplement of the particular terms
of the Notes supplements the description of the general terms and provisions of
the Notes set forth in the accompanying Prospectus under the heading
"Description of Notes." Capitalized terms are used as defined in this Prospectus
Supplement. If terms are not defined in this Prospectus Supplement, they have
the meanings assigned to them in the accompanying Prospectus. Both this
Prospectus Supplement and the Prospectus contain a Glossary that lists the page
number on which the definition of a term can be found. The following description
of the Notes will apply unless otherwise stated in a Pricing Supplement. When
Citicorp refers herein to a Pricing Supplement, it refers to the Pricing
Supplement relating to a particular issue of Notes.
General
Citicorp is offering its Medium-Term Senior Notes, Series F and its
Medium-Term Subordinated Notes, Series F by this Prospectus Supplement.
Throughout this Prospectus Supplement, the Medium-Term Senior Notes, Series F
are referred to as "Senior Notes" and the Medium-Term Subordinated Notes, Series
F are referred to as "Subordinated Notes." The Senior Notes and the Subordinated
Notes are together referred to as "Notes."
Citicorp will sell the Notes in issues consisting of one or more Notes
of like tenor and having the same issue date. Citicorp will establish certain
terms of each issue of Notes at the time of their issue and will set forth the
terms in a related supplement to this Prospectus Supplement. Throughout this
Prospectus Supplement, each such supplement is referred to as a "Pricing
Supplement."
Unless otherwise indicated in a Pricing Supplement, the Notes, except
Zero-Coupon Notes, will bear interest at a fixed rate or a rate determined by
reference to an interest rate index or other formula. The Pricing Supplement
will set forth such rate or formula. Zero-Coupon Notes will be issued at a
discount from their principal amount payable at Maturity. Holders of Zero-Coupon
Notes will not receive periodic payments of interest.
The Senior Notes will be issued under the Indenture, dated as of
September 1, 1989, between Citicorp and United States Trust Company of New York,
as trustee, as supplemented by a First Supplemental Indenture dated as of
September 25, 1990. Throughout this Prospectus Supplement, such Indenture,
together with such First Supplemental Indenture and any additional supplemental
indentures, is referred to as the "Senior Indenture".
The Subordinated Notes 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, as supplemented by the First Supplemental Indenture
dated as of November 27, 1992 and the Second Supplemental Indenture dated as of
December 17, 1996. Throughout this Prospectus Supplement, such Indenture,
together with such First Supplemental Indenture, Second Supplemental Indenture
and any additional supplemental indentures, is referred to as the "Subordinated
Indenture" and the Subordinated Indenture and the Senior Indenture are each
referred to as an "Indenture" and together are referred to as the "Indentures".
S-3
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The Senior Notes and the Subordinated Notes each constitute a single
series for purposes of the applicable Indenture and are limited to an aggregate
principal amount of up to U.S. $2,000,000,000 in the case of the Senior Notes,
and up to U.S. $1,000,000,000 in the case of the Subordinated Notes. Such limits
are subject to reduction by action of Citicorp's Board of Directors. However, 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" in
this Prospectus Supplement. Citicorp may also increase those limits if in the
future it determines that it wishes to sell additional Notes.
The Senior Notes will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of Citicorp. The Subordinated Notes
will be unsecured and will rank equally with all other unsecured and
subordinated indebtedness of Citicorp, other than subordinated indebtedness
which is designated as junior to the Subordinated Notes.
Citicorp will issue the Notes only in fully registered form and, unless
otherwise provided in the Pricing Supplement, only in denominations of U.S.
$50,000 and integral multiples of U.S. $1,000 in excess of $50,000.
The Notes will be represented by one or more global Notes registered in
the name of The Depository Trust Company, as depositary, or a nominee of the
depositary. If so specified in the Pricing Supplement, the Notes may be issued
in definitive form. Throughout this Prospectus Supplement, The Depository Trust
Company, as depositary of the global Notes, is referred to as the "Depositary"
and each beneficial interest in a global Note is referred to as a "Book-Entry
Note."
The description of the terms of the Notes in this Prospectus Supplement
applies to definitive Notes and to any global Note or Notes representing
Book-Entry Notes. For a description of special provisions that apply to
Book-Entry Notes, see "Book-Entry Notes" below.
Citicorp may issue the Notes 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 its Stated Maturity. Upon
redemption or acceleration of the Stated Maturity of an original issue discount
Note, an amount less than the principal amount payable at its Stated Maturity,
as determined in accordance with its terms, becomes due and payable. Original
issue discount Notes, as well as certain other Notes offered under this
Prospectus Supplement, 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" below. A "Zero-Coupon Note" means a Note that
does not bear interest prior to Maturity.
Citicorp may issue the Notes as indexed notes, as set forth in a
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
S-4
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specified index. The Pricing Supplement relating to an issue of indexed notes
will contain specific information pertaining to the method for determining the
principal amount payable at Maturity, a historical comparison of the relative
value, rate or price of the specified index, the face amount of the indexed
note, certain additional tax considerations, and the manner of calculation of
the amount principal or interest payable if the specified index is no longer
calculated or published.
The "Stated Maturity"' of an issue of Notes is the date specified in
the Pricing Supplement as the fixed date on which the principal of such Notes is
due and payable. The "Maturity" of an issue of Notes is the date on which the
principal of such Notes becomes due and payable, whether at Stated Maturity, by
acceleration, redemption or otherwise.
The Pricing Supplement will indicate either that a Note cannot be
redeemed prior to its Stated Maturity or that Citicorp may redeem a Note at its
option 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 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. If Citicorp
will be so obligated, the Pricing Supplement will indicate the period or periods
within which and the price or prices at which the applicable Notes will be
redeemed or purchased, in whole or in part, pursuant to such obligation and the
other detailed terms and provisions of such obligation.
Unless otherwise indicated in the Pricing Supplement, the Notes will be
denominated in U.S. dollars and payments of principal of and any premium and
interest on such Notes will be made in U.S. dollars in the manner described in
this Prospectus Supplement under "Book-Entry Notes" below and in the
accompanying Prospectus under the caption "Description of Notes--Payment and
Paying Agents".
Payments of principal of and any premium and interest payable at
Maturity on a Note denominated in U.S. dollars will be made in immediately
available funds at the offices of Citibank, N.A., as paying agent, in the
Borough of Manhattan, the City of New York, provided that the Note is presented
to the paying agent in time for the paying agent to make such payments in such
funds in accordance with its normal procedures.
A holder may present a Note for registration of transfer or exchange at
the offices of Citibank, N.A. in the Borough of Manhattan, the City of New York.
For a description of the rights attaching to series of Notes under the
applicable Indenture, see "Description of Notes" in the accompanying Prospectus.
The provisions of the Indentures described under "Description of
Notes--Defeasance and Covenant Defeasance" in the accompanying Prospectus apply
to the Notes.
Interest
Each Note, except a Zero-Coupon Note, will bear interest at either (a)
a fixed rate or rates or (b) a variable rate, unless otherwise indicated in the
Pricing Supplement. Throughout this
S-5
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Prospectus Supplement, a Note which bears interest at a fixed rate is referred
to as a "Fixed Rate Note" and a Note which bears interest at a variable rate is
referred to as a "Floating Rate Note." Holders of Zero-Coupon Notes will
receive no periodic payments of interest on such Notes.
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 has been paid or duly provided for, until the
principal of such Note is paid or made available for payment. Interest will be
payable on each Interest Payment Date and at Maturity.
Interest will be payable generally to the person in whose name a Note
is registered at the close of business on the Regular Record Date next preceding
each Interest Payment Date. However, interest payable at Maturity will be
payable to the person to whom principal will 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.
Unless otherwise specified in the Pricing Supplement, interest will
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. Throughout this Prospectus
Supplement, each such period is referred to as an "Interest Period".
The "Interest Payment Dates" with respect to any Note are the dates on
which accrued interest on such Note is due and payable, as specified in the
Pricing Supplement. The Interest Payment Dates for Fixed Rate Notes will occur
semi-annually in each year and at Maturity. If any Interest Payment Date with
respect to a Fixed Rate Note falls on a day that is not a Market Day, payments
due will be made on the next succeeding Market Day as if they were made on the
date they were due and no interest will accrue on the amounts payable for the
period from and after such Interest Payment Date. If any Interest Payment Date
with respect to a Floating Rate Note, other than that occurring on Maturity,
falls on a day that is not a Market Day, such Interest Payment Date will be the
next succeeding Market Day. However, in the case of a LIBOR Note, if the next
succeeding Market Day is in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding Market Day. If the Maturity with
respect to any Floating Rate Note falls on a day that is not a Market Day,
payments due will be made on the next succeeding Market Day. Such payments will
be made as if they were made on the date they were due and no interest will
accrue on the amounts payable for the period from and after Maturity.
Unless otherwise indicated in the Pricing Supplement, the "Regular
Record Date" for Fixed Rate Notes and Floating Rate Notes is the date 15
calendar days prior to each Interest Payment Date, whether or not such date is a
Market Day.
S-6
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In addition to any Maximum Interest Rate which may be applicable to any
Note, the interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law, as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of
interest is 25% per annum on a simple interest basis. The limit does not apply
to Notes in which U.S. $2,500,000 or more has been invested.
Fixed Rate Notes
The 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 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.
Floating Rate Notes
The Pricing Supplement relating to a Floating Rate Note will designate
an interest rate index for such Floating Rate Note. Such index may be:
(a) the Commercial Paper Rate, in which case such Note will be
a "Commercial Paper Rate Note";
(b) LIBOR, in which case such Note will be a "LIBOR Note";
(c) the Treasury Rate, in which case such Note will be a
"Treasury Rate Note";
(d) the Certificate of Deposit Rate, in which case such Note
will be a "CD Rate Note";
(e) the Federal Funds Effective Rate, in which case such Note
will be a "Federal Funds Rate Note";
(f) the Prime Rate, in which case such Note will be a "Prime
Rate Note";
(g) the Constant Maturity Treasury Rate, in which case such
Note will be a "CMT Rate Note"; or
(h) such other interest rate index or formula as is set forth
in such Pricing Supplement.
In addition, such Pricing Supplement will specify for each Floating
Rate Note the following terms, if applicable: Calculation Dates; Initial
Interest Rate; Maximum Interest Rate; Minimum Interest Rate; Spread and/or
Spread Multiplier; Interest Payment Dates; Regular Record Dates; Index Maturity;
Interest Determination Dates and Interest Reset Dates.
S-7
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"Spread" means the number of basis points specified in the Pricing
Supplement to be added to the interest rate for a particular Floating Rate Note.
"Spread Multiplier" means the percentage specified in the Pricing Supplement to
be multiplied by the interest rate for a particular Floating Rate Note.
"Calculation Date" means the date specified in the Pricing Supplement
on which the interest rate for a Floating Rate Note will be calculated.
"Market Day" means any day that is not a Saturday or Sunday or a day on
which banking institutions generally are authorized or obligated by law or
executive order to close in the City of New York. With respect to LIBOR Notes
only, "Market Day" means any such day on which dealings in deposits in U.S.
dollars are also transacted in the London interbank market.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually, as specified in the
Pricing Supplement. The date on which the rate of interest is so reset is
referred to throughout this Prospectus Supplement as the "Interest Reset Date."
The interest rate in effect from the issue date of a Floating Rate Note to the
first Interest Reset Date will be the "Initial Interest Rate" and will be set
forth or calculated as described in the Pricing Supplement. Unless otherwise
specified in the Pricing Supplement, the interest rate in effect for the ten
days immediately prior to Maturity of any installment of principal will be that
in effect on the tenth day preceding the Maturity. If any Interest Reset Date
for any Floating Rate Note would otherwise be a day that is not a Market Day,
the Interest Reset Date for such Floating Rate Note will be the next succeeding
Market Day. However, in the case of a LIBOR Note, if such Market Day is in the
next succeeding calendar month, such Interest Reset Date will be the immediately
preceding Market Day.
"Interest Determination Date" means, with respect to any Note, the
date, as specified in the Pricing Supplement, as of which the rate of interest
in effect on an Interest Reset Date will be determined. Unless otherwise
specified in the Pricing Supplement, the Interest Determination Date pertaining
to an Interest Reset Date for a Floating Rate Note other than a Treasury Rate
Note will be the second Market Day preceding such Interest Reset Date. For a
Treasury Rate Note, it will be the day of the week on which Treasury bills are
auctioned in the week in which such Interest Reset Date falls. Treasury bills
are normally sold at auction on Monday of each week. However, if that day is a
legal holiday, the auction is usually held on the following Tuesday or,
sometimes, on the preceding Friday. If, as the result of a legal holiday, an
auction is held on the preceding Friday, such Friday will be the Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date falls on a day which would otherwise be an
Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date will
be the first Market Day immediately following such auction date.
If specified in the Pricing Supplement, a Floating Rate Note may have
either a Maximum Interest Rate or a Minimum Interest Rate or both. A "Maximum
Interest Rate" is a maximum numerical interest rate limitation, or ceiling, on
the rate of interest which may accrue during any Interest Period. A "Minimum
Interest Rate" is a minimum numerical interest rate limitation, or floor, on the
rate of interest which may accrue during any Interest Period.
S-8
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Unless otherwise indicated in the Pricing Supplement, interest payments
for a Floating Rate Note will be the amount of interest accrued to, but
excluding, the Interest Payment Date or Maturity. However, 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 only include interest accrued
to and including the next preceding Regular Record Date.
Accrued interest on any Floating Rate Note from its issue date or from
the last date to which interest has been paid or duly provided for is calculated
by multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day from the issue date or from the last date to which
interest has been paid or duly provided for, as the case may be, to the date for
which accrued interest is being calculated. Unless otherwise specified in the
Pricing Supplement, the interest factor for each such day is computed by
dividing the interest rate applicable to such date by 360 (or by the actual
number of days in the year, in the case of Treasury Rate Notes or CMT Rate
Notes).
Unless otherwise specified in the 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. All dollar amounts
used in or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upwards).
Upon the request of the holder of any Floating Rate Note, the
Calculation Agent will provide the interest rate then in effect. The Calculation
Agent will also provide, if it has been determined, the interest rate which will
become effective as a result of a determination made on the most recent Interest
Determination Date. The "Calculation Agent" means the agent appointed by
Citicorp to calculate interest rates for Floating Rate Notes. Unless otherwise
provided in an Pricing Supplement, the Calculation Agent will be Citibank, N.A.
Commercial Paper Rate Notes. Each Commercial Paper Rate Note will bear
interest at the interest rate (calculated with reference to the Commercial Paper
Rate and the Spread and/or Spread Multiplier, if any) specified in the Pricing
Supplement.
Unless otherwise indicated in the Pricing Supplement, "Commercial Paper
Rate" means, with respect to any Interest Determination Date, the Money Market
Yield (calculated as described below) of the rate quoted on a discount basis on
such date for commercial paper having the Index Maturity specified in the
Pricing Supplement as published in H.15(519) under the heading "Commercial
Paper- Nonfinancial". If such rate is not published prior to 9:00 A.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, then the Commercial Paper Rate will be the Money Market Yield of the rate
on such Interest Determination Date for commercial paper having the Index
Maturity specified in the Pricing Supplement as published in Composite
Quotations under the heading "Commercial Paper". If such rate on such
Calculation Date is neither published in H.15(519) by 9:00 A.M., New York City
time, nor in Composite Quotations by 3:00 P.M., New York City time, the
Commercial Paper Rate for that Interest Determination Date will be calculated by
the Calculation Agent. In such case, the Commercial Paper Rate will be the Money
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Market Yield of the arithmetic mean of the offered rates, as of 11:00 A.M., New
York City time, on that Interest Determination Date, of three leading dealers of
commercial paper in the City of New York selected by the Calculation Agent for
commercial paper having the Index Maturity specified in the Pricing Supplement
placed for an industrial issuer whose senior unsecured bond rating is "Aa", or
the equivalent, from a nationally recognized rating agency. If the dealers
selected by the Calculation Agent are not quoting, the Commercial Paper Rate
will be the Commercial Paper Rate in effect on such Interest Determination Date.
"Money Market Yield" is a yield (expressed as a percentage) calculated
in accordance with the following formula:
D x 360
Money Market Yield = ------------ x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
"Index Maturity" means, with respect to a Floating Rate Note, the
period to maturity of the instrument or obligation on which the interest rate
index is based, as indicated in the Pricing Supplement. "Composite Quotations"
means the daily statistical release entitled "Composite 3:30 P.M. Quotations for
U.S. Government Securities", or any successor publication, published by the
Federal Reserve Bank of New York. "H.15(519)" means the weekly statistical
release entitled "Statistical Release H.15(519), Selected Interest Rates", or
any successor publication, published by the Board of Governors of the Federal
Reserve System.
LIBOR Notes. Each LIBOR Note will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any) specified in the Pricing Supplement.
Unless otherwise indicated in the Pricing Supplement, "LIBOR" will be
determined by the Calculation Agent in accordance with the following provisions:
(a) With respect to any Interest Determination Date, LIBOR
will be, as specified in the Pricing Supplement, either (i) the rate
for deposits in U.S. dollars having the Index Maturity specified in the
Pricing Supplement, commencing on the second Market Day immediately
following the Interest Determination Date, that appears on the Telerate
Page 3750 as of 11:00 A.M. on that Interest Determination Date, or (ii)
the arithmetic mean of the offered rates for deposits in U.S. dollars
having the Index Maturity specified in the Pricing Supplement,
commencing on the second Market Day immediately following such Interest
Determination Date, which appear on the Reuters Screen LIBO Page as of
11:00 A.M., London time, on such Interest Determination Date, if at
least two such offered rates appear on the Reuters Screen LIBO Page.
"Reuters Screen LIBO Page" means the display designated as page "LIBO"
on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks or a comparable display,
as determined in the sole discretion of
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and selected by the Calculation Agent, of London interbank offered rates
or major bank offered rates, as may be available from a similar service).
"Telerate Page 3750" means the display page so designated on the Dow Jones
Telerate Service (or such other page or pages as may replace such page on the
system for the purpose of displaying London interbank offered rates of major
banks). If fewer than two offered rates appear on the Reuters Screen LIBO Page,
or if no rate appears on Telerate Page 3750, as applicable, LIBOR for
such Interest Determination Date will be determined as described in (b)
below. The selection of the Reuters Screen LIBO Page or the Telerate
Page 3750 will be as specified in the Pricing Supplement. If neither
Reuters Screen LIBO or Telerate Page 3750 is specified in the Pricing
Supplement, LIBOR will be determined as if Telerate Page 3750 had been
specified.
(b) With respect to an Interest Determination Date on which
fewer than two offered rates for the applicable Index Maturity appear
on the Telerate Page 3750 as specified in (a)(i) above, or on which no
rate appears on the Reuters Screen LIBO Page as specified in (a)(ii)
above, LIBOR will be determined by the Calculation Agent. In such case,
the Calculation Agent will determine LIBOR on the basis of the rates on
such Interest Determination Date at approximately 11:00 A.M., London
time, at which deposits in U.S. dollars having the Index Maturity
designated in the Pricing Supplement, commencing on the second Market
Day immediately following such Interest Determination Date and in a
principal amount of not less than U.S. $1,000,000 and representative
for a single transaction in such market at such time, are offered to
prime banks in the London interbank market by four major banks in the
London interbank market selected by the Calculation Agent. The
Calculation Agent will request the principal London office of each of
such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR for such LIBOR Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00
A.M., New York City time, on such Interest Determination Date by three
major banks in the City of New York selected by the Calculation Agent
for loans in U.S. dollars to leading European banks having the
applicable Index Maturity commencing on the second Market Day
immediately following such Interest Determination Date and in a
principal amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time. If
the banks selected by the Calculation Agent are not quoting, LIBOR will
be LIBOR in effect on such Interest Determination Date.
Treasury Rate Notes. Each Treasury Rate Note will bear interest at the
interest rate (calculated with reference to the Treasury Rate and the Spread
and/or Spread Multiplier, if any) specified in the Pricing Supplement.
Unless otherwise indicated in the Pricing Supplement, "Treasury Rate"
means, with respect to any Interest Determination Date, the rate for the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified in the Pricing Supplement as published in
H.15(519) under the heading "U.S. Government Securities/Treasury Bills/Auction
Average (Investment)". If not so published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, the
Treasury Rate will be the auction average
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rate (expressed as a bond equivalent,
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury bills
having the Index Maturity specified in the Pricing Supplement are neither
published nor announced as provided above by 3:00 P.M., New York City time, on
such Calculation Date, or if no such auction is held in a particular week, then
the Treasury Rate will be calculated by the Calculation Agent. In such case, the
Treasury Rate will be a yield to maturity (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates as of
approximately 3:30 P.M., New York City time, on such Interest Determination
Date, of three leading primary United States government securities dealers
selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the specified Index Maturity. If the dealers
selected by the Calculation Agent are not quoting, the Treasury Rate
will be the Treasury Rate in effect on such Interest Determination Date.
CD Rate Notes. Each CD Rate Note will bear interest at the interest
rate (calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any) specified in the Pricing Supplement.
Unless otherwise indicated in the Pricing Supplement, "CD Rate " means,
with respect to any Interest Determination Date, the rate on such date for
negotiable certificates of deposit having the Index Maturity specified in the
Pricing Supplement as published in H.15(519) under the heading "CDs (Secondary
Market)". In the event that such rate is not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the CD Rate will be the rate on such Interest Determination Date for
negotiable certificates of deposit having the Index Maturity specified in the
Pricing Supplement as published in Composite Quotations under the heading
"Certificates of Deposit". If such rate is neither published in H.15(519) nor in
Composite Quotations by 3:00 P.M., New York City time, on such Calculation Date,
the CD Rate for such Interest Determination Date will be calculated by the
Calculation Agent. In such case, the CD Rate will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date, of three leading nonbank dealers of negotiable U.S.
dollar certificates of deposit in the City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the Index Maturity specified in the Pricing
Supplement in a denomination of $5,000,000. If the dealers selected by the
Calculation Agent are not quoting, the CD Rate will be the CD Rate in effect on
such Interest Determination Date.
Federal Funds Rate Notes. Each Federal Funds Rate Note will bear
interest at the interest rate (calculated with reference to the Federal Funds
Effective Rate and the Spread and/or Spread Multiplier, if any) specified in the
Pricing Supplement.
Unless otherwise indicated in the Pricing Supplement, "Federal Funds
Effective Rate" means, with respect to any Interest Determination Date, the rate
on that date for federal funds having the Index Maturity specified in the
Pricing Supplement as published in H.15(519) under the heading "Federal Funds
(Effective)". In the event that such rate is not so published by 3:00 P.M., New
York
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City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Effective Rate will be the rate on such
Interest Determination Date as published in Composite Quotations under the
heading "Federal Funds/Effective Rate". If such rate is neither published in
H.15(519) nor in Composite Quotations by 3:00 P.M., New York City time, on such
Calculation Date, the Federal Funds Effective Rate for such Interest
Determination Date will be calculated by the Calculation Agent. In such case,
the Federal Funds Effective Rate will be the arithmetic mean of the rates for
the last transaction in overnight United States dollar federal funds arranged by
three leading brokers of federal funds transactions in the City of New York
(which may include the Agents or their affiliates) selected by the Calculation
Agent prior to 9:00 A.M., New York City time, on such Interest Determination
Date. If the brokers selected by the Calculation Agent are not quoting, the
Federal Funds Effective Rate will be the Federal Funds Effective Rate in effect
on such Interest Determination Date.
Prime Rate Notes. Each Prime Rate Note will bear interest at the
interest rate (calculated with reference to the Prime Rate and the Spread and/or
Spread Multiplier, if any) specified in the Pricing Supplement.
Unless otherwise indicated in the Pricing Supplement, "Prime Rate"
means, with respect to any Interest Determination Date, the rate set forth on
such date in H.15(519) under the heading "Bank Prime Loan". In the event that
such rate is not published prior to 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the Prime
Rate will be determined by the Calculation Agent. In such case, the Prime Rate
will be the arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen USPRIME1 Page as such bank's prime rate
or base lending rate as in effect for that Interest Determination Date. If fewer
than four such rates but more than one such rate appear on the Reuters Screen
USPRIME1 Page for the Interest Determination Date, the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Interest Determination Date by
four major money center banks in the City of New York selected by the
Calculation Agent. If fewer than two such rates appear on the Reuters Screen
USPRIME1 Page, the Prime Rate will be determined by the Calculation Agent on the
basis of the rates furnished in the City of New York by the appropriate number
of substitute banks or trust companies organized and doing business under the
laws of the United States, or any State, having total equity capital of at least
U.S. $500,000,000 and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to provide such rate or
rates. If the banks selected are not quoting, the Prime Rate will be the Prime
Rate in effect on such Interest Determination Date. "Reuters Screen USPRIME1
Page" means the display designated as page "USPRIME1" on the Reuters Monitor
Money Rates Service (or such other page as may replace the USPRIME1 page on that
service for the purpose of displaying prime rates or base lending rates of major
United States banks).
CMT Rate Notes. CMT Rate Notes will bear interest at the rates
(calculated with reference to the CMT Rate and the Spread and/or Spread
Multiplier, if any) specified in such CMT Rate Notes and any Pricing Supplement.
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Unless otherwise specified in the Pricing Supplement, "CMT Rate" means,
with respect to any Interest Determination Date, the rate displayed on the
Designated CMT Telerate Page under the caption ". . . Treasury Constant
Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately
3:45 P.M.", under the column for the Index Maturity for (i) if the Designated
CMT Telerate Page is 7055, such Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week, or the month, as set forth in
the Pricing Supplement, ended immediately preceding the week in which the
related Interest Determination Date occurs. If such rate is no longer displayed
on the relevant page, or if not displayed by 3:00 P.M., New York City time, on
the related Calculation Date, then the CMT Rate for such Interest Determination
Date will be such treasury constant maturity rate for the Index Maturity as
published in the relevant H.15(519). If such rate is no longer published, or if
not published by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for such Interest Determination Date will be such treasury
constant maturity rate for the Index Maturity (or other United States Treasury
rate for the Index Maturity) for the Interest Determination Date as may then be
published by either the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the Calculation Agent determines
to be comparable to the rate formerly displayed on the Designated CMT Telerate
Page and published in the relevant H.15(519). If such information is not
provided by 3:00 P.M., New York City time, on the related Calculation Date, then
the CMT Rate for the Interest Determination Date will be calculated by the
Calculation Agent. In such case, the CMT Rate will be a yield to maturity, based
on the arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 P.M., New York City time, on the Interest Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers (each, a "Reference Dealer") in the City of
New York (which may include an Agent or its affiliates) selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity of
approximately the Index Maturity and a remaining term to maturity of not less
than such Index Maturity minus one year. If the Calculation Agent cannot obtain
three such Treasury Note quotations, the CMT Rate for such Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 P.M., New York City time, on the
Interest Determination Date of three Reference Dealers in the City of New York
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury Notes with an original maturity of the number of years
that is the next highest to the Index Maturity and a remaining term to maturity
closest to the Index Maturity and in an amount of at least $100 million. If
three or four (and not five) of such Reference Dealers are quoting, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated. If fewer
than three Reference Dealers selected by the Calculation Agent are quoting, the
CMT Rate will be the CMT Rate in effect on such Interest Determination Date. If
two Treasury Notes with an original maturity as described in the fourth
preceding sentence have remaining terms to maturity equally close to the Index
Maturity, the quotes for the Treasury Note with the shorter remaining term to
maturity will be used.
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"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated in the Pricing Supplement (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)), for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified in the Pricing Supplement, the Designated CMT Telerate Page
will be 7052, for the most recent week.
Book-Entry Notes
Upon issuance, all Book-Entry Notes of the same issue will be
represented by one or more global Notes. Such global Notes are referred to
throughout this Prospectus Supplement as the "global Notes." Each global Note
will be deposited with, or on behalf of, the Depositary, located in the Borough
of Manhattan, the City of New York, and will be registered in the name of the
Depositary or a nominee of the Depositary. Unless otherwise specified in the
Pricing Supplement, all global Notes will be denominated in U.S. dollars only.
Ownership of Book-Entry Notes will be limited to institutions that have
accounts with the Depositary or its nominee ("participants") or persons that may
hold interests through participants. In addition, ownership of Book-Entry Notes
by participants will only be evidenced by, and the transfer of that ownership
interest will be effected only through, records maintained by the Depositary or
its nominee, as the case may be. Ownership of Book-Entry Notes by persons that
hold through participants will only be evidenced by, and the transfer of that
ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such laws may impair the ability to transfer Book-Entry
Notes.
Citicorp has been advised by the Depositary that upon the issuance of a
global Note, and the deposit of such global Note with or on behalf of the
Depositary, the Depositary will immediately credit, on its book-entry
registration and transfer system, the respective principal amounts of the
Book-Entry Notes represented by such global Note to the accounts of
participants. The soliciting Agent will designate the accounts to be credited
or, if such Notes are offered and sold directly by Citicorp, Citicorp will
designate the accounts to be credited.
Payments of principal of and any premium and interest on Book-Entry
Notes represented by global Notes registered in the name of or held by the
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner and the holder of the global Notes
representing such Book-Entry Notes. Such payments to the Depositary or its
nominee, as the case may be, will be made in immediately available funds at the
offices of Citibank, N.A., as paying agent, in the Borough of Manhattan, the
City of New York. In the case of payments of principal and any premium, the
global Notes must be 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 or either trustee, or any agent of Citicorp or either trustee,
will have any responsibility or liability for any aspect of the Depositary's
records or any participant's records relating to, or payments made on account
of, Book-Entry Notes. Neither will any such entity have any liability or
responsibility for maintaining, supervising or reviewing any of the Depositary's
records or any participant's records relating to such Book-Entry Notes.
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The Depositary has advised Citicorp that, upon receipt of any payment
of principal of or any premium or interest in respect of a global Note, the
Depositary will immediately credit, on its book-entry registration and transfer
system, accounts of participants. The Depositary will credit such account with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such global Note as shown on the records of the
Depositary. Payments by participants to owners of Book-Entry Notes held through
such participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
registered in "street name", and will be the responsibility of such
participants.
No global Note described above may be transferred except as a whole by
the Depositary for such global Note to a nominee of the Depositary or by a
nominee of the Depositary to another nominee of the Depositary.
Book-Entry Notes represented by a global Note are exchangeable for
definitive Notes in registered form, of like tenor and of an equal aggregate
principal amount, only if:
(a) the Depositary notifies Citicorp that it is unwilling or
unable to continue as Depositary for such global Note;
(b) at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended;
(c) Citicorp in its sole discretion determines that such
Book-Entry Notes will be exchangeable for definitive Notes in
registered form; or
(d) any event has happened and is continuing which, after
notice or lapse of time, or both, would become an Event of Default with
respect to such Notes.
Any global Note representing Book-Entry Notes that is exchangeable will be
exchangeable in whole for definitive Notes in registered form, of like tenor and
of an equal aggregate principal amount, in denominations of U.S. $50,000 and
integral multiples of U.S. $1,000 in excess of $50,000, unless otherwise
specified in the Pricing Supplement.
Definitive Notes will be registered in the name or names of such person
or persons as the Depositary instructs the security registrar. It is expected
that such instructions may be based upon directions received by the Depositary
from its participants with respect to ownership of Book-Entry Notes.
Except as provided above, owners of Book-Entry Notes will not be
entitled to receive physical delivery of Notes in definitive form and will not
be considered the holders of Notes for any purpose under the applicable
Indenture. Except as provided above, no global Note representing Book-Entry
Notes will be exchangeable, except for another global Note of like denomination
and tenor to be registered in the name of the Depositary or its nominee.
Accordingly, each person owning a Book-Entry Note must rely on the procedures of
the Depositary to exercise any rights of a holder under the applicable
Indenture. In addition, if such person is not a participant, such person must
rely
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on the procedures of the participant through which such person owns its
interest. Each Indenture provides that the Depositary, as a holder, may appoint
agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a holder is entitled to give or take under the applicable Indenture. Citicorp
understands that under existing industry practices, in the event that Citicorp
requests any action of holders or an owner of a Book-Entry Note desires to give
or take any action a holder is entitled to give or take under the Indenture,
the Depositary would authorize the participants owning the relevant Book-
Entry Notes to give or take such action. Such participants would then
authorize beneficial owners 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 it is a limited-purpose trust
company organized under the laws of the State of New York. The Depositary has
also advised Citicorp that it is 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 Securities Exchange Act of
1934, as amended. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants through electronic book-entry changes in
accounts of the participants, thus eliminating the need for physical movement of
securities certificates. The Depositary's participants include securities
brokers and dealers (including the Agents), banks, trust companies, clearing
corporations, and certain other organizations, some of whom (and/or their
representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
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. It deals only with Notes held as capital assets by initial
purchasers. It does not deal with special classes of holders, such as dealers in
securities or currencies, life insurance companies, tax-exempt organizations,
persons holding Notes as a hedge or hedged against currency risks or as part of
a straddle or conversion transaction, or persons whose functional currency is
not the U.S. dollar. The summary is based on the Internal Revenue Code of 1986,
as amended (the "Code"), its legislative history, existing and proposed Treasury
regulations under the Code, 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 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 a foreign currency will be discussed in the Pricing Supplement.
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Persons considering the purchase of Notes should consult their own tax
advisors concerning the application of the United States federal income tax laws
to their particular situations, as well as the application of state or local
laws or the laws of any other taxing jurisdiction.
United States Holders
As used in this Prospectus Supplement, "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 of the United States, 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 minimus amount" (as defined below). Generally, the issue price of a
Note will be the first price at which a substantial amount of Notes included in
the issue of which the Note is a part is sold. The stated redemption price at
maturity of a Note is the total of all payments provided by the Note that are
not payments of "qualified stated interest". A qualified stated interest payment
is generally any one of a series of stated interest payments on a Note that are
unconditionally payable at least annually at a single fixed rate (with certain
exceptions for lower rates paid during some periods) applied to the outstanding
principal amount of the Note. Special rules are provided for "variable rate
Notes" (as defined below).
In general, if the excess of a Note's stated redemption price at
maturity over its issue price is less than 1/4 of 1 percent of the Note's stated
redemption price at maturity multiplied by the number of complete years to its
maturity (the "de minimus amount"), then such excess, if any, constitutes "de
minimus OID". An allocable portion of such de minimus OID 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 minimus 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
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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 minimus market discount". The Code provides that,
for these purposes, the "revised issue price" of a Note generally equals its
issue price, increased by the amount of any OID that has accrued on the Note.
Any gain recognized on the maturity or disposition of a market discount
Note will be treated as ordinary income to the extent that such gain does not
exceed the accrued market discount on such Note. Alternatively, a United States
Holder of a market discount Note may elect to include market discount in income
currently over the life of the Note. Such an election will 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 Pricing Supplement.
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Notwithstanding the general rules for determining yield and maturity in
the case of Notes subject to contingencies, if Citicorp has an unconditional
option or options to redeem a Note, or the holder has an unconditional option or
options to cause a Note to be repurchased, prior to the Note's stated maturity,
then (i) in the case of an option or options of Citicorp, Citicorp will be
deemed to exercise or not exercise an option or combination or options in the
manner that minimizes the yield on the Note and (ii) in case of an option or
options of the holder, the holder will be deemed to
exercise or not exercise an option or combination of options in the manner that
maximizes the yield on the Note. For purposes of those calculations, the yield
on the Note is to be determined by using any date on which the Note may be
redeemed or repurchased as the maturity date and the amount payable on such date
in accordance with the terms of the Note as the principal amount payable at
maturity.
If a contingency (including the exercise of an option) actually occurs
or does not occur contrary to an assumption made according to the above rules (a
"change in circumstances") then, solely for purposes of the accrual of OID, the
yield and maturity of the Note are to be redetermined by treating the Note as
reissued on the date of the change in circumstances for an amount equal to the
Note's adjusted issue price on that date, except to the extent that a portion of
the Note is repaid as a result of a change in circumstances.
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 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). Accrual
basis United
S-20
<PAGE>
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, any gain realized on the sale or
retirement of the short-term Note will be ordinary income to the extent of the
OID accrued on a straight-line basis (unless an election is made to accrue the
OID under the constant-yield method) through the date of sale or retirement.
United States Holders who are not required and do not elect
to accrue OID on short-term Notes will be required to defer deductions for
interest on borrowings allocable to short-term Notes in an amount not exceeding
the deferred income until the deferred income is realized. For purposes of
determining the amount of OID subject to these rules, all interest payments on a
short-term Note, including stated interest, are included in the short-term
Note's stated redemption price at maturity.
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 will 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 acquired after that time 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 cost,
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 minimus original issue discount or de minimus
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 will be capital 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.
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%.
S-21
<PAGE>
Payments of the proceeds from 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
Citicorp may offer the Notes on a continuous basis through the Agents
under the terms of a selling agent agreement dated as of October 27, 1997, as
amended from time to time, between Citicorp and the Agents. Each of the Agents
has agreed to use its reasonable best efforts when requested by Citicorp to
solicit offers to purchase the Notes.
Unless otherwise specified in the Pricing Supplement, the "Agents" are
Bear, Stearns & Co. Inc., Citicorp Securities, Inc., Credit Suisse First Boston
Corporation, Donaldson, Lufkin & Jenrette Securities Corporation, Goldman, Sachs
& Co., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated, PaineWebber Incorporated, Prudential
Securities Incorporated, Salomon Brothers Inc, Smith Barney Inc. and UBS
Securities LLC.
Citicorp will pay each Agent a commission (or grant a discount) ranging
from .125% to 3.00% of the principal amount of each Note, depending on its
Stated Maturity, sold through such Agent. 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. In such event, it
is expected that Citicorp will receive proceeds from the sale of the Notes
within the range set forth on the cover page of this Prospectus Supplement. The
Agents may sell to or through dealers who may resell to investors. The Agents
may pay all or part of their discount or commission to such dealers. The
offering price and other selling terms for such resales may from time to time be
varied by such Agent. Citicorp has reserved the right to sell Notes directly to
investors on its own behalf and to enter into agreements similar to the selling
agent agreement with other parties. No commission will be payable nor will a
discount be allowed on any sales made directly by Citicorp.
Citicorp will have the sole right to accept offers to purchase Notes
and may reject any such offer, in whole or in part. Each Agent will 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 will not list the Notes on any securities exchange, unless
otherwise indicated in the Pricing Supplement. Citicorp gives 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 by this Prospectus Supplement and the Pricing
Supplement without notice.
This Prospectus Supplement and Prospectus may be used by Citicorp
Securities, Inc., a wholly owned subsidiary of Citicorp, in connection with
offers and sales related to secondary market
S-22
<PAGE>
transactions in the Notes. Citicorp Securities, Inc. may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale.
If an affiliate or subsidiary of Citicorp participates in the offer and
sale of the Notes, such participation will comply with the requirements of Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. regarding underwriting securities of an affiliate. No Citicorp affiliate or
subsidiary which is a member of the National Association of Securities Dealers,
Inc. and which is participating in offers and sales of the Notes will execute a
transaction in the Notes in a discretionary account without the prior written
specific approval of the member's customer.
Unless otherwise indicated in the 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, 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.
Citicorp has agreed to indemnify the Agents against and contribute toward
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. Citicorp has agreed to reimburse the Agents for certain expenses.
In addition to offering Notes through the Agents as described in this
Prospectus Supplement, Citicorp may in the future, concurrently with the
offering of the Notes, offer other medium-term notes (but constituting one or
more separate series of notes for purposes of the applicable Indenture) on a
continuing basis in and outside the United States. Such medium-term notes may
include medium-term notes that have terms substantially similar to the terms of
the Notes.
The Agents may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Securities Exchange Act of 1934, as amended. 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.
The Agents each engage in transactions with and perform services for
Citicorp in the ordinary course of business.
S-23
<PAGE>
VALIDITY OF THE NOTES
Stephen E. Dietz, as an Associate General Counsel of Citibank, N.A.,
will pass upon the validity of the Notes for Citicorp. Sullivan & Cromwell, 125
Broad Street, New York, New York 10004, will pass upon the validity of the Notes
for the Agents. 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.
S-24
<PAGE>
GLOSSARY SUPPLEMENT
Page
Agents.................................... S-22
Book-Entry Note........................... S-4
Calculation Agent......................... S-9
Calculation Date.......................... S-8
CD Rate................................... S-12
CD Rate Note.............................. S-7
CMT Rate.................................. S-14
CMT Rate Note............................. S-7
Code...................................... S-17
Commercial Paper Rate..................... S-9
Commercial Paper Rate Note................ S-7
Composite Quotations...................... S-10
Depositary................................ S-4
Designated CMT Telerate Page.............. S-15
Federal Funds Effective Rate.............. S-12
Federal Funds Rate Note................... S-7
Fixed Rate Note........................... S-6
Floating Rate Note........................ S-6
H.15(519)................................. S-10
Indenture................................. S-3
Index Maturity............................ S-10
Initial Interest Rate..................... S-8
Interest Determination Date............... S-8
Interest Payment Date..................... S-6
Interest Period........................... S-6
Interest Reset Date....................... S-8
LIBOR..................................... S-10
LIBOR Note................................ S-7
Market Day................................ S-8
Maturity.................................. S-5
Maximum Interest Rate..................... S-8
Minimum Interest Rate..................... S-8
Money Market Yield........................ S-10
Notes..................................... S-3
OID....................................... S-17
Pricing Supplement........................ S-3
Prime Rate................................ S-13
Prime Rate Note........................... S-7
Reference Dealer.......................... S-14
Regular Record Date....................... S-6
Reuters Screen LIBO Page.................. S-10
Reuters Screen USPRIME1 Page.............. S-13
Senior Indenture.......................... S-3
Senior Notes.............................. S-3
Service................................... S-19
Spread.................................... S-8
Spread Multipler.......................... S-8
Stated Maturity........................... S-5
Subordinated Indenture.................... S-3
Subordinated Notes........................ S-3
Telerate Page 3750........................ S-11
Treasury Notes............................ S-14
Treasury Rate............................. S-11
Treasury Rate Note........................ S-7
United States Holder...................... S-18
Zero-Coupon Notes......................... S-4
S-25
<PAGE>
CITICORP [LOGO]
CITICORP MAY USE THIS PROSPECTUS
TO OFFER -
SENIOR NOTES
SUBORDINATED NOTES
We will provide the specific terms of
these securities in supplements to this
Prospectus. You should read this
Prospectus and the supplements
carefully before you invest.
Neither the Securities and Exchange
Commission, the Commissioner of
Insurance of the State of North
Carolina nor any state securities
commission has approved these
securities. Nor has any such
organization determined that this
prospectus is accurate or complete. Any
representation to the contrary is a
criminal offense.
These securities are not deposits or
savings accounts but are unsecured debt
obligations of Citicorp. These
securities are not insured by the
Federal Deposit Insurance Corporation
or any other governmental agency or
instrumentality.
Citicorp
399 Park Avenue
New York, New York 10043
October 27, 1997
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Citicorp is subject to the information requirements of the Securities
Exchange Act of 1934, as amended. As required by such Act, Citicorp files
annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission ("SEC"). You may read and copy any
Citicorp reports, proxy statements and other information filed with the SEC at
the SEC's Public Reference Room in Washington, D.C. You can also request copies
of these documents, upon payment of a duplicating fee, by writing to the Public
Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the SEC's Public Reference Rooms. Citicorp's SEC
filings are also available to the public on the SEC's Internet site
(http://www.sec.gov). Certain of Citicorp's SEC filings are available to the
public on Citicorp's Internet site (http://www.citicorp.com). Citicorp's common
stock is listed on the New York Stock Exchange, the American Stock Exchange, the
Chicago Stock Exchange and the Pacific Stock Exchange.
The following documents, filed with the SEC by Citicorp pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, are incorporated
by reference in this Prospectus as of their respective filing dates:
o Annual Report and Form 10-K for the fiscal year ended December
31, 1996;
o Financial Reviews and Forms 10-Q for the quarters ended March
31, 1997 and June 30, 1997; and
o Current Reports on Form 8-K dated January 21, 1997, April 15,
1997, July 15, 1997 and October 21, 1997.
All of the following documents which are filed with the SEC pursuant to
the Securities Exchange Act of 1934, as amended, after the date of this
Prospectus and prior to the termination of the offering of the securities
offered by this Prospectus are incorporated by reference into and are a part of
this Prospectus:
o Reports filed by Citicorp pursuant to Sections 13(a) and (c)
of such Act;
o Any definitive proxy or information statements filed pursuant
to Section 14 of such Act in connection with any subsequent
stockholders' meeting; and
o Any reports filed pursuant to Section 15(d) of such Act.
Any statement contained in this Prospectus or in a document incorporated by
reference in this Prospectus is modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document which also is incorporated by reference in
this Prospectus or in the Prospectus Supplement modifies or supersedes such
statement. Any statement so modified or superseded does not, except as so
modified or superseded, constitute a part of this Prospectus.
You should rely only on the information contained in this Prospectus,
any Prospectus Supplement or any Pricing Supplement. Citicorp has not authorized
anyone to provide you with any other information. The information in this
Prospectus, any Prospectus Supplement and any Pricing Supplement is correct only
as of the respective date of each document.
2
<PAGE>
CITICORP
Citicorp, whose principal subsidiary is Citibank, N.A., is a holding
company incorporated under the laws of the State of Delaware on December 4,
1967. The principal office of Citicorp is located at 399 Park Avenue, New York,
New York 10043; its telephone number is (212) 559-1000. Through its subsidiaries
and affiliates, including Citibank, N.A., 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, N.A.
and its other subsidiaries and affiliates. Citicorp's bank subsidiaries are
subject to various legal limitations on the extent to which they may extend
credit, pay dividends or otherwise supply funds to Citicorp. For example, a
national bank subsidiary of Citicorp must obtain the approval of the Office of
the Comptroller of the Currency if its total dividends declared 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, such a bank may not pay
dividends in excess of the bank's undivided profits. Citicorp's 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 a savings association subsidiary may be
required to obtain the approval of the Office of Thrift Supervision if total
dividends declared by the 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 of its subsidiaries upon a subsidiary'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, Citicorp will not have made specific allocations of the
proceeds to such purposes 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.
3
<PAGE>
RATIOS OF INCOME TO FIXED CHARGES
For the nine months ended September 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>
Nine
Months
Ended
September 30, Year Ended December 31,
------------- ------------------------------------------------------
1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Income to Fixed Charges:
Excluding Interest on Deposits 2.51 2.69 2.31 1.76 1.44 1.24
Including Interest on Deposits 1.41 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
Citicorp may use this Prospectus in connection with the offering of its
unsecured debt securities, which may be either senior or subordinated.
Throughout this Prospectus, Citicorp's senior unsecured debt securities are
referred to as "Senior Notes" and its subordinated unsecured debt securities are
referred to as "Subordinated Notes." The Senior Notes and the Subordinated Notes
are together referred to as "Notes." Other capitalized terms are used as defined
in this Prospectus. If terms are not defined in this Prospectus, they have the
meanings assigned to them in the accompanying Prospectus Supplement. Both this
Prospectus and the accompanying Prospectus Supplement contain a Glossary that
lists the page number on which the definition of a term can be found.
The Senior Notes will be issued under an indenture dated as of
September 1, 1989, as amended, between Citicorp and United States Trust Company
of New York, as trustee. Throughout this Prospectus, such Indenture is referred
to as the "Senior Indenture."
The Subordinated Notes will be issued under an indenture dated as of
April 1, 1991, as amended, between Citicorp and The Chase Manhattan Bank
(formerly known as Chemical Bank), as trustee. Throughout this Prospectus, such
Indenture is referred to as the "Subordinated Indenture." The Senior Indenture
and the Subordinated Indenture are each referred to as an "Indenture" and
together are referred to as the "Indentures."
A copy of each of the Indentures is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is a part. This
Prospectus contains a summary of only certain provisions of the Indentures and
is not a complete description of either Indenture. For a complete understanding
of the Notes and the applicable Indenture, we refer you to the applicable
Indenture.
Pursuant to the terms of the Registration Statement of which this
Prospectus forms a part, Citicorp may also offer its preferred stock, common
stock and other securities under such Registration Statement.
4
<PAGE>
General
Each Indenture provides that Citicorp may issue Notes, in addition to
the Notes previously issued under the Indenture, in separate series from time to
time without limitation as to aggregate principal amount, as authorized from
time to time by Citicorp's Board of Directors. (Indentures ss.301). Citicorp may
offer the Notes at prices and on terms determined at the time of sale. The
particular terms of each series of Notes will be set forth in one or more
supplements to this Prospectus (collectively, the "Prospectus Supplement").
The Senior Notes of each series will be unsecured and will rank equally
with all other unsecured and unsubordinated indebtedness of Citicorp. The
Subordinated Notes of each series will be unsecured and will rank equally with
all other unsecured and subordinated indebtedness of Citicorp, other than
subordinated indebtedness which is designated as junior to the Subordinated
Notes.
Citicorp may use this Prospectus to offer series of Notes under
documentation other than and different from the Indentures, so long as the
material provisions of the documentation are 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:
o the title of the Notes and whether they are Subordinated Notes or
Senior Notes;
o any limit on the aggregate principal amount of the Notes;
o whether any of the Notes are to be issuable in global form;
o the price at which the Notes will be issued;
o the date on which the Notes will mature;
o 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;
o 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 interest payment date;
o the person to whom any interest on any Note of such series will be
payable, if other than the person in whose name that Note is
registered at the close of business on the regular record date for
such interest, and the extent to which, or the manner in which, any
interest payable on a global Note on an interest payment date will
be paid;
o 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;
o the periods within which and the 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;
5
<PAGE>
o 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 and the period within which and the price at
which the Notes will be redeemed or purchased, in whole or in part,
pursuant to such obligation, and the other terms and provisions of
such obligation;
o the denominations in which any Notes will be issuable, if other
than denominations of $1,000 and any integral multiple of $1,000;
o the currency or currency units of payment of principal of and any
premium and interest on the Notes, if other than U.S. dollars;
o any index or formula (which may be based on the value of any
currencies, commodities, securities or any group or combination of
the same) used to determine the amount of payments of principal of
and any premium on the Notes;
o if applicable, the fact that the terms of the applicable Indenture
described below under "Defeasance and Covenant Defeasance" will not
apply to such series;
o any additional restrictive covenants included for the benefit of
the holders of such Notes;
o any additional Events of Default provided with respect to such
Notes;
o information with respect to book-entry procedures, if any; and
o any other terms of the Notes consistent with the provisions of the
applicable Indenture.(Indentures ss.301).
Any 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 as provided in the applicable Prospectus Supplement, Citicorp will comply
with any applicable provisions of Section 14(e) of the Securities Exchange Act
of 1934, as amended, and the related rules and regulations in connection with
such redemption or purchase.
Citicorp may issue Notes of any series 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 its stated
maturity. An original issue discount Note provides that upon redemption or
acceleration of its maturity an amount less than the amount payable upon its
stated maturity, as determined in accordance with the terms of such Note, will
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,
Citicorp may issue Notes convertible or exchangeable, at the option of the
holder or Citicorp, into common stock or other securities of Citicorp or another
issuer. Citicorp will describe any applicable conversion or exchange provisions
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
6
<PAGE>
Notes protection in the event of a decline in credit quality resulting from
takeovers, recapitalizations or similar restructurings.
Form, Exchange, Registration and Transfer
Citicorp will issue Notes of a series in registered form. Each
Indenture provides that Citicorp may issue Notes of a series in global form. See
"Global Notes."
Subject to the terms of the applicable Indenture, a holder of Notes of
any series may exchange such Notes for other Notes of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Notes may not be exchanged for bearer Notes. (Indentures ss.305).
Any holder of a Note may present it for exchange as provided above, and
may present Notes for registration of transfer (with the form of transfer duly
executed), at the office of the security registrar or at the office of any
transfer agent designated by Citicorp. Exchange or transfer will be effected
without a service charge and upon payment of any taxes and other governmental
charges as described in the applicable Indenture. The security registrar or
transfer agent, as the case may be, will effect such transfer or exchange when
it is satisfied with the documents of title and identity of the person making
the request. Citicorp has appointed Citibank, N.A. 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. However, Citicorp will be
required to maintain a transfer agent in each place of payment for a series of
Notes. 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 of any series of Notes, Citicorp
will 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; or
(ii) register the transfer of or exchange any Note so selected
for redemption, in whole or in part, except the unredeemed portion of
any Note being redeemed in part. (Indentures ss.305).
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of and any premium and interest on Notes will be payable, subject to
any applicable laws and regulations, at the office of such paying agent or
paying agents as Citicorp designates from time to time. However, at its option,
Citicorp may make payment of any interest by check mailed to the address of the
person entitled to such interest as such address appears in the security
register. (Indentures ss.201). Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on a Note on any interest payment
date will be made to the person in whose name such 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, N.A. in the City of New York will be
designated as a paying agent for Citicorp for payments with respect to Notes of
each series. Any other paying agents initially designated by Citicorp for the
Notes of each series will be named in the applicable Prospectus Supplement.
Citicorp may at any time designate
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additional paying agents or rescind the designation of any paying agent or
approve a change in the office through which any paying agent acts. However,
Citicorp will be required to maintain a paying agent in each place of payment
for a series of Notes. (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 becomes due and payable will be repaid to
Citicorp. After repayment to Citicorp, the holder of such Note or its coupon may
look only to Citicorp for payment of such principal, premium or interest.
(Indentures ss.1003).
Global Notes
If any Notes of a series are issuable in global form, the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such global Note may exchange such
interests for Notes of such series and of like tenor and principal amount in any
authorized form and denomination. Principal of and any premium and interest on
any global Note will be payable in the manner described in the applicable
Prospectus Supplement. (Indentures ss.304).
Limitations on Liens on Stock of Citibank, N.A.
Citicorp has covenanted in the Senior Indenture that, so long as any of
the Senior Notes 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 upon any shares of voting stock
of Citibank, N.A. owned by Citicorp as security for indebtedness for borrowed
money, unless such Senior Notes are secured equally and ratably with, or prior
to, such indebtedness. However, Citicorp may create, incur, assume or suffer to
exist any such mortgage, pledge, security interest or other encumbrance so long
as, after giving effect to the same, Citicorp will own at least 80% of the
voting stock of Citibank, N.A. then issued and outstanding, free and clear of
any such mortgage, pledge, security interest or other encumbrance. (Senior
Indenture ss.1005). The foregoing covenant also applies to the Subordinated
Notes issued prior to the execution of the first supplemental indenture
described below in "Certain Amendments to the Subordinated Indenture," but is
not a provision of the Subordinated Indenture and does not apply to any series
of Subordinated Notes issued since the execution of such first supplemental
indenture.
Defaults; Events of Default
Unless otherwise provided in the applicable Prospectus Supplement, the
following are "Events of Default" under the Senior Indenture with respect to any
series of Senior Notes:
o failure to pay principal of or any premium on any Senior Note
of that series at maturity;
o failure to pay any interest on any Senior Note of that series
when due, continued for 30 days;
o failure to deposit any sinking fund payment, when due, in
respect of any Senior Note of that series;
o 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;
o certain events of bankruptcy, insolvency or reorganization of
Citicorp or Citibank, N.A.; and
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o 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 are "Defaults" under the Subordinated Indenture with respect to any
series of Subordinated Notes:
o failure to pay principal of or any premium on any of the
Subordinated Notes of that series at maturity;
o failure to pay any interest on any Subordinated Note of that
series when due, continued for 30 days;
o failure to perform any other covenant of Citicorp in the
Subordinated Indenture (other than a covenant included in the
Subordinated Indenture solely for the benefit of series of
Subordinated Notes other than that series) continued for 60
days after written notice of such default;
o any Event of Default provided with respect to Subordinated
Notes of that series;
o 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 are "Events of Default" under the Subordinated Indenture with respect
to any series of Subordinated Notes:
o certain events of bankruptcy, insolvency or reorganization of
Citicorp; and
o 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 is continuing with respect to a
series of Subordinated Notes, neither the holders of such Subordinated Notes nor
the trustee under the Subordinated Indenture 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 occurs, or in case a Default
with respect to the Subordinated Notes occurs and is continuing, the trustee has
no obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of Notes of any series or any related
coupons unless such holders offer the trustee reasonable indemnity. (Indentures
ss.ss.601, 603). The holders of a majority in aggregate principal amount of the
outstanding Notes of any series 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 occurs and is 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
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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,
unless the following conditions are met:
o The holder gives to the related trustee written notice of a
continuing Event of Default, or of a continuing Default;
o The holders of at least 25% in aggregate principal amount of
the outstanding Notes of that series make a written request of
the trustee to institute such proceeding as trustee;
o The holders offer reasonable indemnification to the trustee
against the costs, liabilities and expenses of instituting
such proceeding;
o The trustee has not 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
o The trustee has not instituted such proceeding within 60 days
after receipt of the request and offer of indemnification.
(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 the absence of defaults thereunder. (Indentures
ss.1004).
Meetings, Modification and Waiver
Citicorp and the related trustee may make modifications and amendments
of each Indenture 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. However, if the modification or amendment would
result in any of the following events occurring, it may be made only with the
consent of the holders of each outstanding Note affected by the modification or
amendment:
o change the stated maturity of the principal of, or any
installment of principal of or interest on, any Note;
o reduce the principal amount of, or premium or interest on, any
Note;
o change any obligation of Citicorp to pay additional amounts;
o reduce the amount of principal of an original issue discount
Note payable upon acceleration of its maturity;
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o change the coin or currency in which any Note or any premium
or interest is payable;
o impair the right to institute suit for the enforcement of any
payment on or with respect to any Note;
o 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;
o reduce the requirements contained in such Indenture for quorum
or voting;
o change any obligation of Citicorp to maintain an office or
agency in the places and for the purposes required by such
Indenture; or
o modify any of the above provisions. (Indentures ss.902).
Under certain limited circumstances, Citicorp and the related trustee may make
modifications and amendments of such Indenture 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, waive any past default under the applicable
Indenture with respect to Notes of that series. However, such holders may not
waive any past default in the payment of principal of, or any premium or
interest on, any Note of such series or 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 the following principles will be used 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 or are present at a meeting of holders of Notes for
quorum purposes:
o the principal amount of an original issue discount Note that will
be deemed to be outstanding will be the amount of the principal
that would be due and payable as of the date of such determination
upon acceleration of its maturity; and
o the principal amount of a Note denominated in a foreign currency or
currency unit will 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 the clause
above. (Indentures ss.101).
The trustee may call a meeting of the holders of Notes of a series at
any time. The trustee will also call a meeting upon request of Citicorp or the
holders of at least 10% in aggregate principal amount of the outstanding Notes
of such series. In any case, a meeting will be called 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, as
described above, any resolution presented at a meeting or adjourned meeting
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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. However, 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. However, 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 certain conditions are met.
Those conditions are the following:
o the successor corporation must assume Citicorp's obligations
on the Notes of each series and under the applicable
Indenture;
o after giving effect to the merger or transfer, 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 has occurred and is continuing;
o after giving effect to the merger or transfer, with respect to
the Subordinated Notes, no Default, and no event which, after
notice or lapse of time, or both, would become a Default, has
occurred and is continuing; and
o certain other conditions are met. (Indentures ss.801, 802).
Notices
Notices to holders of Notes will be given by mail to the addresses of
such holders as they appear in the security register. (Indentures ss.106).
Title
Citicorp and the related trustee, and any agent of Citicorp or such
trustee, may treat the registered owner of any Note as the absolute owner of
such Note (whether or not such Note or coupon is overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes.
(Indentures ss.308).
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Replacement of Notes and Coupons
Citicorp will replace at the expense of the holder any mutilated Note,
or a Note with a mutilated coupon, upon surrender of such Note to the related
trustee. At the expense of the holder, Citicorp will replace Notes or coupons
that become destroyed, lost or stolen upon delivery to such trustee of evidence
of the destruction, loss or theft of such Notes or coupons satisfactory to
Citicorp and such trustee. In the case of any coupon which becomes destroyed,
lost or stolen, Citicorp will replace such coupon 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, Citicorp and the applicable trustee
may require an indemnity satisfactory to such trustee and Citicorp 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 be released (i) from any and all obligations
with respect to such Notes (subject to the terms of the applicable Indenture)
and/or (ii) from its obligations described above under "Limitations on Liens on
Stock of Citibank, N.A." Such release will occur, in either case, 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 on such Notes. In this
Prospectus, Citicorp's release from obligations as described in clause (i) above
is referred to as "defeasance", and as described in clause (ii) above is
referred to as "covenant defeasance."
As a condition to defeasance or covenant defeasance, Citicorp must
deliver to the related trustee an opinion of counsel to the effect that the
holders of such Notes will not recognize income, gain or loss for United States
federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred. Such opinion, in the
case of defeasance under clause (i) above, must refer to and be based upon a
published ruling of the Internal Revenue Service or changes in applicable United
States federal income tax law occurring after the date of the applicable
Indenture. (Indentures Article Fourteen).
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 Subordinated
Notes issued prior to the execution of the first supplemental indenture
described below in "Certain Amendments to the Subordinated Indenture," may not
be accelerated by reference to the covenant noted under clause (ii) above.
(Senior Indenture ss.1403, original Subordinated Indenture (prior to execution
of first supplemental 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 of Citicorp. In the event that Citicorp defaults in
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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 has been cured or waived or ceases to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) will 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 any of the following, all Senior Indebtedness
(including any interest on Senior Indebtedness accruing after the commencement
of any such proceedings) will first be paid in full before any payment or
distribution under the Subordinated Notes, whether in cash, securities or other
property, will be made to any Subordinated Note holders:
o any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar
proceeding relating to Citicorp, its creditors or its property;
o any proceeding for the liquidation, dissolution or other winding-up
of Citicorp, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings;
o any assignment by Citicorp for the benefit of creditors; or
o any other marshaling of the assets of Citicorp.
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
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, will 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 on Senior
Indebtedness accruing after the commencement of any such proceedings) has been
paid in full. If any payment or distribution under the Subordinated Notes, of
any character whether in cash, securities or other property (other than
securities of Citicorp or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Notes, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued under any such plan of reorganization
or readjustment), is received by any holder of any Subordinated Notes in
contravention of any of the terms of the Subordinated Indenture and before all
the Senior Indebtedness has been paid in full, such payment or distribution or
security will be received in trust for the benefit of, and 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:
o any securities issued under the Subordinated Indenture
(including Subordinated Notes);
o all other unsecured and subordinated indebtedness of Citicorp,
and all other unsecured and subordinated guarantees by
Citicorp of indebtedness of other persons;
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o 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 do not include
traveler's checks or other unsubordinated financial instruments);
and
o 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.
Certain Amendments to the Subordinated Indenture
As of November 27, 1992, the Subordinated Indenture was amended by a
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. It
amended the Subordinated Indenture by removing a restrictive covenant relating
to liens on the stock of Citibank, N.A. and by narrowing the definition of
"Event of Default" to provide that the appointment of a receiver or trustee (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. Therefore, holders of Subordinated Notes
issued prior to the execution of the first supplemental indenture 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 by this Prospectus or issued since the execution
of the first supplemental indenture to demand such payment.
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 trustee under the Senior
Indenture, 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 trustee
under the Subordinated Indenture, 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.
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FOREIGN CURRENCY RISKS
General
Citicorp may offer securities denominated in any foreign currency or
currency unit. Citicorp will provide the specific terms of any security
denominated in a foreign currency at the time of its offering in a supplement to
this Prospectus.
Citicorp does not advise persons who are not residents of the United
States and who are prospective purchasers of securities denominated in a foreign
currency regarding any matters that may affect the purchase or holding of such
securities or the receipt of payments of principal of and any premium and
interest on the same. Such persons should consult their own legal advisors with
regard to such matters.
An investment in securities denominated in a foreign currency entails
significant risks and is not an appropriate investment for an investor who is
not experienced in foreign currency transactions. If you are considering
investing in securities denominated in a foreign currency, you should consult
your own financial and legal advisors as to the risks entailed in such an
investment.
Exchange Rates and Exchange Controls
To invest in securities denominated in a foreign currency entails
significant risks that are not associated with a similar investment in a
security denominated in U.S. dollars. Such risks include the possibility of the
rate of exchange between the U.S. dollar and the relevant foreign currency
changing significantly and the possibility of either the United States or
foreign governments imposing or modifying foreign exchange controls. Such risks
generally depend on economic and political events over which Citicorp has no
control. In recent years, the rates of exchange between the U.S. dollar and
certain foreign currencies have been highly volatile, and they may be highly
volatile in the future. Fluctuations in any particular exchange rate that have
occurred in the past, however, do not necessarily indicate how fluctuations in
the rate may occur during the term of any securities denominated in a foreign
currency. Changes in the exchange rate of the relevant foreign currency against
the U.S. dollar would generally result in changes in the U.S. dollar-equivalent
market value of the security.
PLAN OF DISTRIBUTION
Citicorp may offer and sell the securities directly to one or more
purchasers, through agents designated from time to time or through underwriting
syndicates led by one or more managing underwriters or through one or more
underwriters acting alone. Such underwriters or agents may be affiliates of
Citicorp, and offers and sales of securities may include secondary market
transactions by affiliates of Citicorp. Such affiliates may act as principal or
agent in such transactions. Such transactions will be made at prices related to
prevailing market prices at the time of sale.
Citicorp will set forth in the applicable Prospectus Supplement 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 the 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. 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.
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Citicorp may change from time to time any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers. 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.
Any underwriter or agent participating in the distribution of
securities, including securities offered by this Prospectus, may be deemed to be
an underwriter of those securities under the Securities Act of 1933, as amended,
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. Citicorp may agree to indemnify underwriters, agents
and their controlling persons against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended, in connection with
their participation in the distribution of Citicorp securities.
If an affiliate or subsidiary of Citicorp participates in the offer and
sale of the securities, such participation will comply with the requirements of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. relating to underwriting securities of an affiliate. No Citicorp
affiliate or subsidiary which is a member of the National Association of
Securities Dealers, Inc. and which is 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 and agents participating in the distribution of Citicorp
securities, and their controlling persons, may engage in transactions with and
perform services for Citicorp in the ordinary course of business.
VALIDITY OF SECURITIES
Stephen E. Dietz, as an Associate General Counsel of Citibank, N.A.,
will pass upon the validity of the securities for Citicorp. 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
Citicorp has incorporated by reference the consolidated financial
statements of Citicorp and subsidiaries included in Citicorp's Annual Report and
Form 10-K for 1996 in reliance upon the report set forth in such Annual Report
and Form 10-K 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 No. 112, "Employers' Accounting for
Postemployment Benefits," and Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities."
17
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GLOSSARY
Page
Default .............................................................. 9
Event of Default....................................................... 8, 9
Indenture.............................................................. 4
Notes.................................................................. 4
Prospectus Supplement.................................................. 5
SEC.................................................................... 2
Senior Indebtedness.................................................... 14
Senior Indenture....................................................... 4
Senior Notes........................................................... 4
Subordinated Indenture................................................. 4
Subordinated Notes..................................................... 4
18
