<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-51201
October 29, 1998 Supplement
to May 6, 1998 Prospectus
CITIGROUP INC.
399 Park Avenue
New York, New York 10043
(212) 559-1000
$450 MILLION
FLOATING RATE SENIOR NOTES DUE
FEBRUARY 3, 2000
- ------------------------------
The Floating Rate Senior Notes due February 3, 2000 of Citigroup Inc. offered
hereby will bear interest at LIBOR plus .1%. Interest on the Notes is payable
quarterly on February 3, May 3, August 3 and November 3 of each year, commencing
February 3, 1999. The Notes are not redeemable prior to maturity.
- - Price to the public: 99.9695% (or $449,862,750 for all the Notes)
- - Underwriting discounts and commissions: 0.0305% (or $137,250 for all the
Notes)
- - Net proceeds to the Company: 99.9390% (or $449,725,500 for all the Notes),
before deduction of the Company's expenses, estimated at $75,000
The Company does not intend to list the Notes on a national securities exchange.
We expect that the Notes will be ready for delivery in book-entry form only
through The Depository Trust Company, on or about November 3, 1998.
UNDERWRITTEN BY
SALOMON SMITH BARNEY
- ------------------------------
NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES OR INSURANCE
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE NOTES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE UNSECURED DEBT
OBLIGATIONS OF THE COMPANY AND ARE NOT INSURED
<PAGE>
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
<PAGE>
CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT
Capitalization................... S-3
Ratio of Income to Fixed
Charges........................ S-4
Use of Proceeds.................. S-4
Description of Notes............. S-4
Underwriting..................... S-7
Legal Opinions................... S-7
PROSPECTUS.......................
Available Information............ 2
Incorporation of Certain
Documents by Reference......... 3
The Company...................... 3
Ratio of Earnings to Fixed
Charges........................ 4
Use of Proceeds.................. 4
Description of Securities........ 4
Plan of Distribution............. 10
ERISA Matters.................... 12
Legal Matters.................... 12
Experts.......................... 12
</TABLE>
S-2
<PAGE>
CAPITALIZATION
The following table sets forth the supplemental consolidated capitalization
of the Company at June 30, 1998, after giving retroactive effect to the merger
with Citicorp on October 8, 1998 in a transaction accounted for as a pooling of
interests, and as adjusted to give effect to (i) the isssuance and sale of
additional long-term debt of the Company and certain of its subsidiaries after
June 30, 1998 through the date hereof, including the issuance of $27,000,000
aggregate principal amount of notes of a subsidiary of the Company expected to
close on October 30, 1998, (ii) the conversion, on October 14, 1998, of $140
million face amount of the Series I Cumulative Convertible Preferred Stock of
the Company into shares of common stock of the Company, (iii) the redemption on
August 18, 1998 of all of the outstanding shares of Graduated Rate Cumulative
Preferred Stock, Series 8A, of Citicorp, (iv) the redemption on September 1,
1998 of all of the outstanding shares of 7.50% Noncumulative Preferred Stock,
Series 17, of Citicorp, and (v) the issuance and sale of the Notes.
<TABLE>
<CAPTION>
AT JUNE 30, 1998
------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Debt:
Investment banking and brokerage borrowings.......................................... $ 18,682 $ 17,961
Short-term borrowings................................................................ 14,781 14,863
Long-term debt....................................................................... 49,533 51,034
----------- -----------
Total debt......................................................................... 82,996 83,858
----------- -----------
Redeemable Preferred Stock-Series I.................................................... 280 140
----------- -----------
Company or subsidiary obligated mandatorily redeemable preferred securities of
subsidiary trusts holding solely junior subordinated debt securities of --
Company.............................................................................. 1,200 1,200
Subsidiaries......................................................................... 2,620 2,620
Stockholders' equity:
Preferred stock at aggregate liquidation value....................................... 2,725 2,313
Common stock and additional paid-in capital (net of treasury stock).................. 5,419 5,559
Retained earnings.................................................................... 35,447 35,447
Accumulated other changes in equity from nonowner sources............................ 893 893
Unearned compensation................................................................ (573) (573)
----------- -----------
Total stockholders' equity......................................................... 43,911 43,639
----------- -----------
Total capitalization................................................................. $ 131,007 $ 131,457
----------- -----------
----------- -----------
</TABLE>
S-3
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RATIO OF INCOME TO FIXED CHARGES
The following table sets forth the supplemental consolidated ratio of income
to fixed charges of the Company at June 30, 1998 and for each of the five most
recent fiscal years, after giving retroactive effect to the merger with Citicorp
on October 8, 1998 in a transaction accounted for as a pooling of interests.
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994
--------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of income to fixed charges (excluding interest on
deposits).................................................... 1.84 1.71 1.88 1.65 1.41
<CAPTION>
1993
---------
<S> <C>
Ratio of income to fixed charges (excluding interest on
deposits).................................................... 1.43
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994
--------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of income to fixed charges (including interest on
deposits).................................................... 1.51 1.43 1.51 1.39 1.25
<CAPTION>
1993
---------
<S> <C>
Ratio of income to fixed charges (including interest on
deposits).................................................... 1.25
</TABLE>
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Notes
will be used for general corporate purposes, which may include capital
contributions to subsidiaries of the Company and/or the reduction or refinancing
of borrowings of the Company or its subsidiaries. The Company expects that it
will incur additional indebtedness in the future.
DESCRIPTION OF NOTES
ON OCTOBER 8, 1998 CITICORP, A DELAWARE CORPORATION, WAS MERGED INTO A
WHOLLY OWNED SUBSIDIARY OF THE COMPANY AND THE COMPANY CHANGED ITS NAME FROM
TRAVELERS GROUP INC. TO CITIGROUP INC.
THE FOLLOWING DESCRIPTION OF THE TERMS OF THE NOTES (REFERRED TO IN THE
PROSPECTUS AS THE "OFFERED SECURITIES") SUPPLEMENTS THE DESCRIPTION OF THE
GENERAL TERMS SET FORTH IN THE PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS
MADE. THE FOLLOWING SUMMARY OF THE NOTES IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH DESCRIPTION AND TO THE INDENTURE REFERRED TO THEREIN.
GENERAL
The Notes will be limited to $450,000,000 in aggregate principal amount, as
a result of which, as of October 29, 1998, $1,550,000,000 aggregate principal
amount of debt securities remains currently available to be offered by the
Company under the Registration Statements of which this Prospectus Supplement
and the accompanying Prospectus form a part. The Notes will be issued only in
fully registered form without coupons, in denominations of $1,000 and integral
multiples thereof. Initially, the Notes will be issued in the form of one or
more global notes (each, a "Book-Entry Note") registered in the name of DTC or
its nominee, as described below. The Notes will bear interest from November 3,
1998 and will mature on February 3, 2000. Interest will be payable quarterly on
February 3, May 3, August 3 and November 3 (each, an "Interest Payment Date"),
commencing February 3, 1999, to the persons in whose names the Notes are
registered at the close of business on the Business Day next preceding the
related Interest Payment Date. The period commencing on an Interest Payment Date
and ending on the day preceding the next succeeding Interest Payment Date is
called an "Interest Period." "Business Day" means any day other than a Saturday,
a Sunday or a day on which banking institutions in The City of New York are
authorized or obligated by law, executive order or governmental decree to be
closed. The Notes will not be redeemable prior to maturity and will not be
subject to any sinking fund requirement.
Principal of and interest on the Notes will be payable at the office or
agency of the Company to be maintained in the Borough of Manhattan, The City of
New York, initially at the principal corporate trust office of the Trustee, 101
Barclay Street, Corporate Trust Services Window, Lobby Level, New York, New
S-4
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York; PROVIDED, HOWEVER, that at the option of the Company, payment of interest
may be made by check mailed to the address of the person entitled thereto as
such address shall appear in the register of holders of Notes. Notwithstanding
the foregoing, payments of principal of and interest on Book-Entry Notes will be
made as described below.
The Indenture permits the defeasance of Securities or the defeasance of
certain of the Company's obligations under the Indenture upon the satisfaction
of the conditions described under "Description of Securities--Defeasance" in the
Prospectus. The Notes are subject to these defeasance provisions.
INTEREST RATE DETERMINATION
The Notes will bear interest for each Interest Period at a per annum rate
(the "Interest Rate") determined by The Bank of New York, or its successor
appointed by the Company as permitted by the Indenture, acting as calculation
agent (the "Calculation Agent"). The Interest Rate will be equal to LIBOR (as
defined below) on the second London Business Day (as defined below) immediately
preceeding the first day of such Interest Period (each, an "Interest
Determination Date") plus .1%, provided, however, that in certain circumstances
described below, the Interest Rate will be determined in an alternative manner
without reference to LIBOR. Promptly upon such determination, the Calculation
Agent will notify the Trustee of the Interest Rate for the new Interest Period.
The Interest Rate determined by the Calculation Agent, absent manifest error,
shall be binding and conclusive upon the beneficial owners and holders of the
Notes, the Company and the Trustee.
For purposes of this calculation, "London Business Day" is defined as a day
on which dealings in deposits in U.S. dollars are transacted, or with respect to
any future date, are expected to be transacted, in the London interbank market.
"LIBOR" for any Interest Determination Date will be the offered rate for
deposits in U.S. dollars having an index maturity of three months for a period
commencing on the second London Business Day immediately following the Interest
Determination Date (a "Three Month Deposit") in amounts of not less than
$1,000,000, as such rate appears on Bridge Telerate Page 3750 (as defined
below), or a successor reporter or such rates selected by the Calculation Agent
and acceptable to the Company, at approximately 11:00 a.m., London time, on the
Interest Determination Date (a "Reported Rate").
"Bridge Telerate Page 3750" means the display designated on page "3750" on
Telerate (or such other page as may replace the 3750 page on that service or
such other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. Dollar deposits).
If the following circumstances exist on any Interest Determination Date, the
Calculation Agent shall determine the Interest Rate for the Notes as follows:
(i) In the event no Reported Rate appears on Bridge Telerate Page 3750
as of approximately 11:00 a.m. London time on an Interest Determination
Date, the Calculation Agent shall request the principal London offices of
each of four major banks in the London interbank market selected by the
Calculation Agent (after consultation with the Company) to provide a
quotation of the rate (a "Rate Quotation") at which Three Month Deposits in
amounts of not less than $1,000,000 are offered by it to prime banks in the
London interbank market, as of approximately 11:00 a.m. London time on such
Interest Determination Date, that is representative of single transactions
at such time ("Representative Amounts"). If at least two Rate Quotations are
provided, the Interest Rate will be the arithmetic mean of the Rate
Quotations obtained by the Calculation Agent, plus .1%.
(ii) In the event no Reported Rate appears on Bridge Telerate Page 3750
and there are fewer than two Rate Quotations, the Interest Rate 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 New
York City, selected by the Calculation Agent, for loans in Representative
Amounts in
S-5
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U.S. dollars to leading European banks, having an index maturity of three
months for a period commencing on the second London Business Day immediately
following such Interest Determination Date, plus .1%; provided, however,
that if fewer than three banks selected by the Calculation Agent are quoting
such rates, the Interest Rate for the applicable period will be the same as
the Interest Rate in effect for the immediately preceding Interest Period.
Upon the request of the holder of any Note, the Calculation Agent will
provide to such holder the Interest Rate in effect on the date of such request
and, if determined, the Interest Rate for the next Interest Period.
Interest on the Notes will be calculated on the basis of the actual number
of days for which interest is payable in the relevant Interest Period, divided
by 360. All dollar amounts resulting from such calculation will be rounded, if
necessary, to the nearest cent with one-half cent rounded upward.
BOOK-ENTRY NOTES
The Notes will initially be issued in the form of one or more Book-Entry
Notes, which will be deposited with, or on behalf of, the Depository Trust
Company ("DTC") and registered in the name of DTC or its nominee. Except as set
forth below, Book-Entry Notes may not be transferred except as a whole by DTC to
a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by
DTC or any nominee to a successor of DTC or a nominee of such successor.
Principal and interest payments on the Notes represented by one or more
Book-Entry Notes will be made by the Company to DTC or its nominee, as the case
may be, as the registered owner of the related Book-Entry Note or Notes. The
Company expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of Book-Entry Notes, will credit immediately
the accounts of the related participants with payment in amounts proportionate
to their respective holdings in principal amount of beneficial interests in such
Book-Entry Notes as shown on the records of DTC. Neither the Company nor the
Trustee or any Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of Book-Entry Notes, or for maintaining, supervising or
reviewing any records relating to such beneficial interests. The Company also
expects that payments by participants to owners of beneficial interests in
Book-Entry Notes held through such participants will be governed by standing
customer instructions and customary practices, as is the case with securities
registered in "street name." Such instructions will be the responsibility of
such participants.
If DTC is at any time unwilling, unable or ineligible to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Notes in certificated form in exchange for
beneficial interests in the Book-Entry Notes. In addition, the Company may at
any time determine not to have its Notes represented by one or more Book-Entry
Notes, and, in such event, will issue Notes in certificated form in exchange for
beneficial interests in Book-Entry Notes. In any such instance, an owner of a
beneficial interest in a Book-Entry Note will be entitled to physical delivery
in certificated form of Notes equal in principal amount to such beneficial
interest and to have such Notes registered in its name. Notes so issued in
certificated form will be issued in denominations of $1,000 or any amount in
excess thereof that is an integral multiple of $1,000 and will be issued in
registered form only, without coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriter in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds.
The Notes are expected to trade in the Same-Day Funds Settlement System of
DTC until maturity, and, to the extent that secondary market trading activity in
the Notes is effected through the facilities of DTC, such trades will be settled
in immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Notes.
S-6
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UNDERWRITING
Subject to the terms and conditions set forth in the Terms Agreement dated
October 29, 1998, which incorporates by reference the Underwriting Agreement
Basic Provisions dated January 12, 1993 (together, the "Underwriting
Agreement"), the Company has agreed to sell to Salomon Smith Barney Inc. (the
"Underwriter"), and the Underwriter has agreed to purchase, all of the Notes.
The Underwriting Agreement provides that the obligations of the Underwriter
to pay for and accept delivery of the Notes are subject to the approval of
certain legal matters by its counsel and to certain other conditions. The
Underwriter is committed to take and pay for all of the Notes if any are taken.
The Underwriter proposes to offer part of the Notes directly to the public
at the public offering price set forth on the cover page hereof. The Underwriter
may allow certain dealers, and such dealers may reallow, a concession not in
excess of the underwriting discount. After the public offering, the public
offering price may be changed by the Underwriter.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Underwriter may engage in over-allotment, stabilizing transactions and
covering transactions in accordance with Regulation M under the Securities
Exchange Act of 1934, as amended. Over-allotment involves sales in excess of the
offering size, which creates a short position for the Underwriter. Stabilizing
transactions involve bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Covering transactions
involve purchases of the Notes in the open market after the distribution has
been completed in order to cover short positions. Such stabilizing transactions
and covering transactions may cause the price of the Notes to be higher than it
would otherwise be in the absence of such transactions.
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriter that it presently
intends to make a market in the Notes, as permitted by applicable laws and
regulations. The Underwriter is not obligated, however, to make a market in the
Notes and any such market making may be discontinued at any time at the sole
discretion of the Underwriter. Accordingly, no assurance can be given as to the
liquidity of, or trading markets for, the Notes.
The Underwriter is a subsidiary of the Company. Accordingly, the offering of
the Notes will conform with the requirements set forth in Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc.
This Prospectus Supplement, together with the Prospectus, may also be used
by the Underwriter or certain other subsidiaries or affiliates of the Company
(the "Citigroup Subsidiaries") in connection with offers and sales of the Notes
in market-making transactions at negotiated prices related to prevailing market
prices at the time of sale. Any Citigroup Subsidiary may act as principal or
agent in such transactions.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for the Company
by Stephanie B. Mudick, counsel for the Company, 399 Park Avenue, New York, New
York 10043 and for the Underwriter by Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, New York 10019-6092. Ms. Mudick, General Counsel-Corporate
of the Company, beneficially owns, or has rights to acquire under the Company's
employee benefit plans, an aggregate of less than 1% of the common stock of the
Company. Dewey Ballantine LLP has from time to time acted as counsel for the
Company and certain of its subsidiaries and may do so in the future. A member of
Dewey Ballantine LLP participating in this matter is the beneficial owner of
shares of the Company's common stock.
S-7
<PAGE>
PROSPECTUS
TRAVELERS GROUP INC.
DEBT SECURITIES
------------------
Travelers Group Inc. (the "Company") may offer from time to time its debt
securities (the "Securities"), on terms to be determined at the time of sale, at
an aggregate initial offering price not expected to exceed $2,000,000,000 or its
equivalent in foreign currencies or composite currencies based on the applicable
exchange rate at the time of offering. The Securities may be issued in one or
more series with the same or various maturities. The specific designation, the
aggregate principal amount, the maturity, the purchase price, the denominations,
the currency, the rate (which may be fixed or variable) and time of payment of
any interest, any sinking fund, any terms of redemption at the option of the
Company or the holder, and other specific terms of the Securities in respect of
which this Prospectus is being delivered (the "Offered Securities") are set
forth in an accompanying prospectus supplement (the "Prospectus Supplement"),
together with the terms of offering of the Offered Securities.
The Offered Securities sold by the Company will be sold directly, or through
agents designated from time to time or through underwriters or dealers, which
may be a group of underwriters represented by one or more firms. If any agents
of the Company or any underwriters are involved in the sale by the Company of
Offered Securities, the names of such agents or underwriters and any applicable
fee, commission, purchase price or discount arrangements with them will be set
forth, or will be calculable from the information set forth, in the Prospectus
Supplement. The net proceeds to the Company from such sale will be set forth in
the Prospectus Supplement. The Company may also sell Offered Securities directly
to investors on its own behalf. This Prospectus, together with an appropriate
Prospectus Supplement, may also be used by Salomon Brothers Inc, Smith Barney
Inc. and any broker-dealer subsequently acquired directly or indirectly by the
Company (including any successor thereto, the "Broker-Dealer Subsidiaries"),
each an affiliate of the Company, in connection with offers and sales of the
Offered Securities in market-making transactions at negotiated prices related to
prevailing market prices at the time of sale. Any Broker-Dealer Subsidiary may
act as principal or agent in such transactions.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
May 6, 1998
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OFFERED
HEREBY, INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE COVERING
TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "PLAN OF DISTRIBUTION."
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, AGENT
OR DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT
NOR ANY SALE MADE THEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ITS
SUBSIDIARIES SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS AND ANY RELATED
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE SUCH
OFFER WOULD BE UNLAWFUL.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at: Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and Seven World Trade Center, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission also maintains a site on the World Wide Web, the address
of which is http://www.sec.gov, that contains reports, proxy statements and
information statements and other information regarding issuers, such as the
Company, that file electronically with the Commission. The Company's Common
Stock is listed on the New York Stock Exchange, Inc. (the "NYSE") and the
Pacific Exchange, Inc. (the "PCX"), and such reports, proxy statements and other
information can also be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005, and the PCX, 301 Pine Street, San Francisco,
California 94104, and 233 South Beaudry Avenue, Los Angeles, California 90012.
The Company has filed with the Commission Registration Statements on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Offered Securities. This Prospectus does not contain all the
information set forth in the Registration Statements, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Offered Securities, reference is made to
the Registration Statements and exhibits thereto. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or document filed as an exhibit to the Company's Registration
Statements, each such statement being qualified in all respects by such
reference.
2
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates by reference the following documents heretofore
filed with the Commission pursuant to the Exchange Act:
1. Annual Report of the Company on Form 10-K for the fiscal year ended
December 31, 1997.
2. Current Reports of the Company on Form 8-K dated January 6, 1998,
January 26, 1998, February 17, 1998, April 6, 1998, April 8, 1998 and April
20, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the later of (i) the termination of offering of Offered Securities hereby and
(ii) the date on which any Broker-Dealer Subsidiary ceases offering and selling
Offered Securities pursuant to this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
in an accompanying Prospectus Supplement or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus except as
so modified or superseded.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference in the
Registration Statements of which this Prospectus forms a part other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents. Requests should be directed to Corporate
Communications and Investor Relations, Travelers Group Inc., 388 Greenwich
Street, New York, New York 10013; telephone (212) 816-8000.
RECENT DEVELOPMENTS
On April 6, 1998, the Company and Citicorp announced that they entered into
a definitive agreement to combine in a merger of equals. Pursuant to the merger
agreement, each outstanding share of common stock, par value $1.00 per share, of
Citicorp will be converted into the right to receive 2.5 shares of common stock,
$.01 par value per share, of the Company and each share of preferred stock of
Citicorp will be converted into a share of a substantially identical series of
preferred stock of the Company. The transaction, which is expected to be
completed during the third quarter of 1998, is subject to various regulatory
approvals, including approval by the Federal Reserve Board. The transaction is
also subject to approval by the stockholders of each of the Company and
Citicorp. The transaction will be a tax-free exchange and is expected to be
accounted for on a "pooling of interests" basis. Information about Citicorp is
included in its periodic reports and other materials filed with the Commission.
THE COMPANY
The Company is a diversified financial services holding company engaged,
through its subsidiaries, principally in four business segments: Investment
Services, including Asset Management, Consumer Finance Services, Property &
Casualty Insurance Services and Life Insurance Services.
The Company's Investment Services segment consists of investment banking,
securities and commodities trading, asset management, brokerage and other
financial services provided through subsidiaries of Salomon Smith Barney
Holdings Inc. The Company's Consumer Finance Services segment includes consumer
lending services conducted primarily under the name "Commercial Credit," as well
as credit-related insurance and credit card services. The Company's Property &
Casualty Insurance Services segment includes the operations of Travelers
Property Casualty Corp., an 83% owned subsidiary of the
3
<PAGE>
Company, and its subsidiary and affiliated property-casualty companies, which
provide a wide range of commercial and personal property and casualty insurance
products and services to businesses, government units, associations and
individuals. The Company's Life Insurance Services segment includes individual
life insurance, annuities and pension programs which are offered primarily
through The Travelers Insurance Company, The Travelers Life and Annuity Company
and the Primerica Financial Services group of companies, including Primerica
Life Insurance Company.
In addition to its four business segments, the Company's Corporate and Other
segment consists of unallocated expenses and earnings primarily related to
interest, corporate administration, and certain corporate investments.
The principal offices of the Company are located at 388 Greenwich Street,
New York, New York 10013, telephone (212) 816-8000.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1997 1996 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Ratio of earnings to fixed charges............................................ 1.43 1.55 1.35 1.13
<CAPTION>
1993
---------
<S> <C>
Ratio of earnings to fixed charges............................................ 1.42
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings from continuing operations before income taxes and fixed charges by the
fixed charges. For purposes of these ratios, earnings available for fixed
charges consist of pre-tax income from continuing operations adjusted for
undistributed earnings of investees carried on the equity basis of accounting
and minority interest and fixed charges; and fixed charges consist of interest
expense and that portion of rentals deemed representative of the appropriate
interest factor.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement with
respect to the proceeds from the sale of the particular Offered Securities, the
Company intends to apply the net proceeds from the sale of the Offered
Securities for general corporate purposes, which may include capital
contributions to subsidiaries of the Company and/or the reduction or refinancing
of borrowings of the Company or its subsidiaries.
DESCRIPTION OF SECURITIES
The following description of the terms of the Securities sets forth certain
general terms and provisions of the Securities to which any Prospectus
Supplement may relate. The particular terms of any Offered Securities and the
extent, if any, to which such general provisions may apply to the Securities so
offered will be described in the Prospectus Supplement relating to such
Securities.
The Securities will be issued under an indenture, between the Company and a
trustee, that has been or will be filed as an exhibit to or incorporated by
reference in the Registration Statements of which this Prospectus forms a part
or to which it relates. Unless otherwise indicated in an accompanying Prospectus
Supplement, the Securities will be issued under an Indenture dated as of March
15, 1987, between Primerica Corporation, a New Jersey corporation ("old
Primerica"), and The Bank of New York, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of December 15, 1988,
among old Primerica, Primerica Holdings, Inc. ("Primerica Holdings") and the
Trustee, the Second Supplemental Indenture dated as of January 31, 1991, between
Primerica Holdings and the Trustee and the Third Supplemental Indenture dated
December 9, 1992, among Primerica Holdings, the Company (f/k/a Primerica
Corporation) and the Trustee (the indenture as so supplemented is hereinafter
referred to as the "Indenture"). The following summary of the Indenture does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the Indenture, a copy of which has been incorporated by
4
<PAGE>
reference or filed as an exhibit to the Registration Statements of which this
Prospectus forms a part or to which it relates. Capitalized terms used and not
otherwise defined in this section shall have the meanings assigned to them in
the Indenture. Parenthetical section references refer to sections of the
Indenture.
GENERAL
The Securities will be unsecured general obligations of the Company. As a
holding company, the Company's sources of funds are derived principally from
sales of assets and investments, and advances and dividends from subsidiaries,
certain of which are subject to regulatory considerations. The Indenture
provides that the Securities and other unsecured debt securities of the Company,
without limitation as to aggregate principal amount, may be issued in one or
more series, and a single series may be issued at various times, with different
maturity dates and different interest rates, in each case as authorized from
time to time by the Company.
One or more series of the Securities may be issued with the same or various
maturities at par or at a discount. Federal income tax consequences and other
special considerations applicable to any Securities issued by the Company at a
discount ("Original Issue Discount Securities") will be described in the
Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement relating to Offered
Securities for the following terms thereof, where applicable:
(1) the designation of the Offered Securities;
(2) any limit on the aggregate principal amount of the Offered
Securities;
(3) the percentage of the principal amount representing the price for
which the Offered Securities shall be issued;
(4) the date or dates on which the principal of the Offered Securities
shall be payable;
(5) the rate or rates per annum (which may be fixed or variable) at
which the Offered Securities shall bear interest, if any, or the method by
which such rate or rates shall be determined;
(6) the date or dates from which any such interest shall accrue, or the
method by which such date or dates shall be determined, and the date or
dates on which any such interest shall be payable and any record dates
therefor;
(7) if other than in United States dollars, the currency or currency
unit in which payment of principal of, premium, if any, and interest on the
Offered Securities shall be payable;
(8) if the amount of payment of principal of, premium, if any, or any
interest on the Offered Securities may be determined with reference to an
index or formula based on a currency or currency unit other than that in
which the Offered Securities are stated to be payable, the manner in which
such amounts shall be determined;
(9) if the principal of, premium, if any, or any interest on the Offered
Securities is to be payable at the election of the Company or a holder
thereof in a currency or currency unit other than that in which the Offered
Securities are stated to be payable, the periods within which and the terms
upon which such election may be made;
(10) the place or places where the principal of, premium, if any, and
any interest on the Offered Securities shall be payable;
(11) the price or prices at which, the period or periods within which
and the terms and conditions upon which the Offered Securities may be
redeemed, in whole or in part, at the option of the Company;
5
<PAGE>
(12) the obligation, if any, of the Company to redeem, purchase or repay
the Offered Securities pursuant to any sinking fund or analogous provision
or at the option of a holder thereof and the period or periods within which,
the price or prices at which and the terms and conditions upon which the
Offered Securities shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(13) if other than the principal amount thereof, the portion of the
principal amount of the Offered Securities payable upon declaration of
acceleration of the maturity of the Offered Securities;
(14) provisions, if any, for the discharge of the Company's indebtedness
and obligations or termination of certain of its obligations under the
Indenture with respect to the Offered Securities by deposit of funds or
United States government obligations;
(15) whether the Offered Securities are to be issued in whole or in part
in the form of a Global Security and the terms and conditions, if any, upon
which such Global Security or Securities may be exchanged in whole or in
part for other definitive Securities;
(16) the date as of which any Global Security shall be dated if other
than the original issuance of the first Offered Security to be issued; and
(17) any other terms of the Offered Securities not inconsistent with the
provisions of the Indenture (SECTION 2.02).
Under the Indenture, the Company may authorize the issuance and provide the
terms of a series of Securities pursuant to a supplemental indenture or pursuant
to a resolution of its Board of Directors, any duly authorized committee of the
Board or any committee of officers or other representatives of the Company duly
authorized by the Board of Directors for such purpose. The provisions of the
Indenture described above provide the Company with the ability, in addition to
the ability to issue Securities with terms different from those of Securities
previously issued, to "reopen" a previous issue of a series of Securities and to
issue additional Securities of such series.
The Securities will be issued only in registered form. Securities of a
series may be issuable in the form of one or more Global Securities, as
described below under "Global Securities." Unless otherwise provided in the
Prospectus Supplement accompanying this Prospectus, Securities denominated in
United States dollars will be issued only in denominations of $1,000 and
integral multiples thereof (Section 2.01). The Prospectus Supplement relating to
Offered Securities denominated in a foreign or composite currency will specify
the denomination thereof (SECTION 2.02).
The Securities may be presented for exchange, and Securities (other than a
Global Security) may be presented for registration of transfer at the principal
corporate trust office of the Trustee in The City of New York. No service charge
will be made for any registration of transfer or exchange of Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. All Securities presented
for registration of transfer or exchange shall (if so required by the Company or
the Trustee) be duly endorsed by, or accompanied by a written instrument or
instruments of transfer (in form satisfactory to the Company and the Trustee)
duly executed by, the registered holder or his attorney duly authorized in
writing (SECTION 2.05).
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, on the Securities (other than a
Global Security) will be made in the designated currency against surrender of
such Securities at the principal corporate trust office of the Trustee in The
City of New York. Unless otherwise indicated in the Prospectus Supplement,
payment of any installment of interest on Securities will be made to the person
in whose name such Security is registered at the close of business on the Record
Date for such interest. Unless otherwise indicated in the Prospectus Supplement,
payments of such interest will be made at the principal corporate
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<PAGE>
trust office of the Trustee in The City of New York, or by a check mailed to the
holder at such holder's registered address (SECTIONS 2.01 AND 5.02).
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in the form of
one or more Global Securities that will be deposited with, or on behalf of, a
depository identified in the Prospectus Supplement relating to such series
(SECTION 1.02).
The specific terms of the depository arrangement with respect to a series of
Offered Securities will be described in the Prospectus Supplement relating to
such series. Unless otherwise indicated in any accompanying Prospectus
Supplement, the following provisions will apply to any depository arrangements.
Global Securities will be deposited with, or on behalf of, The Depository
Trust Company ("DTC") and registered in the name of DTC or its nominee. Except
as set forth below or in an accompanying Prospectus Supplement, Global
Securities may not be transferred except as a whole by DTC to a nominee of DTC
or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee
to a successor of DTC or a nominee of such successor.
DTC has advised the Company that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for persons that have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of certificates. DTC's participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations,
some of which (and/or their representatives) own DTC. Access to DTC'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. Persons who are not participants may
beneficially own interests in securities held by DTC only through participants.
Upon the issuance by the Company of a Global Security, DTC will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the Securities represented by such Global Security to the accounts of
participants. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests in Global Securities will be shown on, and the
transfer of such interests will be effected only through, records maintained by
DTC or its nominee (with respect to beneficial interests of participants) or by
participants or persons that may hold interests through participants (with
respect to beneficial interests of beneficial ownership). The laws of some
states may require that certain purchasers of securities take physical delivery
of such securities in certificated form. Such limits and such laws may impair
the ability to transfer beneficial interests in Global Securities.
So long as DTC or its nominee is the registered owner of the Global
Securities, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the Securities represented by such Global Securities for all
purposes under the Indenture. Except as provided in an accompanying Prospectus
Supplement, owners of beneficial interests in Global Securities will not be
entitled to have Securities represented by such Global Securities registered in
their names, will not receive or be entitled to receive physical delivery of
such Securities in certificated form and will not be considered the owners or
holders thereof under the Indenture.
COVENANTS
LIMITATIONS ON LIENS. The Company has agreed that it will not, and will not
permit any Subsidiary to, incur, issue, assume or guarantee any indebtedness for
money borrowed if such indebtedness is secured by
7
<PAGE>
a pledge of, lien on, or security interest in any shares of Voting Stock of any
Significant Subsidiary, whether such Voting Stock is now owned or is hereafter
acquired, without providing that each series of Securities issued under the
Indenture (together with, if the Company shall so determine, any other
indebtedness or obligations of the Company or any Subsidiary ranking equally
with such Securities and then existing or thereafter created) shall be secured
equally and ratably with such indebtedness. The foregoing limitation shall not
apply to indebtedness secured by a pledge of, lien on or security interest in
any shares of Voting Stock of any corporation at the time it becomes a
Significant Subsidiary (SECTION 5.04).
LIMITATIONS ON MERGERS AND SALES OF ASSETS. The Company has agreed that it
will not enter into a merger or consolidation with another corporation or sell
other than for cash or lease all or substantially all its assets to another
corporation, or purchase all or substantially all the assets of another
corporation unless (i) either the Company is the continuing corporation, or the
successor corporation (if other than the Company) expressly assumes by
supplemental indenture the obligations evidenced by the securities issued
pursuant to the Indenture (in which case, except in the case of such a lease,
the Company will be discharged therefrom) and (ii) immediately thereafter, the
Company or the successor corporation (if other than the Company) would not be in
default in the performance of any covenant or condition of the Indenture
(SECTIONS 5.05 AND 14.01).
CERTAIN DEFINITIONS. The term "Significant Subsidiary" means a Subsidiary,
including its Subsidiaries, which meets any of the following conditions: (i) the
Company's and its other Subsidiaries' investments in and advances to the
Subsidiary exceed 10 percent of the total assets of the Company and its
Subsidiaries consolidated as of the end of the most recently completed fiscal
year; (ii) the Company's and its other Subsidiaries' proportionate share of the
total assets (after intercompany eliminations) of the Subsidiary exceeds 10
percent of the total assets of the Company and its Subsidiaries consolidated as
of the end of the most recently completed fiscal year; or (iii) the Company's
and its other Subsidiaries' equity in the income from continuing operations
before income taxes, extraordinary items and cumulative effect of a change in
accounting principles of the Subsidiary exceeds 10 percent of such income of the
Company and its Subsidiaries consolidated for the most recently completed fiscal
year. The term "Subsidiary" means any corporation of which securities entitled
to elect at least a majority of the corporation's directors shall at the time be
owned, directly or indirectly, by the Company, or one or more Subsidiaries, or
by the Company and one or more Subsidiaries. The term "Voting Stock" means
capital stock the holders of which have general voting power under ordinary
circumstances to elect at least a majority of the board of directors of a
corporation, provided that, for the purposes of such definition, capital stock
which carries only the right to vote conditioned on the happening of an event
shall not be considered voting stock whether or not such event shall have
happened (SECTIONS 1.02 AND 5.04).
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
without the consent of the holders of the Securities, to establish, among other
things, the form and terms of any series of securities issuable thereunder by
one or more supplemental indentures, and, with the consent of the holders of not
less than 66 2/3% in aggregate principal amount of the securities at the time
outstanding which are affected thereby, to modify the Indenture or any
supplemental indenture or the rights of the holders of the securities of such
series to be affected, provided that no such modification will (i) extend the
fixed maturity of any such securities, reduce the rate or extend the time of
payment of interest thereon, reduce the principal amount thereof or the premium,
if any, thereon, reduce the amount of the principal of Original Issue Discount
Securities payable on any date, change the currency in which any such securities
are payable, or impair the right to institute suit for the enforcement of any
such payment on or after the maturity thereof, without the consent of the holder
of each security so affected, or (ii) reduce the aforesaid percentage of
securities of any series the consent of the holders of which is required for any
such modification without the consent of the holders of all securities of such
series then outstanding, or (iii) modify, without the written consent of the
Trustee, the rights, duties or immunities of the Trustee (SECTIONS 13.01 AND
13.02).
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<PAGE>
DEFAULTS
The Indenture provides that events of default with respect to any series of
Securities will be (i) default for 30 days in payment of interest upon any
Security of such series; (ii) default in payment of principal (other than a
sinking fund instalment) or premium, if any, on any Security of such series;
(iii) default for 30 days in payment of any sinking fund installment when due by
the terms of the Securities of such series; (iv) default, for 90 days after
notice, in performance of any other covenant in the Indenture (other than a
covenant included in the Indenture solely for the benefit of a series of
Securities other than such series); and (v) certain events of bankruptcy or
insolvency (SECTION 6.01). If an event of default with respect to Securities of
any series issued under the Indenture should occur and be continuing, either the
Trustee or the holders of 25% in the principal amount of outstanding Securities
of such series may declare each Security of that series due and payable (SECTION
6.02). The Company is required to file annually with the Trustee a statement of
an officer as to the fulfillment by the Company of its obligations under the
Indenture during the preceding year (SECTION 5.06).
No event of default with respect to a single series of Securities issued
under the Indenture (and any supplemental indenture) necessarily constitutes an
event of default with respect to any other series of Securities (SECTION 6.02).
Holders of a majority in principal amount of the outstanding Securities of
any series will be entitled to control certain actions of the Trustee under the
Indenture and to waive past defaults with respect to such series (SECTIONS 6.02
AND 6.06). Subject to the provisions of the Indenture relating to the duties of
the Trustee, the Trustee will not be under any obligation to exercise any of the
rights or powers vested in it by the Indenture at the request, order or
direction of any of the holders of Securities, unless one or more of such
holders of Securities shall have offered to the Trustee reasonable security or
indemnity (SECTION 10.01).
If an event of default occurs and is continuing with respect to a series of
Securities, any sums held or received by the Trustee under the Indenture may be
applied to reimburse the Trustee for its reasonable compensation and expenses
incurred prior to any payments to holders of Securities of such series (SECTION
6.05).
The right of any holder of any series of Securities to institute action for
any remedy (except such holder's right to enforce payment of the principal of,
premium, if any, and interest on such holder's Security when due) will be
subject to certain conditions precedent, including a request to the Trustee by
the holders of not less than 25% in principal amount of the Securities of that
series outstanding to take action, and an offer satisfactory to the Trustee of
security and indemnity against liabilities incurred by it in so doing (SECTION
6.07).
DEFEASANCE
The Indenture provides that, if specified with respect to the Securities of
a particular series, the Company (a) will be deemed to have paid and discharged
the entire indebtedness on all outstanding Securities of such series
("defeasance and discharge") or (b) will cease to be under any obligation (other
than to pay when due the principal of, premium, if any, and interest on such
Securities) with respect to the Securities of such series ("covenant
defeasance"), at any time prior to Maturity, when the Company has deposited with
the Trustee, in trust for the benefit of the holders (i) funds sufficient to pay
all sums due for principal of, premium, if any, and interest on the Securities
of such series as they shall become due from time to time, or (ii) such amount
of direct obligations of, or obligations the payment of which are
unconditionally guaranteed by the full faith and credit of, the United States of
America, as will or will together with the income thereon without consideration
of any reinvestment thereof be sufficient to pay all sums due for principal of,
premium, if any, and interest on the Securities of such series as they shall
become due from time to time. In addition to the foregoing, covenant defeasance,
but not defeasance and discharge, is conditioned upon the Company's delivery to
the Trustee of an opinion of counsel to the effect that the holders of the
Securities of such series will have no Federal income tax consequences as a
result of
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such deposit. Upon defeasance and discharge, the Indenture will cease to be of
further effect with respect to the Securities of such series and the holders of
such Securities shall look only to the deposited funds or obligations for
payment. Upon covenant defeasance, however, the Company will not be relieved of
its obligation to pay when due principal of, premium, if any, and interest on
the Securities of such series if not otherwise paid from such deposited funds or
obligations. Notwithstanding the foregoing, certain obligations and rights under
the Indenture with respect to compensation, reimbursement and indemnification of
the Trustee, optional redemption, mandatory and optional sinking fund payments,
if any, registration of transfer and exchange of the Securities of such series,
replacement of mutilated, destroyed, lost or stolen Securities and certain other
administrative provisions will survive defeasance and discharge and covenant
defeasance (SECTIONS 11.03 AND 11.04).
Under current Federal income tax law, there is a substantial risk that the
defeasance and discharge contemplated in the preceding paragraph could be
treated as a taxable exchange of the Securities for an interest in the trust. As
a consequence, each holder of the Securities would recognize gain or loss equal
to the difference between the value of the holder's interest in the trust and
holder's tax basis for the securities deemed exchanged. Thereafter, each holder
would be required to include in income his share of any income, gain and loss
recognized by the trust. Although a holder could be subject to Federal income
tax on the deemed exchange of the defeased Securities for an interest in the
trust, such holder would not receive any cash until the maturity of such
Securities. Prospective investors are urged to consult their own tax advisors as
to the specific consequences of a defeasance and discharge, including the
applicability and effect of tax laws other than the Federal income tax law.
Except to the extent described above, the Indenture does not contain any
covenants or provisions that would afford protection to holders of the
Securities in the event of a highly leveraged transaction.
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Company has had
and may from time to time in the future have, banking relationships with the
Trustee in the ordinary course of business.
PLAN OF DISTRIBUTION
The Company may offer the Securities in one or more of the following ways
from time to time: (i) to or through underwriters or dealers; (ii) directly; or
(iii) through agents. Any such underwriters, dealers or agents may include any
Broker-Dealer Subsidiary. The Prospectus Supplement with respect to an offering
of Offered Securities will set forth (i) the terms of such offering, including
the name or names of any underwriters, dealers or agents, (ii) the purchase
price of the Offered Securities and the proceeds to the Company from such sale,
(iii) any underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation, (iv) the initial public
offering price, (v) any discounts or concessions to be allowed or reallowed or
paid to dealers and (vi) any securities exchanges on which such Offered
Securities may be listed. Any initial public offering prices, discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If underwriters are used in an offering of Securities, such Securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. The Securities may be either offered to the public through underwriting
syndicates represented by one or more managing underwriters or by one or more
underwriters without a syndicate. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase Offered Securities
will be subject to certain conditions precedent, and the underwriters will be
obligated to purchase all such Offered Securities if any are purchased.
In connection with underwritten offerings of the Offered Securities and in
accordance with applicable law and industry practice, underwriters may
over-allot or effect transactions which stabilize, maintain or otherwise affect
the market price of the Offered Securities at levels above those which might
otherwise
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prevail in the open market, including by entering stabilizing bids, effecting
syndicate covering transactions or imposing penalty bids. A stabilizing bid
means the placing of any bid, or the effecting of any purchase, for the purpose
of pegging, fixing or maintaining the price of a security. A syndicate covering
transaction means the placing of any bid on behalf of the underwriting syndicate
or the effecting of any purchase to reduce a short position created in
connection with the offering. A penalty bid means an arrangement that permits
the managing underwriter to reclaim a selling concession from a syndicate member
in connection with the offering when Offered Securities originally sold by the
syndicate member are purchased in syndicate covering transactions. Such
transactions may be effected on the NYSE, in the over-the-counter market, or
otherwise. Underwriters are not required to engage in any of these activities.
Any such activities, if commenced, may be discontinued at any time.
If dealers are utilized in the sale of Offered Securities, the Company will
sell such Offered Securities to the dealers as principals. The dealers may then
resell such Offered Securities to the public at varying prices to be determined
by such dealers at the time of resale. The names of the dealers and the terms of
the transaction will be set forth in the Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company to one or more
institutional purchasers, or through agents designated by the Company from time
to time, at a fixed price or prices, which may be changed, or at varying prices
determined at the time of sale. Any agent involved in the offer or sale of the
Offered Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by the Company to such agent will be set
forth, in the Prospectus Supplement relating thereto. Unless otherwise indicated
in such Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
As one of the means of direct issuance of Offered Securities, the Company
may utilize the services of an entity through which it may conduct an electronic
"dutch auction" or similar offering of the Offered Securities among potential
purchasers who are eligible to participate in the auction or offering of such
Offered Securities, if so described in the applicable Prospectus Supplement.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Each of the Broker-Dealer Subsidiaries are members of the National
Association of Securities Dealers, Inc. (the "NASD") and subsidiaries of the
Company, and may participate in distributions of the Offered Securities.
Accordingly, the offerings of Offered Securities will conform with the
requirements set forth in Rule 2720 of the Conduct Rules of the NASD.
This Prospectus together with an applicable Prospectus Supplement may also
be used by any Broker-Dealer Subsidiary in connection with offers and sales of
the Offered Securities in market-making transactions at negotiated prices
related to prevailing market prices at the time of sale. Any Broker-Dealer
Subsidiary may act as principal or agent in such transactions. No Broker-Dealer
Subsidiary has any obligation to make a market in any of the Offered Securities
and may discontinue any market-making activities at any time without notice, at
its sole discretion.
Underwriters, dealers and agents may be entitled, under agreements with the
Company, to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act. Underwriters, dealers and agents
may be customers of, engage in transactions with, or perform services for, the
Company and affiliates of the Company in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities and will
have no established trading market. Any underwriters to whom Offered Securities
are sold for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
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discontinue any market making at any time without notice. The Offered Securities
may or may not be listed on a national securities exchange. No assurance can be
given that there will be a market for the Offered Securities.
ERISA MATTERS
By virtue of the Company's affiliation with certain of its subsidiaries,
including insurance company subsidiaries and the Broker-Dealer Subsidiaries,
that provide services to many employee benefit plans, including investment
advisory and asset management services, the Company and any direct or indirect
subsidiary of the Company may each be considered a "party in interest" within
the meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and a "disqualified person" under corresponding provisions of the
Internal Revenue Code of 1986 (the "Code"), with respect to many employee
benefit plans. "Prohibited transactions" within the meaning of ERISA and the
Code may result if the Securities are acquired by an employee benefit plan with
respect to which the Company or any direct or indirect subsidiary of the Company
is a party in interest, unless such Securities are acquired pursuant to an
applicable exemption. Any employee benefit plan or other entity subject to such
provisions of ERISA or the Code proposing to acquire the Securities should
consult with its legal counsel.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Stephanie B. Mudick, Esq., Deputy General Counsel of the Company, 388
Greenwich Street, New York, New York 10013, or by counsel to be identified in
the Prospectus Supplement. Ms. Mudick, Deputy General Counsel and Assistant
Secretary of the Company, beneficially owns, or has rights to acquire under the
Company's employee benefit plans, an aggregate of less than 1% of the Company's
Common Stock. Certain legal matters will be passed upon for the underwriters or
agents by Dewey Ballantine LLP, New York, New York. Dewey Ballantine LLP has
from time to time acted as counsel for the Company and certain of its
subsidiaries and may do so in the future. A member of Dewey Ballantine LLP
participating in this matter is the beneficial owner of shares of the Company's
Common Stock.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997, incorporated or included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997, and incorporated by reference
herein, have been audited by KPMG Peat Marwick LLP, independent certified public
accountants, as set forth in their reports thereon (also incorporated by
reference herein), which reports state that KPMG Peat Marwick LLP did not audit
the consolidated financial statements of Salomon Inc and its subsidiaries,
appearing in Salomon Inc's Annual Report on Form 10-K for the year ended
December 31, 1996 (the "Salomon Financials"), as of December 31, 1996 and for
each of the two years in the period ended December 31, 1996 and that their
opinion with respect to any amounts derived from the Salomon Financials is based
on the report of Arthur Andersen LLP. The consolidated financial statements of
the Company referred to above are incorporated by reference herein in reliance
upon such reports given upon the authority of said firms as experts in
accounting and auditing.
The consolidated financial statements of Citicorp and subsidiaries as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997, and the related consolidated balance sheets of
Citibank, N.A. and subsidiaries as of December 31, 1997 and 1996, included in
the Company's Current Report on Form 8-K dated April 8, 1998, have been
incorporated by reference herein, in reliance upon the report (also incorporated
by reference herein) of KPMG Peat Marwick LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
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You should rely only on the information in this document and the documents
incorporated by reference. We have not authorized anyone to provide you with
different information.
CITIGROUP INC.
$450 million
Floating Rate Senior Notes
due February 3, 2000
Prospectus Supplement
October 29, 1998
(including May 6, 1998 Prospectus)
SALOMON SMITH BARNEY
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