<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1999
REGISTRATION NO. 333-68949-01 TO 08
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
CITIGROUP INC. DELAWARE 52-1568099
CITIGROUP CAPITAL VI DELAWARE 06-6446485
CITIGROUP CAPITAL VII DELAWARE 06-6446486
CITIGROUP CAPITAL VIII DELAWARE 06-1532080
CITIGROUP CAPITAL IX DELAWARE 06-1532083
CITIGROUP CAPITAL X DELAWARE 06-1532084
CITIGROUP CAPITAL XI DELAWARE 06-1532087
CITIGROUP CAPITAL XII DELAWARE 06-1532088
CITIGROUP CAPITAL XIII DELAWARE 06-1532089
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBERS)
</TABLE>
153 EAST 53RD STREET
NEW YORK, NY 10043
(212) 559-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------------
STEPHANIE B. MUDICK, ESQ.
GENERAL COUNSEL-CORPORATE LAW
CITIGROUP INC.
153 EAST 53RD STREET
NEW YORK, NY 10043
(212) 559-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
GREGORY A. FERNICOLA, ESQ. FREDERICK W. KANNER, ESQ.
SKADDEN, ARPS, SLATE, DEWEY BALLANTINE LLP
MEAGHER & FLOM LLP 1301 AVENUE OF THE AMERICAS
919 THIRD AVENUE NEW YORK, NEW YORK 10019
NEW YORK, NEW YORK 10022 (212) 259-8000
(212) 735-3000
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: At such time (from time to time) after the effective date of this
Registration Statement as agreed upon by Citigroup Inc. and the Underwriters in
light of market conditions.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
------------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
------------------------------
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
------------------------------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INTRODUCTORY NOTE
This Registration Statement contains (i) a form of Prospectus (the "Basic
Prospectus") relating to Debt Securities, Index Warrants, Preferred Stock,
Depositary Shares and Common Stock of Citigroup Inc. (formerly Travelers Group
Inc.) ("Citigroup"), (ii) a form of Prospectus Supplement to the Basic
Prospectus relating to the offering by Citigroup of its Medium-Term Senior
Notes, Series A, and Medium-Term Subordinated Notes, Series A, in registered
form (the "MTN Prospectus Supplement") and (iii) a form of Prospectus (the
"Capital Securities Prospectus") relating to Junior Subordinated Debt Securities
of Citigroup and to the Capital Securities of Citigroup Capital VI (formerly
Travelers Capital VI), Citigroup Capital VII (formerly Travelers Capital VII),
Citigroup Capital VIII (formerly Travelers Capital VIII), Citigroup Capital IX,
Citigroup Capital X, Citigroup Capital XI, Citigroup Capital XII and Citigroup
Capital XIII (each a "Citigroup Trust" or a "Trust" and collectively the
"Citigroup Trusts" or the "Trusts"). The Capital Securities Prospectus may be
used for one or more offerings by Citigroup and the respective Citigroup Trusts.
To the extent required, the information in the Capital Securities Prospectus,
including financial information, will be updated at the time of such offerings.
2
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 22, 1999
The information in this prospectus is not complete and may be changed. Citigroup
Inc. may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
PROSPECTUS
[LOGO]
May Offer--
Debt Securities
Index Warrants
Preferred Stock
Depositary Shares
Common Stock
Citigroup will provide the specific terms of these securities in supplements
to this prospectus. You should read this prospectus and the accompanying
prospectus supplement carefully before you invest.
------------------------
Neither the Securities and Exchange Commission nor any state securities or
insurance commission has approved or disapproved of these securities or
determined if this prospectus or any accompanying prospectus supplement is
truthful or complete. Any representation to the contrary is a criminal offense.
These securities are not deposits or savings accounts but are unsecured
obligations of Citigroup Inc. These securities are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency or
instrumentality.
------------------------
, 1999
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the terms
of the offered securities, you should carefully read:
- this prospectus, which explains the general terms of the securities that
Citigroup may offer;
- the accompanying prospectus supplement, which explains the specific terms
of the securities being offered; and
- the documents referred to in "Where You Can Find More Information" on page
6 for information on Citigroup, including its financial statements.
The accompanying prospectus supplement may also add, update or change
information contained in this prospectus. You should consider carefully the
information in the prospectus, the prospectus supplement and the documents
referred to in "Where You Can Find More Information" before making your
investment decision.
CITIGROUP INC.
Citigroup's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, Citigroup changed its name from Travelers Group Inc. to
Citigroup Inc. in connection with the merger of Citicorp into a subsidiary of
Citigroup. Citigroup's principal executive office is at 153 East 53(rd) Street,
New York, NY 10043, and its telephone number is (212) 559-1000.
THE SECURITIES CITIGROUP MAY OFFER
Citigroup may use this prospectus to offer up to $6,000,000,000 of:
- debt securities;
- index warrants;
- preferred stock;
- depositary shares; and
- common stock.
A prospectus supplement will describe the specific types, amounts, prices,
and detailed terms of any such offered securities.
DEBT SECURITIES
Debt securities are unsecured general obligations of Citigroup in the form
of senior or subordinated debt. Senior debt includes Citigroup's notes, debt and
guarantees and any other debt for money borrowed that is not subordinated.
Subordinated debt, so designated at the time it is issued, would not be entitled
to interest and principal payments if payments on the senior debt were not made.
The senior and subordinated debt will be issued under separate indentures
between Citigroup and a trustee. The trustees under the indentures are banks or
trust companies. Citigroup also has certain other banking relationships with
these entities. Set forth below are summaries of the general features of the
debt securities from these indentures. For a more detailed description of these
features, see "Description of Debt Securities" below. You are also encouraged to
read the indentures, which are
2
<PAGE>
incorporated by reference in or filed as exhibits to Citigroup's registration
statement No. 333-68949, Citigroup's most recent annual report on Form 10-K,
Citigroup's recent quarterly reports on Form 10-Q and Citigroup's recent current
reports on Form 8-K. You can receive copies of these documents by following the
directions on page 6.
GENERAL INDENTURE PROVISIONS THAT APPLY TO SENIOR AND SUBORDINATED DEBT
- Neither indenture limits the amount of debt that Citigroup may issue or
provides holders any protection should there be a highly leveraged
transaction involving Citigroup, although the senior debt indenture does
limit Citigroup's ability to pledge the stock of certain of its important
subsidiaries.
- Each indenture allows for different types of debt securities, including
indexed securities, to be issued in series.
- The indentures allow Citigroup to merge or to consolidate with another
company, or sell all or substantially all of its assets to another
company. If any of these events occur, the other company would be required
to assume Citigroup's responsibilities for the debt and, so long as the
transaction has not resulted in an event of default, Citigroup would be
released from all liabilities and obligations under the debt securities.
- The indentures provide that holders of 66 2/3% of the principal amount of
the senior debt securities and holders of a majority of the total
principal amount of the subordinated debt securities outstanding in any
series may vote to change certain of Citigroup's obligations or your
rights concerning those securities. However, certain important changes in
the terms of that security, including changes in the payment of principal
or interest on that security or the currency of payment, cannot be made
unless every holder of that security consents to the change.
- Citigroup may discharge certain of the debt securities issued under the
indentures or be released from its obligation to comply with the
limitations discussed above at any time by depositing sufficient amounts
of cash or U.S. government securities with the trustee to pay Citigroup's
obligations under the particular securities when due.
- The indentures govern the actions of the trustee with regard to the debt
securities, including when the trustee is required to give notices to
holders of the securities and when lost or stolen debt securities may be
replaced.
EVENTS OF DEFAULT
The events of default specified in the indentures include:
- Failure to pay principal when due;
- Failure to pay required interest for 30 days;
- Failure to make a required sinking fund payment for 30 days;
- Failure to perform other covenants for 90 days after notice; and
- Certain events of insolvency or bankruptcy, whether voluntary or not.
REMEDIES
If there were a default, the trustee or holders of 25% of the principal
amount of debt securities outstanding in a series could demand that the
principal be paid immediately. However, holders of a majority in principal
amount of the securities in that series could rescind that acceleration of the
debt securities.
3
<PAGE>
INDEX WARRANTS
Citigroup may issue index warrants independently or together with debt
securities. Citigroup will issue any series of index warrants under a separate
warrant agreement between Citigroup and a bank or trust company. You are
encouraged to read the standard form of the warrant agreement, which will be
filed as an exhibit to one of Citigroup's future current reports and
incorporated by reference in its registration statement No. 333-68949. You can
receive copies of these documents by following the directions on page 6.
Index warrants are securities that, when exercised by the purchaser at a
time when certain conditions are met, entitle the purchaser to receive from
Citigroup an amount in cash or a number of securities that will be indexed to
prices, yields, or other specified measures or changes in an index or
differences between two or more indices.
The prospectus supplement for a series of index warrants will describe the
formula for determining the amount in cash or number of securities, if any, that
Citigroup will pay you when you exercise an index warrant and will contain
information about the relevant underlying assets and other specific terms of the
index warrant.
Citigroup will generally issue index warrants in book-entry form, which
means that they will not be evidenced by physical certificates. Also, Citigroup
will generally list index warrants for trading on a national securities
exchange, such as the New York Stock Exchange, Inc., The Nasdaq-Amex Market
Group or the Chicago Board Options Exchange, Incorporated.
The warrant agreement for any series of index warrants will provide that
holders of a majority of the total principal amount of the index warrants
outstanding in any series may vote to change certain obligations of Citigroup or
their rights concerning those index warrants. However, certain important changes
in the terms of that security, including changes in the amount or manner of
payment on an index warrant or changes to the exercise times, cannot be made
unless every holder of that security consents to the change.
Any prospective purchasers of index warrants should be aware of special
United States federal income tax considerations applicable to instruments such
as the index warrants. The prospectus supplement relating to each series of
index warrants will describe certain tax considerations.
PREFERRED STOCK
Citigroup may issue preferred stock with various terms to be established by
its Board of Directors or a committee designated by the Board. Each series of
preferred stock will be more fully described in the particular prospectus
supplement that will accompany this prospectus, including redemption provisions,
rights in the event of liquidation, dissolution or winding up of Citigroup,
sinking fund provisions, voting rights and conversion rights.
Generally, each series of preferred stock will rank on an equal basis with
each other series of preferred stock and will rank prior to Citigroup's common
stock. The prospectus supplement will also describe how and when dividends will
be paid on the series of preferred stock.
DEPOSITARY SHARES
Citigroup may issue depositary shares representing fractional shares of
preferred stock. Each particular series of depositary shares will be more fully
described in the prospectus supplement that will accompany this prospectus.
These depositary shares will be evidenced by depositary receipts and issued
under a deposit agreement between Citigroup and a bank or trust company. You are
encouraged to read the standard form of the deposit agreement, which is
incorporated by reference in Citigroup's
4
<PAGE>
registration statement No. 333-68949. You can receive copies of this document by
following the directions on page 6.
COMMON STOCK
Citigroup may issue common stock, par value $.01 per share. Holders of
common stock are entitled to receive dividends when declared by its Board of
Directors, subject to rights of preferred stock holders. Each holder of common
stock is entitled to one vote per share. The holders of common stock have no
preemptive rights or cumulative voting rights.
USE OF PROCEEDS
Citigroup will use the net proceeds it receives from any offering of these
securities for general corporate purposes, primarily to fund its operating units
and subsidiaries. Citigroup may use some of the proceeds to refinance or extend
the maturity of existing debt obligations. Citigroup will use a portion of the
proceeds from the sale of warrants and notes on which certain or all payments of
interest, principal or premium may be linked to an index to hedge its exposure
to payments that it may have to make on such index warrants and indexed notes as
described below under "Use of Proceeds and Hedging."
PLAN OF DISTRIBUTION
Citigroup may sell the offered securities in any of the following ways:
- to or through underwriters or dealers;
- by itself directly;
- through agents; or
- through a combination of any of these methods of sale.
The prospectus supplement will explain the ways Citigroup sells specific
securities, including the names of any underwriters and details of the pricing
of the securities, as well as the commissions, concessions or discounts
Citigroup is granting the underwriters, dealers or agents.
If Citigroup uses underwriters in any sale, the underwriters will buy the
securities for their own account and may resell the securities from time to time
in one or more transactions, at a fixed public offering price or at varying
prices determined at the time of sale. In connection with an offering,
underwriters and selling group members and their affiliates may engage in
transactions to stabilize, maintain or otherwise affect the market price of the
securities, in accordance with applicable law.
Citigroup expects that the underwriters for any offering will include one or
more of its broker-dealer subsidiaries, including Salomon Smith Barney Inc.
These broker-dealer subsidiaries, including their successors, also expect to
offer and sell previously issued offered securities as part of their business,
and may act as a principal or agent in such transactions. Citigroup or any of
its subsidiaries may use this prospectus and the related prospectus supplements
and pricing supplements in connection with these activities.
5
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, Citigroup filed a registration
statement (No. 333-68949) relating to the securities offered by this prospectus
with the Securities and Exchange Commission. This prospectus is a part of that
registration statement, which includes additional information.
Citigroup files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document Citigroup
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can also request copies of the documents, upon
payment of a duplicating fee, by writing the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. These SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov.
The SEC allows Citigroup to "incorporate by reference" the information it
files with the SEC, which means that it can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus. Information that
Citigroup files later with the SEC will automatically update information in this
prospectus. In all cases, you should rely on the later information over
different information included in this prospectus or the prospectus supplement.
Citigroup incorporates by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934:
(a) Annual Report on Form 10-K for the year ended December 31, 1997, as
amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998;
(c) Current Reports on Form 8-K dated January 6, 1998, January 26, 1998,
February 17, 1998, April 6, 1998, April 8, 1998, April 20, 1998, June 1,
1998, July 20, 1998, August 18, 1998, August 31, 1998, October 8, 1998,
October 21, 1998, October 26, 1998, October 29, 1998, November 1, 1998,
November 13, 1998 and December 15, 1998; and
(d) Registration Statement on Form 8-B, dated May 10, 1988, describing our
common stock, including any amendments or reports filed for the purpose
of updating such description.
All documents Citigroup files pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the later of
(1) the completion of the offering of the securities described in this
prospectus and (2) the date the broker-dealer subsidiaries of Citigroup stop
offering securities pursuant to this prospectus shall be incorporated by
reference in this prospectus from the date of filing of such documents.
You may request a copy of these filings, at no cost, by writing or
telephoning Citigroup at the following address:
Treasurer
Citigroup Inc.
153 East 53(rd) Street
New York, NY 10043
212-559-1000
You should rely only on the information provided in this prospectus and the
prospectus supplement, as well as the information incorporated by reference.
Citigroup has not authorized anyone to provide you with different information.
Citigroup is not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus, the prospectus supplement or any documents incorporated by reference
is accurate as of any date other than the date on the front of the applicable
document.
6
<PAGE>
CITIGROUP INC.
Citigroup's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, Citigroup changed its name from Travelers Group Inc. to
Citigroup Inc. in connection with the merger of Citicorp into a subsidiary of
Citigroup.
Citigroup is a holding company and services its obligations primarily with
dividends and advances that it receives from subsidiaries. Citigroup's
subsidiaries that operate in the banking, insurance and securities business can
only pay dividends if they are in compliance with the applicable regulatory
requirements imposed on them by federal bank regulatory authorities, state
insurance departments and securities regulators. Certain of Citigroup's
subsidiaries have credit agreements that also may restrict their ability to pay
dividends. Citigroup currently believes that none of these regulatory or
contractual restrictions on the ability of its subsidiaries to pay dividends
will affect Citigroup's ability to service its own debt. Citigroup must also
maintain the required capital levels of a bank holding company before it may pay
dividends on its stock. Each of Citigroup's major operating subsidiaries
finances its operations on a stand-alone basis consistent with its
capitalization and ratings.
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, Citigroup may be required to commit resources to its
subsidiary banks in certain circumstances.
The principal office of Citigroup is located at 153 East 53rd Street, New
York, NY 10043, and its telephone number is (212) 559-1000.
7
<PAGE>
USE OF PROCEEDS AND HEDGING
GENERAL. Citigroup will use the proceeds it receives from the sale of the
offered securities for general corporate purposes, principally to:
- fund the business of its operating units;
- fund investments in, or extensions of credit or capital contributions to,
its subsidiaries; and
- lengthen the average maturity of liabilities, which means that it could
reduce its short-term liabilities or refund maturing indebtedness.
Citigroup expects to incur additional indebtedness in the future to fund its
businesses. Citigroup or an affiliate may enter into a swap agreement in
connection with the sale of the offered securities and may earn additional
income from that transaction.
USE OF PROCEEDS RELATING TO INDEX WARRANTS AND INDEXED NOTES. Citigroup or
one or more of its subsidiaries may use all or some of the proceeds received
from the sale of index warrants or indexed notes to purchase or maintain
positions in the assets that are used to determine the relevant index or
indices. Citigroup or one or more of its subsidiaries may also purchase or
maintain positions in options, futures contracts, forward contracts or swaps, or
options on such securities, or other derivative or synthetic instruments
relating to such relevant index or underlying assets, as the case may be.
Citigroup may also, if applicable, use the proceeds to pay the costs and
expenses of hedging any currency, interest rate or other index-related risk with
respect to such index warrants and indexed notes.
Citigroup expects that it or one or more of its subsidiaries will increase
or decrease their initial hedging positions using dynamic hedging techniques and
may take long or short positions in the index, the underlying assets, options,
futures contracts, forward contracts, swaps, or other derivative or synthetic
instruments related to the index and such underlying assets. These other hedging
activities may occur from time to time before the index warrants and indexed
notes mature and will depend on market conditions and the value of the index and
the underlying assets.
In addition, Citigroup or one or more of its subsidiaries may purchase or
otherwise acquire a long or short position in index warrants and indexed notes
from time to time and may, in their sole discretion, hold, resell, exercise,
cancel or retire such offered securities. Citigroup or one or more of its
subsidiaries may also take hedging positions in other types of appropriate
financial instruments that may become available in the future.
If Citigroup or one or more of its subsidiaries has a long hedge position
in, options contracts in, or other derivative or synthetic instruments related
to, the underlying assets or index, Citigroup or one or more of its subsidiaries
may liquidate all or a portion of its holdings at or about the time of the
maturity of the index warrants and indexed notes. The aggregate amount and type
of such positions are likely to vary over time depending on future market
conditions and other factors. Citigroup is only able to determine profits or
losses from any such position when such position is closed out and any
offsetting position or positions are taken into account. Citigroup has no reason
to believe that its hedging activity will have a material impact on the price of
such options, swaps, futures contracts, options on the foregoing, or other
derivative or synthetic instruments, or on the value of the index or the
underlying assets. However, Citigroup cannot guarantee you that its hedging
activities will not affect such prices or value. Citigroup will use the
remainder of the proceeds from the sale of index warrants and indexed notes for
general corporate purposes as described above.
8
<PAGE>
RATIO OF INCOME TO FIXED CHARGES AND
RATIO OF INCOME TO COMBINED FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
The following table shows (1) the supplemental consolidated ratio of income
to fixed charges and (2) the supplemental consolidated ratio of income to
combined fixed charges including preferred stock dividends of Citigroup for the
nine months ended September 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>
YEAR ENDED
DECEMBER 31,
NINE MONTHS ENDED ------------------------------------------
SEPTEMBER 30, 1998 1997 1996 1995 1994
--------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of income to fixed charges (excluding interest on
deposits)............................................... 1.65 1.71 1.88 1.65 1.41
Ratio of income to fixed charges (including interest on
deposits)............................................... 1.39 1.43 1.51 1.39 1.25
Ratio of income to combined fixed charges including
preferred stock dividends (excluding interest on
deposits)............................................... 1.62 1.66 1.80 1.56 1.34
Ratio of income to combined fixed charges including
preferred stock dividends (including interest on
deposits)............................................... 1.37 1.41 1.48 1.35 1.21
<CAPTION>
1993
---------
<S> <C>
Ratio of income to fixed charges (excluding interest on
deposits)............................................... 1.43
Ratio of income to fixed charges (including interest on
deposits)............................................... 1.25
Ratio of income to combined fixed charges including
preferred stock dividends (excluding interest on
deposits)............................................... 1.37
Ratio of income to combined fixed charges including
preferred stock dividends (including interest on
deposits)............................................... 1.22
</TABLE>
9
<PAGE>
EUROPEAN MONETARY UNION
Certain of the foreign currencies in which debt securities may be
denominated or payments in respect of index warrants may be due or by which
amounts due on the offered securities may be calculated may be issued by
countries participating in Stage III of the European Economic and Monetary
Union. Stage III began on January 1, 1999 for the eleven participating member
states of the European Union that satisfied the economic convergence criteria in
the Treaty on European Union: Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain. Other member
states of the European Union may still become participating member states after
January 1, 1999.
Stage III includes the introduction of the "Euro," which is legal tender in
the participating member states, existing in parallel with the present national
currency of each participating member state. It is currently anticipated that on
and after January 1, 2002, the national currencies of participating member
states will cease to exist and the sole legal tender in such states will be the
Euro. The European Union has adopted regulations providing specific rules for
the introduction of the Euro in substitution for the respective current national
currencies of such member states, and may adopt additional regulations or
legislation in the future relating to the Euro. It is anticipated that these
regulations or legislation will be supplemented by legislation of the individual
member states.
Pursuant to European Council Regulation No. 2866/98 of December 31, 1998,
one Euro equals:
<TABLE>
<S> <C>
- - 13.7603 Austrian schillings - 1,936.27 Italian lire
- - 40.3399 Belgian francs - 40.3399 Luxembourg francs
- - 5.94573 Finnish marks - 2.20371 Dutch guilders
- - 6.55957 French francs - 200.482 Portugese escudos
- - 1.95583 German marks - 166.386 Spanish pesetas.
- - 0.787564 Irish pounds
</TABLE>
10
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The debt securities offered by this prospectus will be unsecured general
obligations of Citigroup and will be either senior or subordinated debt of
Citigroup. Debt securities that will be senior debt will be issued under a
senior debt indenture. Debt securities that will be subordinated debt will be
issued under a subordinated debt indenture. The senior debt indenture and the
subordinated debt indenture are sometimes referred to in this prospectus
individually as an "indenture" and collectively as the "indentures." Forms of
the indentures have been filed with the SEC and are incorporated by reference in
or filed as exhibits to the registration statement on Form S-3 (No. 333-68949)
under the Securities Act of 1933, as amended, of which this prospectus forms a
part.
The following briefly summarizes certain provisions of the indentures and
the debt securities. You should read the more detailed provisions of the
applicable indenture, including the defined terms, for provisions that may be
important to you. Copies of the indentures may be obtained from Citigroup or the
applicable Trustee. The numbers in parentheses below refer to sections in the
applicable indenture or, if no indenture is specified, to sections in each of
the indentures. Wherever particular sections or defined terms of the applicable
indenture are referred to, such sections or defined terms are incorporated into
this prospectus by reference as part of the statement made, and the statement is
qualified in its entirety by such reference.
Unless otherwise provided in the applicable prospectus supplement, the
Trustee under the senior debt indenture will be The Bank of New York, under an
indenture dated as of March 15, 1987, as amended or supplemented from time to
time. The Trustee under the subordinated debt indenture will be The First
National Bank of Chicago, under an indenture dated as of July 17, 1998, as
amended or supplemented from time to time. The Trustees under the indentures are
referred to in this prospectus individually as a "Trustee" and collectively as
the "Trustees."
GENERAL
The indentures provide that the unsecured senior or subordinated debt
securities of Citigroup, 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 Citigroup.
Under the indentures, Citigroup may authorize the issuance and establish the
terms of a series of debt 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
Citigroup duly authorized by the Board of Directors for such purpose. Citigroup
also has the ability, in addition to the ability to issue debt securities with
terms different from those of debt securities previously issued, to "reopen" a
previous issue of a series of debt securities by issuing additional debt
securities of such series.
Citigroup may issue one or more series of debt securities with the same or
various maturities at par or at a discount. Federal income tax consequences and
other special considerations applicable to any debt securities issued by
Citigroup at a discount ("Original Issue Discount Securities") will be described
in the applicable prospectus supplement.
Because Citigroup is a holding company, its rights and the rights of its
creditors, including the holders of debt securities, to participate in the
assets of any subsidiary upon the subsidiary's liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors, except to the
extent that Citigroup may itself be a creditor with recognized claims against
the subsidiary.
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The applicable prospectus supplement relating to any series of debt
securities will describe the following terms, where applicable:
- the designation of the debt securities, whether such debt securities will
be senior or subordinated debt of Citigroup and the indenture under which
such debt securities are being issued;
- the total principal amount of the debt securities;
- the percentage of the principal amount at which the debt securities will
be issued and, if applicable, the method of determining the principal
amount;
- the date or dates on which the principal of the debt securities will be
payable;
- what interest rate will apply to the debt securities and how such rate
will be determined;
- the date or dates from which any interest will accrue, or how such date or
dates will be determined, and the date or dates on which any such interest
will be payable and any related record dates;
- 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 debt
securities will be payable;
- if the amount of payment of principal of, premium, if any, or any interest
on the debt securities may be determined with reference to an index or
formula based on a currency or currency unit other than that in which the
debt securities are stated to be payable, the manner in which such amounts
will be determined;
- if the principal of, premium, if any, or any interest on the debt
securities is to be payable at the election of Citigroup or a holder of
such debt securities in a currency or currency unit other than that in
which the debt securities are stated to be payable, the periods within
which and the terms upon which such election may be made;
- where the principal of, premium, if any, and any interest on the debt
securities will be payable;
- the price or prices at which, the period or periods within which and the
terms and conditions upon which the debt securities may be redeemed, in
whole or in part, at the option of Citigroup;
- any obligation of Citigroup to redeem, purchase or repay the debt
securities pursuant to any sinking fund or analogous provision or at the
option of a holder of such debt securities, and the terms and conditions
upon which the debt securities will be redeemed, purchased or repaid
pursuant to such obligation;
- if other than the principal amount thereof, the portion of the principal
amount of the debt securities payable upon declaration of acceleration of
the maturity of the debt securities;
- provisions, if any, for the discharge of Citigroup's indebtedness and
obligations or termination of certain of its obligations under the
indenture with respect to the debt securities by deposit of funds or
United States government obligations;
- whether the debt securities are to be issued in whole or in part in the
form of a global security held by a depositary and the terms and any
conditions for exchanging such global security in whole or in part for
certificated securities;
- the date as of which any global security will be dated if other than the
original issuance of the first debt security to be issued;
- any material provisions of the applicable indenture described in this
prospectus that do not apply to the debt securities; and
- any other specific terms of the debt securities (SECTION 2.02).
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The terms on which a series of debt securities may be convertible into or
exchangeable for common stock or other securities of Citigroup will be set forth
in the prospectus supplement relating to such series. Such terms will include
provisions as to whether conversion or exchange is mandatory, at the option of
the holder or at the option of Citigroup, and may include provisions pursuant to
which the number of shares of common stock or other securities of Citigroup to
be received by the holders of such series of debt securities would be subject to
adjustment.
The debt securities will be issued only in registered form. Debt 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
accompanying prospectus supplement, debt securities denominated in United States
dollars will be issued only in denominations of $1,000 and integral multiples of
$1,000 (SECTION 2.01). The prospectus supplement relating to offered securities
denominated in a foreign or composite currency will specify the denomination of
such offered securities.
The debt securities may be presented for exchange, and debt securities other
than a global security may be presented for registration of transfer at the
principal corporate trust office of the relevant Trustee in The City of New
York. You will not have to pay any service charge for any registration of
transfer or exchange of debt securities, but Citigroup may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection with such registration or transfer. (SECTION 2.05)
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, on the debt securities other
than a global security will be made in the designated currency against surrender
of such debt securities at the principal corporate trust office of the relevant
Trustee in The City of New York. Payment will be made to the person in whose
name the debt security is registered at the close of business on the record date
for such payment. Interest payments will be made at the principal corporate
trust office of the relevant 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). Payments in any other manner will be specified in the prospectus
supplement.
GLOBAL SECURITIES
A global security is a security that represents the beneficial interests of
a number of purchasers of such security. Some or all of the debt securities of a
series may be issued in one or more global securities. Global securities will be
deposited with, or on behalf of, a depositary identified in the prospectus
supplement relating to that series (SENIOR DEBT INDENTURE, SECTIONS 1.02 AND
2.01; SUBORDINATED DEBT INDENTURE, SECTIONS 1.02 AND 2.02).
The specific terms of the depositary arrangement with respect to a series of
debt 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 depositary 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;
- 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.
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DTC has advised Citigroup of the following.
- DTC 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 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 Citigroup 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 indirect participants). 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. You can find
the rules applicable to DTC and its direct and indirect participants on file
with the SEC.
So long as DTC or its nominee is the registered owner of the global
securities, Citigroup and the Trustee will consider DTC or its nominee, as the
case may be, the sole owner or holder of the securities represented by such
global securities for all purposes under the applicable 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 of such
securities under the applicable indenture.
SENIOR DEBT
The senior debt securities will be issued under the senior debt indenture
and will rank on an equal basis with all other unsecured debt of Citigroup
except subordinated debt.
SUBORDINATED DEBT
The subordinated debt securities will be issued under the subordinated debt
indenture and will rank subordinated and junior in right of payment, to the
extent set forth in the subordinated debt indenture, to all "Senior
Indebtedness" (as defined below) of Citigroup.
If Citigroup defaults in the payment of any principal of, or premium, if
any, or interest on any Senior Indebtedness when it becomes due and payable
after any applicable grace period, then, unless and until such default shall
have been cured or waived or shall have ceased to exist, Citigroup cannot make a
payment on account of the principal of, or premium, if any, or interest on
subordinated debt
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securities, or in respect of any redemption, retirement or other acquisition of
any of the subordinated debt securities. Nevertheless, in such case of default,
holders of subordinated debt securities may still receive and retain:
- securities of Citigroup 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 subordinated debt indenture with
respect to the indebtedness evidenced by the subordinated debt securities,
to the payment of all Senior Indebtedness at the time outstanding and to
any securities issued in respect thereof under any plan of reorganization
or readjustment; and
- payments made from a defeasance trust as described below.
In the event of:
- any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to
Citigroup, its creditors or its property,
- any proceeding for the liquidation, dissolution or other winding-up of
Citigroup, voluntary or involuntary, whether or not involving insolvency
or bankruptcy proceedings,
- any assignment by Citigroup for the benefit of creditors, or
- any other marshalling of the assets of Citigroup,
all Senior Indebtedness shall first be paid in full before any payment or
distribution, shall be made to any holders of subordinated debt securities.
Holders of subordinated debt securities must return and deliver any payments
received by them, other than in a plan of reorganization or through a defeasance
trust, directly to the holders of Senior Indebtedness until such payments or
distributions on all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) shall have been paid in
full. (SUBORDINATED DEBT INDENTURE, SECTION 14.01).
"Senior Indebtedness" means:
(1) the principal, premium, if any, and interest in respect of (A)
indebtedness of Citigroup for money borrowed and (B) indebtedness
evidenced by securities, notes, debentures, bonds or other similar
instruments issued by Citigroup, including the senior debt securities;
(2) all capital lease obligations of Citigroup;
(3) all obligations of Citigroup issued or assumed as the deferred purchase
price of property, all conditional sale obligations of Citigroup and all
obligations of Citigroup under any conditional sale or title retention
agreement, but excluding trade accounts payable in the ordinary course of
business;
(4) all obligations, of Citigroup in respect of any letters of credit,
bankers acceptance, security purchase facilities and similar credit
transactions;
(5) all obligations of Citigroup in respect of interest rate swap, cap or
other agreements, interest rate future or options contracts, currency
swap agreements, currency future or option contracts and other similar
agreements;
(6) all obligations of the type referred to in clauses (1) through (5) of
other persons for the payment of which Citigroup is responsible or liable
as obligor, guarantor or otherwise; and
(7) all obligations of the type referred to in clauses (1) through (6) of
other persons secured by any lien on any property or asset of Citigroup
whether or not such obligation is assumed by Citigroup;
but Senior Indebtedness does not include:
(a) subordinated debt securities;
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(b) any indebtedness that by its terms is subordinated to, or ranks on an
equal basis with, subordinated debt securities; and
(c) any indebtedness between or among Citigroup and its affiliates,
including (x) any Junior Subordinated Debt, (y) any Capital
Securities Guarantees and (z) all other debt securities and
guarantees in respect of those debt securities issued to any other
trust, or a trustee of such trust, partnership or other entity
affiliated with Citigroup which is a financing vehicle of Citigroup
in connection with the issuance by such financing vehicle of
preferred securities or other securities guaranteed by Citigroup
pursuant to an instrument that ranks on an equal basis with, or
junior to, the Capital Securities Guarantees.
"Junior Subordinated Debt" means Citigroup's:
- 7% Junior Subordinated Deferrable Interest Debentures due November 15,
2028;
- 6.850% Junior Subordinated Deferrable Interest Debentures due January 22,
2038;
- 7 5/8% Junior Subordinated Deferrable Interest Debentures due December 1,
2036;
- 7 3/4% Junior Subordinated Deferrable Interest Debentures due December 1,
2036;
- 8% Deferrable Interest Debentures due September 30, 2036;
- other notes or other obligations which may be issued under the indenture,
dated as of October 7, 1996, between Citigroup and The Chase Manhattan
Bank, as trustee; and
- indebtedness that is by its terms subordinated to, or ranks on an equal
basis with, the Junior Subordinated Debt.
"Capital Securities Guarantees" means the guarantees issued by Citigroup in
connection with:
- the 7% Trust Preferred Securities of Citigroup Capital V;
- the 6.850% Trust Preferred Securities of Citigroup Capital IV;
- the 7 5/8% Trust Preferred Securities of Citigroup Capital III;
- the 7 3/4% Trust Preferred Securities of Citigroup Capital II;
- the 8% Trust Preferred Securities of Citigroup Capital I; and
- any existing or future preferred or preference stock, including capital
securities, that is by its terms subordinated to, or ranks on an equal
basis with, the Junior Subordinated Debt.
COVENANTS
LIMITATIONS ON LIENS. The senior debt indenture provides that Citigroup
will not, and will not permit any Subsidiary (as defined below) to, incur,
issue, assume or guarantee any indebtedness for money borrowed if such
indebtedness is secured by a pledge of, lien on, or security interest in any
shares of Voting Stock of any Significant Subsidiary, without providing that
each series of senior debt securities and, at Citigroup's option, any other
senior indebtedness ranking equally and ratably with such indebtedness. This
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 (SENIOR DEBT INDENTURE, SECTION 5.04). The
subordinated debt indenture does not contain a similar provision.
"Significant Subsidiary" means a Subsidiary, including its Subsidiaries,
that meets any of the following conditions:
- Citigroup's and its other Subsidiaries' investments in and advances to the
Subsidiary exceed 10 percent of the total assets of Citigroup and its
Subsidiaries consolidated as of the end of the most recently completed
fiscal year;
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- Citigroup's and its other Subsidiaries' proportionate share of the total
assets of the Subsidiary after intercompany eliminations exceeds 10
percent of the total assets of Citigroup and its Subsidiaries consolidated
as of the end of the most recently completed fiscal year; or
- Citigroup'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 Citigroup and its Subsidiaries
consolidated for the most recently completed fiscal year.
"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 Citigroup, and/or one or more Subsidiaries.
"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, except capital stock that carries only the right to
vote conditioned on the happening of an event regardless of whether such event
shall have happened (SENIOR DEBT INDENTURE, SECTIONS 1.02 AND 5.04).
LIMITATIONS ON MERGERS AND SALES OF ASSETS. The indentures provide that
Citigroup will not merge or consolidate 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:
- either Citigroup is the continuing corporation, or the successor
corporation, if other than Citigroup, 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,
Citigroup will be discharged from its obligations under the indenture) and
- immediately after the consummation of such a transaction, there would not
be any default in the performance of any covenant or condition of the
indenture (SENIOR DEBT INDENTURE, SECTIONS 5.05 AND 14.01; SUBORDINATED
DEBT INDENTURE, SECTIONS 5.04 AND 15.01).
Other than the restrictions described above, the indentures do not contain
any covenants or provisions that would protect holders of the debt securities in
the event of a highly leveraged transaction.
MODIFICATION OF THE INDENTURES
Under the indentures, Citigroup and the relevant Trustee can enter into
supplemental indentures to establish the form and terms of any series of debt
securities without obtaining the consent of any holder of debt securities.
Citigroup and the Trustee may, with the consent of the holders of at least
66 2/3% in aggregate principal amount of the senior debt securities of a series
or at least a majority in aggregate principal amount of the subordinated debt
securities, modify the applicable indenture or the rights of the holders of the
securities of such series to be affected. However, no such modification may:
- extend the fixed maturity of any such securities, reduce the rate or
extend the time of payment of interest on such securities, reduce the
principal amount of such securities or the premium, if any, on such
securities, 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 of such
securities, without the consent of the holder of each security so
affected; or
- reduce the percentage of securities referred to above 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
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- modify, without the written consent of the Trustee, the rights, duties or
immunities of the Trustee (SECTIONS 13.01 AND 13.02).
In addition, the subordinated debt indenture may not be amended without the
consent of each holder of subordinated debt securities affected thereby to
modify the subordination of the subordinated debt securities issued under that
indenture in a manner adverse to the holders of the subordinated debt securities
(SUBORDINATED DEBT INDENTURE, SECTION 13.02).
DEFAULTS
Each indenture provides that events of default with respect to any series of
debt securities will be:
- failure to pay required interest on any debt security of such series for
30 days;
- failure to pay principal (other than a sinking fund installment) or
premium, if any, on any debt security of such series when due;
- failure to pay any required sinking fund installment for 30 days on debt
securities of such series;
- failure to perform for 90 days after notice any other covenant in the
relevant indenture other than a covenant included in the relevant
indenture solely for the benefit of a series of debt securities other than
such series; and
- certain events of bankruptcy or insolvency, whether voluntary or not
(SECTION 6.01).
If an event of default with respect to debt securities of any series issued
under the indentures should occur and be continuing, either the Trustee or the
holders of 25% in the principal amount of outstanding debt securities of such
series may declare each debt security of that series due and payable (SECTION
6.02). Citigroup is required to file annually with the Trustee a statement of an
officer as to the fulfillment by Citigroup of its obligations under the
indenture during the preceding year (SENIOR DEBT INDENTURE, SECTION 5.06;
SUBORDINATED DEBT INDENTURE, SECTION 5.05).
No event of default with respect to one series of debt securities issued
under an indenture is necessarily an event of default with respect to any other
series of debt securities (SECTION 6.02).
Holders of a majority in principal amount of the outstanding debt securities
of any series will be entitled to control certain actions of the Trustee under
the indentures and to waive past defaults with respect to such series (SECTIONS
6.02 AND 6.06). The Trustee generally will not be requested, ordered or directed
by any of the holders of debt securities, unless one or more of such holders
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
debt securities, the Trustee may use any sums that it holds under the relevant
indenture for its own reasonable compensation and expenses incurred prior to
paying the holders of debt securities of such series (SECTION 6.05).
Before any holder of any series of debt securities may institute action for
any remedy, other than payment of the principal of, premium, if any, and
interest on such holder's debt security when due, a request to the Trustee by
the holders of not less than 25% in principal amount of the debt securities of
that series outstanding is required for the Trustee to take action. An offer
satisfactory to the Trustee of security and indemnity against liabilities
incurred by it is also required (SECTION 6.07).
DEFEASANCE
SENIOR DEBT INDENTURE. If so specified with respect to the senior debt
securities of a particular series, when Citigroup has deposited with the Trustee
cash or governmental securities, in trust for the benefit of the holders
sufficient to pay the principal of, premium, if any, and interest on the senior
debt securities of such series when due, then Citigroup, at its option:
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- will be deemed to have paid and discharged the entire indebtedness on all
outstanding senior debt securities of such series ("defeasance and
discharge"); or
- will cease to be under any obligation, other than to pay when due the
principal of, premium, if any, and interest on such senior debt
securities, with respect to the senior debt securities of such series
("covenant defeasance").
In the case of covenant defeasance, Citigroup must also deliver to the
Trustee an opinion of counsel to the effect that the holders of the senior debt
securities of such series will have no federal income tax consequences as a
result of such deposit.
When there is a defeasance and discharge, the senior debt indenture will no
longer govern the senior debt securities of such series, Citigroup will no
longer be liable for payment and the holders of such senior debt securities will
be entitled only to the deposited funds. When there is a covenant defeasance,
however, Citigroup will continue to be obligated to pay when due principal of,
premium, if any, and interest on the senior debt securities of such series if
the deposited funds are not sufficient to pay the holders. The obligations and
rights under the senior debt 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 senior debt securities of such series, replacement of mutilated,
destroyed, lost or stolen senior debt securities and certain other
administrative provisions will continue even if Citigroup exercises its
defeasance and discharge or covenant defeasance options (SENIOR DEBT INDENTURE,
SECTIONS 11.03 AND 11.04).
Under current federal income tax law, defeasance and discharge would be
treated as a taxable exchange of the senior debt securities for an interest in
the trust. As a consequence, each holder of the senior debt 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 senior debt securities
deemed exchanged. Each holder would then be required to include in income his
share of any income, gain and loss recognized by the trust. Even though a holder
would be subject to federal income tax on the deemed exchange, such holder would
not receive any cash until the maturity or an earlier redemption of the senior
debt securities, except for current interest payments, if any. Under current
federal income tax law, a covenant defeasance would not be treated as a taxable
exchange of senior debt 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.
SUBORDINATED DEBT INDENTURE. The defeasance and discharge and covenant
defeasance provisions contained in the subordinated debt indenture are
substantially the same as those described above for the senior debt indenture
(SUBORDINATED DEBT INDENTURE, SECTIONS 11.01, 11.02, 11.03, 11.04 AND 11.05).
Under the subordinated debt indenture, Citigroup must also deliver to the
Trustee an opinion of counsel to the effect that the holders of the subordinated
debt securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance and discharge or covenant
defeasance and that the holders will be subject to federal income tax in the
same manner as if such defeasance and discharge had not occurred. In the case of
a defeasance and discharge, such opinion must be based upon a ruling or
administrative pronouncement of the IRS.
CONCERNING THE TRUSTEES
Citigroup has had and may continue to have banking relationships with the
Trustees in the ordinary course of business.
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DESCRIPTION OF INDEX WARRANTS
The following briefly summarizes certain general terms and provisions of the
index warrants to which any prospectus supplement may relate. You should read
the particular terms of the index warrants that are offered by Citigroup, which
will be described in more detail in a prospectus supplement. The prospectus
supplement will also state whether any of the general provisions summarized
below do not apply to the index warrants being offered.
Index warrants may be issued independently or together with debt securities
and may be attached to or separate from any such offered securities. Each series
of index warrants will be issued under a separate index warrant agreement to be
entered into between Citigroup and a bank or trust company, as Index Warrant
Agent. A single bank or trust company may act as Index Warrant Agent for more
than one series of index warrants. The Index Warrant Agent will act solely as
the agent of Citigroup under the applicable index warrant agreement and will not
assume any obligation or relationship of agency or trust for or with any owners
of such index warrants. A copy of the form of index warrant agreement, including
the form of certificate or global certificate that will represent the index
warrant certificate will be filed as an exhibit to a document incorporated by
reference in the registration statement of which this prospectus forms a part.
You should read the more detailed provisions of the index warrant agreement and
the index warrant certificate or index warrant global certificate for provisions
that may be important to you.
GENERAL
The index warrant agreement does not limit the number of index warrants that
may be issued. Citigroup will have the right to "reopen" a previous series of
index warrants by issuing additional index warrants of such series.
Each index warrant will entitle the warrant holder to receive from
Citigroup, upon exercise, cash or securities. The amount in cash or number of
securities will be determined by reference to an index calculated by reference
to prices, yields, levels or other specified objective measures in respect of
specified securities or securities indices or specified foreign currencies or
currency indices, or a combination thereof, or changes in such measure or
differences between two or more such measures. The prospectus supplement for a
series of index warrants will describe the formula or methodology to be applied
to the relevant index or indices to determine the amount payable or
distributable on the index warrants.
If so specified in the prospectus supplement, the index warrants will
entitle the warrant holder to receive from Citigroup a minimum or maximum amount
upon automatic exercise at expiration and under certain other circumstances.
You should read the prospectus supplement applicable to any series of index
warrants for any circumstances in which the payment or distribution or the
determination of the payment or distribution on the index warrants may be
postponed. On the other hand, the index warrants may be subject to early
exercise or cancellation in certain circumstances, and if so, these features
will be described in the applicable prospectus supplement. The amount due after
any such delay or postponement, or early exercise or cancellation, will be set
forth in the applicable prospectus supplement.
Unless otherwise specified in the applicable prospectus supplement,
Citigroup will not purchase or take delivery of or sell or deliver any
securities or currencies, including the underlying assets, other than the
payment of any cash or distribution of any securities due on the index warrants,
from or to warrant holders pursuant to the index warrants.
The index warrants will be deemed to be automatically exercised upon
expiration. Upon such automatic exercise, warrant holders will be entitled to
receive the cash amount or number of securities due, if any, on such exercise of
the index warrants.
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The applicable prospectus supplement relating to any series of index
warrants will describe the following:
- the aggregate number of such index warrants;
- the offering price of such index warrants;
- the measure or measures by reference to which payment or distribution on
such index warrants will be determined;
- certain information regarding the underlying securities, foreign
currencies or indices;
- the amount of cash or number of securities due, or the means by which the
amount of cash or number of securities due may be calculated, on exercise
of the index warrants, including automatic exercise, or upon cancellation;
- the date on which the index warrants may first be exercised and the date
on which they expire;
- any minimum number of index warrants exercisable at any one time;
- any maximum number of index warrants that may, subject to Citigroup's
election, be exercised by all warrant holders or by any person or entity
on any day;
- any provisions permitting a warrant holder to condition an exercise of
index warrants;
- the method by which the index warrants may be exercised;
- the currency in which the index warrants will be denominated and in which
payments on the index warrants will be made or the securities that may be
distributed in respect of the index warrants;
- the method of making any foreign currency translation applicable to
payments or distributions on the index warrants;
- the method of providing for a substitute index or indices or otherwise
determining the amount payable in connection with the exercise of index
warrants if an index changes or is no longer available;
- the time or times at which amounts will be payable or distributable in
respect of such index warrants following exercise or automatic exercise;
- any national securities exchange on, or self-regulatory organization with
which, such index warrants will be listed;
- any provisions for issuing such index warrants in certificated form;
- if such index warrants are not issued in book-entry form, the place or
places at and the procedures by which payments or distributions on the
index warrants will be made; and
- any other terms of such index warrants.
Prospective purchasers of index warrants should be aware of special United
States federal income tax considerations applicable to instruments such as the
index warrants. The prospectus supplement relating to each series of index
warrants will describe these tax considerations. The summary of United States
federal income tax considerations contained in the prospectus supplement will be
presented for informational purposes only, however, and will not be intended as
legal or tax advice to prospective purchasers. You are urged to consult your own
tax advisors before purchasing any index warrants.
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BOOK-ENTRY PROCEDURES AND SETTLEMENT FOR INDEX WARRANTS
Subject to the rules of DTC, as the warrant depositary, and unless otherwise
specified in the prospectus supplement, the index warrants offered in such
prospectus supplement will be issued in the form of a single index warrant
global certificate that will be deposited with DTC and registered in its name or
the name of its nominee. Unless and until it is exchanged in whole or in part
for the individual index warrants represented by an index warrant global
certificate, an index warrant global certificate may not be transferred except:
- as a whole by DTC to a nominee of DTC;
- by a nominee of DTC to DTC or another nominee of DTC; or
- by DTC or any such nominee to a successor of DTC or a nominee of such
successor.
Citigroup anticipates that the following provisions will apply to all
depository arrangements.
Upon the issuance of an index warrant global certificate, DTC, as warrant
depositary, will credit, on its book-entry registration and transfer system, the
respective numbers of the individual index warrants represented by such index
warrant global certificate to the accounts of participants. The accounts to be
credited shall be designated by the underwriters of such index warrants or, if
the index warrants are offered and sold directly by Citigroup or through one or
more agents, by Citigroup or the agent or agents. Ownership of beneficial
interests in an index warrant global certificate will be limited to participants
or persons that may hold beneficial interests through participants. Ownership of
beneficial interests in an index warrant global certificate will be shown on,
and the transfer of that ownership 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 indirect participants).
The laws of some states 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 an index warrant
global certificate.
So long as DTC or its nominee is the registered owner of an index warrant
global certificate, DTC or its nominee, as the case may be, will be considered
the sole owner or holder of the index warrants for all purposes under the
related index warrant agreement. Except as set forth below, owners of beneficial
interests in the index warrant global certificate will not be entitled to have
any of the individual index warrants represented by the index warrant global
certificate registered in their names, will not receive or be entitled to
receive physical delivery of any such index warrants in certificated form, and
will not be considered the holders thereof under the related index warrant
agreement.
Citigroup and the Index Warrant Agent will not have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the index warrant global certificate or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
If DTC is at any time unwilling or unable to continue as warrant depositary
and a successor depositary is not appointed by Citigroup within 90 days,
Citigroup will issue individual index warrant certificates in exchange for the
index warrant global certificate. In addition, Citigroup may at any time and in
its sole discretion decide not to have certain index warrants represented by an
index warrant global certificate and, in such event, will issue individual index
warrant certificates in exchange for the global certificate. Further, if
Citigroup so specifies with respect to any index warrants, an owner of a
beneficial interest in an index warrant global certificate may, on such terms
acceptable to Citigroup and the warrant depositary, receive individual index
warrants in exchange for such beneficial interest. In any such instance, an
owner of a beneficial interest in the index warrant global certificate will be
entitled to have index warrants equal in aggregate number to such beneficial
interest registered in its name and will be entitled to physical delivery of
such index warrants. The registered owner of such index warrants will be
entitled to receive any amounts payable in respect of such index warrants, upon
surrender of
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such index warrants to the Index Warrant Agent in accordance with the procedures
set forth in the prospectus supplement.
LISTING
Unless otherwise indicated in the prospectus supplement, the index warrants
will be listed on a national securities exchange or with a self-regulatory
organization, in each case as specified in the prospectus supplement. It is
expected that such organization will stop trading a series of index warrants as
of the close of business on the related expiration date of such index warrants.
MODIFICATION
The index warrant agreement and the terms of the related index warrants may
be amended by Citigroup and the index warrant agent, without the consent of the
holders of any index warrants, for any of the following purposes:
- curing any ambiguity or curing, correcting or supplementing any defective
or inconsistent provision contained therein;
- maintaining the listing of such index warrants on any national securities
exchange or with any other self-regulatory organization;
- registering such index warrants under the Exchange Act, permitting the
issuance of individual index warrant certificates to warrant holders,
reflecting the issuance by Citigroup of additional index warrants of the
same series or reflecting the appointment of a successor depository; or
- for any other purpose which Citigroup may deem necessary or desirable and
which will not materially and adversely affect the interests of the
warrant holders.
Citigroup and the Index Warrant Agent also may modify or amend the index
warrant agreement and the terms of the related index warrants, with the consent
of the holders of not less than a majority of the then outstanding warrants
affected by such modification or amendment, for any purpose. However, no such
modification or amendment may be made without the consent of each holder
affected thereby if such modification or amendment:
- changes the amount to be paid to the warrant holder or the manner in which
that amount is to be determined;
- shortens the period of time during which the index warrants, may be
exercised;
- otherwise materially and adversely affects the exercise rights of the
holders of the index warrants; or
- reduces the percentage of the number of outstanding index warrants the
consent of whose holders is required for modification or amendment of the
index warrant agreement or the terms of the related index warrants.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION
If at any time there is a merger or consolidation involving Citigroup or a
sale, transfer, conveyance, other than lease, or other disposition of all or
substantially all of the assets of Citigroup, then the assuming corporation will
succeed to the obligations of Citigroup under the index warrant agreement and
the related index warrants. Citigroup will then be relieved of any further
obligation under the index warrant agreement and index warrants and may then be
dissolved, wound up or liquidated.
ENFORCEABILITY OF RIGHTS BY WARRANT HOLDERS
Any warrant holder may, without the consent of the Index Warrant Agent or
any other warrant holder, enforce by appropriate legal action on his own behalf
his right to exercise, and to receive payment for, his index warrants.
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DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes certain general terms of Citigroup's
preferred stock to which any prospectus supplement may relate. You should read
the particular terms of any series of preferred stock offered by Citigroup which
will be described in more detail in any prospectus supplement relating to such
series. The prospectus supplement will also state whether any of the terms of
any series may differ from the terms summarized below. The description of
certain provisions of Citigroup's preferred stock are not complete and should be
read together with the detailed provisions of Citigroup's Restated Certificate
of Incorporation and the certificate of designation relating to each particular
series of preferred stock. For a description of Citigroup's outstanding
preferred stock, see "Description of Capital Stock."
GENERAL
The Board of Directors of Citigroup may, without stockholder approval, issue
one or more series of preferred stock. The Board of Directors may also establish
the titles, dividend rates, any redemption provisions, special or relative
rights in the event of liquidation, dissolution, distribution or winding up of
Citigroup, sinking fund provisions, conversion or exchange provisions, voting
rights, and any other preferences, privileges, powers, rights, qualifications,
limitations and restrictions. The preferred stock will be, when issued, fully
paid and nonassessable. Holders of preferred stock will not have any preemptive
rights.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of preferred stock will be named in the
prospectus supplement relating to such series.
RANK
Unless otherwise specified in the prospectus supplement relating to the
shares of any series of preferred stock, such shares will rank on a parity with
each other series of preferred stock and prior to the common stock as to
dividends and distributions of assets.
DIVIDENDS
Holders of each series of preferred stock will be entitled to receive cash
dividends, when, as and if declared by the Board of Directors of Citigroup out
of funds legally available for such dividends. The rates and dates of payment of
such dividends will be set forth in the prospectus supplement relating to such
series of preferred stock. Dividends will be payable to holders of record of
preferred stock as they appear on the books of Citigroup or, if applicable, the
records of the Depositary referred to below under "Description of Depositary
Shares", on the record dates fixed by the Board of Directors. Dividends on any
series of preferred stock may be cumulative or noncumulative.
No full dividends may be declared or paid on funds set apart for the payment
of dividends on any series of preferred stock unless dividends shall have been
paid or set apart for such payment on equity securities ranking on a parity with
respect to dividends with such series of preferred stock. If full dividends are
not so paid, such series of preferred stock shall share dividends ratably with
such other equity securities.
CONVERSION AND EXCHANGE
The prospectus supplement for any series of preferred stock will state the
terms, if any, on which shares of that series are convertible into or
exchangeable for shares of Citigroup's common stock.
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REDEMPTION
A series of preferred stock may be redeemable at any time, in whole or in
part, at the option of Citigroup or the holder thereof and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise upon terms and at
the redemption prices set forth in the prospectus supplement relating to such
series.
In the event of partial redemptions of preferred stock, whether by mandatory
or optional redemption, the shares to be redeemed will be determined by any
method determined to be equitable by the Board of Directors.
On and after a redemption date, unless Citigroup defaults in the payment of
the redemption price, dividends will cease to accrue on shares of preferred
stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Citigroup, holders of each series of preferred stock will be entitled to receive
out of assets of Citigroup available for distribution to stockholders,
distributions upon liquidation in the amount set forth in the prospectus
supplement relating to such series of preferred stock, plus an amount equal to
any accrued and unpaid dividends. Such distributions will be made before any
distribution is made on any securities ranking junior with respect to
liquidation, including common stock. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of Citigroup, the amounts payable with
respect to the preferred stock of any series and any other securities ranking on
a parity with respect to liquidation rights are not paid in full, the holders of
the preferred stock of such series and such other securities will share in any
such distribution of assets of Citigroup on a ratable basis in proportion to the
full liquidation preferences. After payment of the full amount of the
liquidation preference to which they are entitled, the holders of such series of
preferred stock will not be entitled to any further participation in any
distribution of assets of Citigroup.
VOTING RIGHTS
The holders of shares of preferred stock will have no voting rights, except:
- as otherwise stated in the prospectus supplement;
- as otherwise stated in the certificate of designation establishing such
series; or
- as required by applicable law.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
As of the date of this prospectus, Citigroup's authorized capital stock
consists of 6 billion shares of common stock and 30 million shares of preferred
stock. The following summary contains a description of certain general terms of
Citigroup's common stock to which any prospectus supplement may relate. The
descriptions below of certain provisions of Citigroup's common stock and
preferred stock do not purport to be complete and are subject to and qualified
in their entirety by reference to Citigroup's Restated Certificate of
Incorporation and the certificate of designation relating to any series of
preferred stock.
COMMON STOCK
As of December 31, 1998, Citigroup had outstanding approximately 2.3 billion
shares of its common stock. Each holder of common stock is entitled to one vote
per share for the election of directors and for all other matters to be voted on
by Citigroup's stockholders. Except as otherwise provided by law, the holders of
shares of common stock vote as one class together with the shares of the
outstanding Series I Preferred Stock, Series J Preferred Stock and Series K
Preferred Stock which are described below. Holders of common stock may not
cumulate their votes in the election of directors, and are entitled to share
equally in such dividends as may be declared by the Board of Directors out of
funds legally available therefor, but only after payment of dividends required
to be paid on outstanding shares of preferred stock.
Upon voluntary or involuntary liquidation, dissolution or winding up of
Citigroup, the holders of the common stock share ratably in the assets remaining
after payments to creditors and provision for the preference of any preferred
stock. There are no preemptive or other subscription rights, conversion rights
or redemption or sinking fund provisions with respect to shares of common stock.
All of the outstanding shares of common stock are fully paid and nonassessable.
The transfer agent and registrar for the common stock is Citibank, N.A. The
common stock is listed on the New York Stock Exchange, Inc. (the "NYSE") and The
Pacific Exchange, Inc.
PREFERRED STOCK
Under Citigroup's Restated Certificate of Incorporation (as amended, the
"Certificate of Incorporation"), the Board of Directors of Citigroup is
authorized to issue shares of preferred stock in one or more series, and to
establish from time to time a series of preferred stock with the following terms
specified:
- the number of shares to be included in each such series;
- the designation, powers, preferences and rights of the shares of each such
series; and
- the qualifications, limitations or restrictions of such series, except to
the extent stated and expressed in the Certificate of Incorporation.
Prior to the issuance of each series of preferred stock, the Board of
Directors of Citigroup will adopt resolutions creating and designating such
series as a series of preferred stock and such resolutions will be filed in a
certificate of designation (a "Certificate of Designation") as an amendment to
the Certificate of Incorporation. The term "Board of Directors of Citigroup"
includes any duly authorized committee thereof.
The rights of holders of the preferred stock offered hereby will be subject
to, and may be adversely affected by, the rights of holders of any shares of
preferred stock that may be issued in the future. The Board of Directors may
cause shares of preferred stock to be issued in public or private transactions
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<PAGE>
for any proper corporate purpose, which may include issuance to obtain
additional financing in connection with acquisitions or otherwise, and issuance
to officers, directors and employees of Citigroup and its subsidiaries pursuant
to benefit plans or otherwise. Shares of preferred stock issued by Citigroup may
have the effect, under certain circumstances, alone or in combination with
certain other provisions of the Certificate of Incorporation, of rendering more
difficult or discouraging an acquisition of Citigroup deemed undesirable by the
Board of Directors of Citigroup.
Under existing interpretations of The Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") and the Office of Thrift
Supervision (the "OTS"), if the holders of the preferred stock become entitled
to vote for the election of directors because dividends on the preferred stock
are in arrears as described below, preferred stock may then be deemed a "class
of voting securities" and a holder of 25% or more of the preferred stock or a
holder of 5% or more of the preferred stock that otherwise exercises a
"controlling influence" over Citigroup may then be subject to regulation as a
"bank holding company" in accordance with the Bank Holding Company Act (the "BHC
Act"), and a holder of 25% or more of the preferred stock or a holder of 10% or
more of the preferred stock that otherwise possesses certain "control factors"
with respect to Citigroup may then be subject to regulation as a "savings and
loan holding company" in accordance with the Home Owner's Loan Act of 1933, as
amended. In addition, at such time:
- any bank holding company or foreign bank with a U.S. presence generally
would be required to obtain the approval of the Federal Reserve Board
under the BHC Act to acquire or retain 5% or more of the preferred stock;
- any person other than a bank holding company may be required to obtain the
approval of the Federal Reserve Board and the OTS under the Change in Bank
Control Act to acquire or retain 10% or more of the preferred stock; and
- any savings and loan holding company generally could not retain in excess
of 5% of the preferred stock.
Before exercising its option to redeem any shares of preferred stock, Citigroup
will obtain the approval of the Federal Reserve Board to the extent then
required by applicable law.
No full dividends will be declared or paid or set apart for payment on the
preferred stock of any series ranking, as to dividends, on a parity with or
junior to any other series of preferred stock for any period unless full
dividends (1) have been or are contemporaneously declared and paid or (2) have
been declared and a sum sufficient for the payment thereof set apart for such
payment on such series of preferred stock for
- all dividend periods terminating on or prior to the date of payment of
such full cumulative dividends in the case of a series of cumulative
preferred stock; or
- the immediately preceding dividend period in the case of a series of
noncumulative preferred stock.
When dividends are not paid in full upon any series of preferred stock and
any other preferred stock ranking on a parity as to dividends with such series
of preferred stock, all dividends declared upon shares of such series of
preferred stock and any other preferred stock ranking on a parity as to
dividends will be declared pro rata so that the amount of dividends declared per
share on such series of preferred stock and such other preferred stock will in
all cases bear to each other the same ratio that accrued dividends per share
(which, in the case of noncumulative preferred stock, will not include any
cumulation in respect of unpaid dividends for prior dividend periods) on the
shares of such series of preferred stock and such other preferred stock bear to
each other.
Except as provided in the preceding paragraph, unless full dividends on all
outstanding shares of any such series of preferred stock have been declared and
paid or set apart for payment for all past
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dividend periods, in the case of a series of cumulative preferred stock, or for
the immediately preceding dividend period, in the case of a series of
noncumulative preferred stock, no dividends, other than dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, the common stock or another stock of Citigroup ranking
junior to the preferred stock as to dividends and upon liquidation, will be
declared or paid or set aside for payment or other distribution declared or made
upon the common stock or upon any other stock of Citigroup ranking junior to or
on parity with the preferred stock as to dividends or upon liquidation.
Similarly, until such payments have been made or set apart for payment, no
common stock nor any other stock of Citigroup ranking junior to or on parity
with such preferred stock as to dividends or upon liquidation may be redeemed,
purchased or otherwise acquired for any consideration, nor may any moneys be
paid to or made available for a sinking fund for the redemption of any shares of
any such stock, by Citigroup except by conversion into or exchange for stock of
Citigroup ranking junior to the preferred stock as to dividends and upon
liquidation.
All shares of preferred stock will rank on a parity on liquidation and,
unless they are cumulative as to dividends, with each other series. No shares of
preferred stock have any preemptive or subscription rights.
As of the date of this prospectus, Citigroup had outstanding the following
series of preferred stock with the following terms:
<TABLE>
<CAPTION>
REDEMPTION
NUMBER OF PRICE PER DATE NEXT
SHARES DIVIDENDS PER SHARE REDEEMABLE
TITLE OF SERIES OUTSTANDING YEAR ($)(12) BY CITIGROUP VOTING RIGHTS
- ------------------------------------ ----------- ----------------- ------------ --------------------- -------------
<S> <C> <C> <C> <C> <C>
6.365% Cumulative Preferred Stock,
Series F.......................... 1,600,000(1) 6.365% 250 June 16, 2007 No(18)
6.213% Cumulative Preferred Stock,
Series G.......................... 800,000(2) 6.213% 250 July 11, 2007 No(18)
6.231% Cumulative Preferred Stock,
Series H.......................... 800,000(2) 6.231% 250 September 8, 2007 No(18)
Series I Cumulative Convertible
Preferred Stock................... 140,000(3) $90.00 1,000 October 31, 1999(13) Yes(19)
8.08% Cumulative Preferred Stock,
Series J.......................... 400,000(4) $40.40 500 Currently(14) Yes(20)
8.40% Cumulative Preferred Stock,
Series K.......................... 500,000(5) $42.00 500 March 31, 2001 Yes(20)
9.50% Cumulative Preferred Stock,
Series L.......................... -- (6) 9.50% 500 June 30, 2001(15) Yes(21)
5.864% Cumulative Preferred Stock,
Series M.......................... 800,000 (2) 5.864% 250 October 8, 2007 No(22)
Graduated Rate Cumulative Preferred
Stock, Series O................... 625,000 Variable Rate(7) 100 August 15, 1999(16) No(22)
Adjustable Rate Cumulative Preferred
Stock, Series Q................... 700,000 Variable Rate(8) 250 May 31, 1999 No(22)
Adjustable Rate Cumulative Preferred
Stock, Series R................... 400,000 Variable Rate(8) 250 August 31, 1999 No(22)
8.30% Noncumulative Preferred Stock,
Series S.......................... 500,000 8.30%(9) 250 November 15, 1999 No(22)
8 1/2% Noncumulative Preferred
Stock, Series T................... 600,000 8.50%(9) 250 February 15, 2000 No(22)
7 3/4% Cumulative Preferred Stock,
Series U.......................... 500,000 7.75% 250 May 15, 2000 No(22)
Fixed Adjustable Rate Cumulative
Preferred Stock, Series V......... 250,000 Variable Rate(10) 500 February 15, 2006(17) No(22)
Cumulative Adjustable Rate Preferred
Stock, Series Y................... 2,262 Variable Rate(11) 100,000 On any payment date No(18)
5.321% Cumulative Preferred Stock,
Series YY......................... 987 5.321% 1,000,000 December 22, 2018 No(18)
</TABLE>
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- ------------------------------
(1) Evidenced by 8,000,000 depositary shares, each of which represents a
one-fifth interest in a share of such stock.
(2) Evidenced by 4,000,000 depositary shares, each of which represents a
one-fifth interest in a share of such stock.
(3) Each share of Series I Preferred Stock is convertible (at the option of the
holder thereof) into 44.60526 shares of common stock, subject to
anti-dilution adjustment.
(4) Evidenced by 8,000,000 depositary shares, each of which represents a
one-twentieth interest in a share of such stock.
(5) Evidenced by 10,000,000 depositary shares, each of which represents a
one-twentieth interest in a share of such stock.
(6) The Series L Preferred Stock will be issuable upon the settlement of certain
purchase contracts issued as a component of the 9 1/2% Trust Preferred Stock
Units of SI Financing Trust I, a subsidiary of Salomon Smith Barney Holdings
Inc. ("SSBH"). Holders must settle the purchase contracts on June 30, 2021;
provided, however, that SSBH may accelerate settlement of the purchase
contracts to June 30, 2001.
(7) For all quarterly dividend periods ending on or prior to August 15, 1999,
the annual dividend rate is the Five-Year Treasury Rate (as defined in the
Series O Preferred Stock Certificate of Designation) plus 1.50%. Between
August 15, 1999 and August 15, 2004, the annual dividend rate will be the
Five-Year Treasury Rate plus 2.25%. Prior to August 15, 2004, the above
rates may not be less than 7.00% nor greater than 14.00% per year, and after
August 15, 2004, the rates may not be less than 8.00% nor greater than
16.00% per year. The dividend rate will be increased in the event of
specified changes in the Internal Revenue Code that would decrease the
dividends received deduction applicable to corporate stockholders (a "Change
in Tax Law").
(8) For each dividend period the dividend rate will be equal to 84% of the
Effective Rate (as defined below), but not less than 4.50% per year or more
than 10.50% per year. The "Effective Rate" for any dividend period will be
equal to the highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate, each as defined in
the relevant part of the Certificate of Incorporation.
(9) Noncumulative dividend.
(10) The Series V Preferred Stock provides for a cumulative dividend at a rate
that changes over time. For each dividend period up to but not including
February 15, 2006, the dividend rate will be 5.86% per year. For each
dividend period beginning on or after February 15, 2006, the dividend rate
will be equal to 0.50% plus the Effective Rate, but not less than 6.00% or
more than 12.00%. The dividend rate will be increased in the event of a
Change in Tax Law.
(11) The holders of the Series Y Preferred Stock are entitled to a cumulative
quarterly dividend at an annual rate equal to the greater of (a) the Short
Term Rate (as defined below) and (b) 4.85%. The "Short Term Rate" generally
will be equal to either 85% or 78% of the Money Market Yield (as defined in
the Certificate of Incorporation) of the 90-day rate for commercial paper
multiplied by the stock's $100,000 per share liquidation value.
(12) Amount does not include accrued and unpaid dividends per share.
(13) Redemption is mandatory.
(14) Called for redemption on February 11, 1999. Was first redeemable on March
31, 1998.
(15) Or the date of issuance, whichever is later, in each case at SSBH's option.
(16) If not redeemed on August 15, 1999, also redeemable at any time after
August 15, 2004 or following a Change in Tax Law.
(17) Prior to February 15, 2006, in the event of a Change in Tax Law, Citigroup
at its option may redeem all, but not less than all, of the Series V
Preferred Stock at a price declining over time from $525 per share to $500
per share.
(18) Except (1) as provided by law, (2) under certain circumstances if six
quarterly dividends are in arrears and (3) that a two-thirds vote of all
shares of preferred stock then outstanding voting as a class is required for
Citigroup to (x) create any class of stock having a preference as to
dividends or distributions of assets over such series or (y) alter or change
the provisions of the Certificate of Incorporation so as to adversely affect
the powers, preferences or rights of the holders of such series.
(19) Holders of shares of Series I Preferred Stock are entitled to 44.60526
votes per share when voting as a class with the common stock, subject to
anti-dilution adjustment. The shares of Series I Preferred Stock are
entitled to vote together as a class with the shares of common stock (and
any other shares of capital stock of Citigroup at the time entitled to vote
together as a class) on all matters submitted to a vote of stockholders of
Citigroup. Holders of Series I Preferred Stock have additional voting rights
under certain circumstances if six quarterly dividends are in arrears. In
addition, holders of Series I Preferred Stock together with all other series
of preferred stock, voting as one class, must give their approval by a
two-thirds vote of shares of preferred stock then outstanding in the event
that Citigroup:
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(a) authorizes shares of any class or series of stock having a preference or
priority as to dividends or liquidation ("Senior Stock") over the
preferred stock,
(b) reclassifies any shares of Citigroup stock into shares of Senior Stock,
(c) authorizes any security exchangeable for, convertible into, or
evidencing the right to purchase any shares of Senior Stock,
(d) amends, alters or repeals the Certificate of Incorporation to alter or
change the preferences, rights or powers of preferred stock so as to
affect the preferred stock adversely, or
(e) effects the voluntary liquidation, dissolution or winding up of
Citigroup, or the sale, lease, or exchange of all or substantially all of
the assets, property or business of Citigroup, or merges or consolidates
Citigroup with or into another corporation (except a wholly owned
subsidiary of Citigroup), provided that no separate vote of holders of
preferred stock as a class will be required in the case of a merger or
consolidation or a sale, exchange or conveyance of all or substantially
all of the assets, property or business of Citigroup (any such
transaction, a "transaction") if (A) the resulting, surviving or
acquiring corporation will have after such transaction no stock either
authorized or outstanding (except such stock of Citigroup as may have
been authorized immediately preceding such transaction, or such stock of
the resulting, surviving or acquiring corporation issued in exchange
therefor) ranking prior to, or on a parity with, the preferred stock or
the stock of the resulting, surviving or acquiring corporation and (B) if
each holder of shares of preferred stock immediately preceding such
transaction will receive in exchange therefor the same number of shares
of stock, with substantially the same preferences, rights and powers, of
the resulting, surviving or acquiring corporation (the events described
in clauses (a) through (e) being referred to herein as the "Preferred
Stock Voting Events").
Finally, without obtaining the approval of a majority of the outstanding
shares of preferred stock voting separately as a class, Citigroup may not
amend the Certificate of Incorporation to increase the authorized amount of
preferred stock or to authorize any other stock ranking on a parity with the
preferred stock either as to payment of dividends or upon liquidation.
(20) Holders are entitled to vote together as a class with the shares of common
stock (and any other shares of capital stock of Citigroup at the time
entitled to vote together as a class) on all matters submitted to a vote of
stockholders of Citigroup, provided that, when voting with common stock,
each share of such series is entitled to three votes. Holders of such series
have additional voting rights under certain circumstances if six quarterly
dividends are in arrears. In addition, holders of such series together with
all other series of preferred stock, voting as one class, must give their
approval by a two-thirds vote of the then outstanding shares of preferred
stock upon the occurrence of a Preferred Stock Voting Event. Finally,
without obtaining the approval of a majority of the outstanding shares of
preferred stock voting separately as a class, Citigroup may not amend the
Certificate of Incorporation so as to increase the authorized amount of
preferred stock or so as to authorize any other class of stock ranking on a
parity with the preferred stock either as to payment of dividends or upon
liquidation.
(21) Holders of Series L Preferred Stock are entitled to three votes per share
when voting together as a class on all matters with the holders of the
common stock (and any other shares of capital stock of Citigroup at the time
entitled to vote together as a class). In addition, if six quarterly
dividends are in arrears the holders of the Series L Preferred Stock will be
entitled to certain additional voting rights. The vote of two-thirds of all
shares of preferred stock voting as a class will be required for Citigroup
to create any class of stock having a preference as to dividends or
distribution of assets over the Series L Preferred Stock.
(22) Except (1) as required by law, (2) under certain circumstances if dividends
are in arrears for such number of dividend periods, whether or not
consecutive, which in the aggregate contain not less than 540 days, and (3)
that a two-thirds vote of all shares of preferred stock then outstanding
voting as a class is required for Citigroup to (x) create any class of stock
having a preference as to dividends or distributions of assets over such
series or (y) alter or change the provisions of the Certificate of
Incorporation so as to materially and adversely affect the powers,
preferences or rights of the holders of such series.
CERTAIN PROVISIONS OF CITIGROUP'S CERTIFICATE OF INCORPORATION AND BY-LAWS
BUSINESS COMBINATIONS. The Certificate of Incorporation requires the
affirmative vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the then outstanding shares of voting stock, voting together as a
single class, excluding from such number of outstanding shares and from such
required vote voting stock beneficially owned by any interested stockholder
(generally, a 25% stockholder), to approve any merger or other business
combination (which would include a merger, sale of $25,000,000 of assets, and
similar extraordinary corporate transactions) between, or otherwise involving,
Citigroup and any interested stockholder, unless the transaction has been
approved by a majority of the continuing directors of Citigroup, or unless
certain minimum price, form of consideration and procedural requirements are
satisfied.
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AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BY-LAWS. Under the
Certificate of Incorporation, the alteration, amendment or repeal of, or
adoption of any provision inconsistent with the provisions of the Certificate of
Incorporation relating to the issuance of preferred stock or common stock
requires the affirmative vote of the holders of at least 75% of the voting power
of the shares entitled to vote for the election of directors. Amendments of
provisions of the Certificate of Incorporation relating to business combinations
require a vote of the holders of 66 2/3% of the then outstanding shares of
voting stock, excluding voting stock held by interested stockholders, unless 75%
of the Board of Directors recommend such amendment and the directors comprising
such 75% would qualify as Continuing Directors. The Board of Directors, at any
meeting, may alter or amend the By-Laws upon the affirmative vote of at least
66 2/3% of the entire Board of Directors.
VACANCIES. Vacancies on the Board of Directors resulting from an increase
in the number of directors may be filled by a majority of the Board of Directors
then in office, if a quorum is present, and any additional director elected to
fill such a vacancy shall hold office for a term coinciding with the predecessor
director's remaining term. Any other vacancies on the Board of Directors may be
filled by a majority of the directors then in office, even if less than a
quorum.
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DESCRIPTION OF DEPOSITARY SHARES
The following briefly summarizes certain material provisions of the deposit
agreement and of the depositary shares and depositary receipts. The summary is
not complete and should be read together with the forms of deposit agreement and
depositary receipt relating to the preferred stock, which are incorporated by
reference as exhibits to the registration statement of which this prospectus
forms a part. The particular terms of any depositary shares, any depositary
receipts and any deposit agreement relating to a particular series of preferred
stock which vary from the terms set forth below will be set forth in the
applicable prospectus supplement. A copy of the form of deposit agreement,
including the form of depositary receipt, is incorporated by reference as an
exhibit in the registration statement of which this prospectus forms a part.
GENERAL
Citigroup may, at its option, elect to offer fractional shares of preferred
stock, rather than full shares of preferred stock. In such event, Citigroup will
issue receipts for depositary shares, each of which will represent a fraction of
a share of a particular series of preferred stock.
The shares of any series of preferred stock represented by depositary shares
will be deposited under a deposit agreement between Citigroup and a bank or
trust company selected by Citigroup having its principal office in the United
States and having a combined capital and surplus of at least $50,000,000 (the
"Preferred Stock Depositary"). Subject to the terms of the deposit agreement,
each owner of a depositary share will be entitled, in proportion to the
applicable fraction of a share of preferred stock represented by such depositary
share, to all the rights and preferences of the preferred stock represented
thereby, including dividend, voting, redemption, conversion and liquidation
rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of preferred stock in accordance
with the terms of the applicable prospectus supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the deposited preferred stock to the
record holders of depositary shares relating to such preferred stock in
proportion to the number of such depositary shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
depositary shares entitled thereto. If the Preferred Stock Depositary determines
that it is not feasible to make such distribution, it may, with the approval of
Citigroup, sell such property and distribute the net proceeds from such sale to
such holders.
REDEMPTION OF PREFERRED STOCK
If a series of preferred stock represented by depositary shares is to be
redeemed, the depositary shares will be redeemed from the proceeds received by
the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of such series of preferred stock. The depositary shares will be redeemed
by the Preferred Stock Depositary at a price per depositary share equal to the
applicable fraction of the redemption price per share payable in respect of the
shares of preferred stock so redeemed. Whenever Citigroup redeems shares of
preferred stock held by the Preferred Stock Depositary, the Preferred Stock
Depositary will redeem as of the same date the number of depositary shares
representing shares of preferred stock so redeemed. If fewer than all the
depositary shares are to be redeemed, the depositary shares to be redeemed will
be selected by the Preferred Stock Depositary by lot or ratably or by any other
equitable method as the Preferred Stock Depositary may decide.
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WITHDRAWAL OF PREFERRED STOCK
Unless the related depositary shares have previously been called for
redemption, any holder of depositary shares may, upon surrender of the
depositary receipts at the corporate trust office of the Preferred Stock
Depositary, receive the number of whole shares of the related series of
preferred stock and any money or other property represented by such depositary
receipts. Holders of depositary shares making such withdrawals will be entitled
to receive whole shares of preferred stock on the basis set forth in the related
prospectus supplement for such series of preferred stock. However, holders of
such whole shares of preferred stock will not be entitled to deposit such
preferred stock under the deposit agreement or to receive depositary receipts
for such preferred stock after such withdrawal. If the depositary shares
surrendered by the holder in connection with such withdrawal exceed the number
of depositary shares that represent the number of whole shares of preferred
stock to be withdrawn, the Preferred Stock Depositary will deliver to such
holder at the same time a new depositary receipt evidencing such excess number
of depositary shares.
VOTING DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
deposited preferred stock are entitled to vote, the Preferred Stock Depositary
will mail the information contained in such notice of meeting to the record
holders of the depositary shares relating to such series of preferred stock.
Each record holder of such depositary shares on the record date will be entitled
to instruct the Preferred Stock Depositary to vote the amount of the preferred
stock represented by such holder's depositary shares. The Preferred Stock
Depositary will try to vote the amount of such series of preferred stock
represented by such depositary shares in accordance with such instructions.
Citigroup will agree to take all reasonable actions that the Preferred Stock
Depositary determines as necessary to enable the Preferred Stock Depositary to
vote as instructed. The Preferred Stock Depositary will vote all shares of any
series of preferred stock held by it proportionately with instructions received
if it does not receive specific instructions from the holders of depositary
shares representing such series of preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between Citigroup and the Preferred Stock Depositary. However, any amendment
that imposes additional charges or materially and adversely alters any
substantial existing right of the holders of depositary shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the affected depositary shares then outstanding. Every holder of an
outstanding depositary receipt at the time any such amendment becomes effective,
or any transferee of such holder, shall be deemed, by continuing to hold such
depositary receipt, or by reason of the acquisition thereof, to consent and
agree to such amendment and to be bound by the deposit agreement as amended
thereby. The deposit agreement automatically terminates if:
(1) all outstanding depositary shares have been redeemed;
(2) each share of preferred stock has been converted into or exchanged for
common stock; or
(3) there has been a final distribution in respect of the preferred stock in
connection with any liquidation, dissolution or winding up of Citigroup
and such distribution has been distributed to the holders of depositary
shares.
The deposit agreement may be terminated by Citigroup at any time and the
Preferred Stock Depositary will give notice of such termination to the record
holders of all outstanding depositary receipts not less than 30 days prior to
the termination date. In such event, the Preferred Stock Depositary will deliver
or
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make available for delivery to holders of depositary shares, upon surrender of
such depositary shares, the number of whole or fractional shares of the related
series of preferred stock as are represented by such depositary shares.
CHARGES OF PREFERRED STOCK DEPOSITARY; TAXES AND OTHER GOVERNMENTAL CHARGES
No fees, charges and expenses of the Preferred Stock Depositary or any agent
of the Preferred Stock Depositary or of any registrar shall be payable by any
person other than Citigroup, except for any taxes and other governmental charges
and except as provided in the deposit agreement. If the Preferred Stock
Depositary incurs fees, charges or expenses for which it is not otherwise liable
hereunder at the election of a holder of a depositary receipt or other person,
such holder or other person will be liable for such fees, charges and expenses.
All other fees, charges, and expenses of the Preferred Stock Depositary and any
agent of the Preferred Stock Depositary under the deposit agreement and of any
registrar, including, in each case, fees and expenses of counsel, incident to
the performance of their respective obligations hereunder will be paid from time
to time upon consultation and agreement between the Preferred Stock Depositary
and Citigroup as to the amount and nature of such fees, charges and expenses.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to
Citigroup notice of its intent to do so, and Citigroup may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary and its
acceptance of such appointment. Such successor Preferred Stock Depositary must
be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward all reports and communications
from Citigroup which are delivered to the Preferred Stock Depositary and which
Citigroup is required to furnish to the holders of the deposited preferred
stock.
Neither the Preferred Stock Depositary nor Citigroup will be liable if it is
prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the deposit agreement. The obligations of
Citigroup and the Preferred Stock Depositary under the deposit agreement will be
limited to performance in good faith of their duties thereunder and they will
not be obligated to prosecute or defend any legal proceeding in respect of any
depositary shares, depositary receipts or shares of preferred stock unless
satisfactory indemnity is furnished. Citigroup and the Preferred Stock
Depositary may rely upon written advice of counsel or accountants, or upon
information provided by holders of depositary receipts or other persons believed
to be competent and on documents believed to be genuine.
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PLAN OF DISTRIBUTION
Citigroup may offer the offered securities in one or more of the following
ways from time to time:
- to or through underwriters or dealers;
- by itself directly;
- through agents; or
- through a combination of any of these methods of sale.
Any such underwriters, dealers or agents may include any broker-dealer
subsidiary of Citigroup.
The prospectus supplement with respect to an offering of offered securities
will set forth the terms of such offering, including:
- the name or names of any underwriters, dealers or agents;
- the purchase price of the offered securities and the proceeds to Citigroup
from such sale;
- any underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation;
- the initial public offering price;
- any discounts or concessions to be allowed or reallowed or paid to
dealers; and
- 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 offered securities, such offered
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 that stabilize, maintain or otherwise affect
the market price of the offered securities at levels above those that might
otherwise 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, or to continue such activities if commenced.
If dealers are utilized in the sale of offered securities, Citigroup will
sell such offered securities to the dealers as principals. The dealers may then
resell such offered securities to the public at varying
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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 Citigroup to one or more
institutional purchasers, or through agents designated by Citigroup 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 Citigroup 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, Citigroup 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, Citigroup will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase offered securities from Citigroup 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.
The broker-dealer subsidiaries of Citigroup are members of the National
Association of Securities Dealers, Inc. (the "NASD") and may participate in
distributions of the offered securities. Accordingly, offerings of offered
securities in which Citigroup's broker-dealer subsidiaries participate will
conform with the requirements set forth in Rule 2720 of the Conduct Rules of the
NASD.
This prospectus, together with any applicable prospectus, supplement may
also be used by any broker-dealer subsidiary of Citigroup 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
of Citigroup's broker-dealer subsidiaries, including Salomon Smith Barney Inc.,
may act as principal or agent in such transactions. None of Citigroup's
broker-dealer subsidiaries have 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
Citigroup, to indemnification by Citigroup 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,
Citigroup and affiliates of Citigroup 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
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.
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ERISA MATTERS
By virtue of Citigroup's affiliation with certain of its subsidiaries,
including insurance company subsidiaries and its broker-dealer subsidiaries,
that provide services to many employee benefit plans, including investment
advisory and asset management services, Citigroup and any direct or indirect
subsidiary of Citigroup 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 any offered securities are acquired by an employee benefit
plan with respect to which Citigroup or any direct or indirect subsidiary of
Citigroup is a party in interest, unless such offered 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 offered
securities should consult with its legal counsel.
LEGAL MATTERS
The validity of the offered securities will be passed upon for Citigroup by
Stephanie B. Mudick, Esq., General Counsel-Corporate Law of Citigroup, 153 East
53(rd) Street, New York, New York 10043 and/or Skadden, Arps, Slate, Meagher &
Flom LLP, New York, New York, or by counsel to be identified in the applicable
prospectus supplement. Ms. Mudick, General Counsel-Corporate Law and an
Assistant Secretary of Citigroup, beneficially owns, or has rights to acquire
under Citigroup's employee benefit plans, an aggregate of less than 1% of
Citigroup's common stock. Certain legal matters will be passed upon for the
underwriters or agents by Dewey Ballantine LLP, New York, New York, or by
counsel to be identified in the applicable prospectus supplement. Dewey
Ballantine LLP has from time to time acted as counsel for Citigroup and certain
of its subsidiaries and may do so in the future. Kenneth J. Bialkin, a partner
of Skadden, Arps, Slate, Meagher & Flom LLP, is a director of Citigroup, and he
and other attorneys in such firm beneficially own an aggregate of less than 1%
of the common stock of Citigroup. A member of Dewey Ballantine LLP participating
in this matter is the beneficial owner of an aggregate of less than 1% of
Citigroup's common stock.
EXPERTS
The consolidated financial statements and schedules of Travelers Group Inc.
("Travelers") as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997, incorporated by reference or included
in Travelers' Annual Report on Form 10-K, as amended, for the year ended
December 31, 1997, and incorporated by reference herein, have been audited by
KPMG LLP, independent certified public accountants, as set forth in their
reports thereon (also incorporated by reference herein). Those reports state
that KPMG 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 Travelers referred to above are incorporated by
reference herein in reliance upon such reports and upon the authority of said
firms as experts in accounting and auditing.
The consolidated financial statements of Citicorp and its 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 1997 Citicorp Annual Report and Form 10-K, have been incorporated by
reference herein, in reliance upon the report (also incorporated by reference
herein) of KPMG LLP, independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing.
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The supplemental consolidated financial statements and schedule of Citigroup
as of December 31, 1997 and 1996, and for each of the years in the three-year
period ended December 31, 1997, included in Citigroup's Current Report on Form
8-K dated October 26, 1998, have been audited by KPMG LLP, independent certified
public accountants, as set forth in their report thereon, included therein and
incorporated herein by reference. This report states that KPMG LLP did not audit
the Salomon Financials and that their opinion with respect to any amounts
derived from the Salomon Financials is based on the report of Arthur Andersen
LLP. Generally accepted accounting principles proscribe giving effect to a
consummated business combination accounted for by the pooling of interests
method in financial statements that do not include the date of consummation. The
supplemental consolidated financial statements do not extend through the date of
consummation. However, they will become the historical consolidated financial
statements of Citigroup after financial statements covering the date of
consummation of the business combination are issued. The supplemental
consolidated financial statements referred to above are incorporated by
reference herein in reliance upon such reports and upon the authority of said
firms as experts in accounting and auditing. To the extent that KPMG LLP audits
and reports on consolidated financial statements of Citigroup issued at future
dates, and consents to the use of their report thereon, such consolidated
financial statements also will be incorporated by reference in the registration
statement in reliance upon their report and said authority.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
As required by the Securities Act of 1933, Citigroup filed a registration
statement relating to the securities offered by this prospectus with the SEC.
This prospectus is a part of that registration statement, which includes
additional information.
Citigroup files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document Citigroup
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can also request copies of the documents, upon
payment of a duplicating fee, by writing the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. These SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov.
The SEC allows Citigroup to "incorporate by reference" the information it
files with the SEC, which means that Citigroup can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus.
Information that Citigroup files later with the SEC will automatically update
information in this prospectus. In all cases, you should rely on the later
information over different information included in this prospectus or the
accompanying prospectus supplement. Citigroup incorporates by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Exchange Act:
(a) Annual Report on Form 10-K for the year ended December 31, 1997, as
amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998;
(c) Current Reports on Form 8-K dated January 6, 1998, January 26, 1998,
February 17, 1998, April 6, 1998, April 8, 1998, April 20, 1998, June 1,
1998, July 20, 1998, August 18, 1998, August 31, 1998, October 8, 1998,
October 21, 1998, October 26, 1998, October 29, 1998, November 1, 1998,
November 13, 1998 and December 15, 1998; and
(d) Registration Statement on Form 8-B, dated May 10, 1988, describing the
common stock, including any amendments or reports filed for the purpose
of updating such description.
All documents Citigroup files pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the later of
(1) the completion of the offering of the
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securities described in this prospectus and (2) the date the broker-dealer
subsidiaries of Citigroup stop offering securities pursuant to this prospectus
shall be incorporated by reference in this prospectus from the date of filing of
such documents.
You may request a copy of these filings, at no cost, by writing or
telephoning Citigroup at the following address:
Treasurer
Citigroup Inc.
153 East 53(rd) Street
New York, NY 10043
212-559-1000
You should rely only on the information provided in this prospectus and the
prospectus supplement, as well as the information incorporated by reference.
Citigroup has not authorized anyone to provide you with different information.
Citigroup is not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus, the prospectus supplement or any documents incorporated by reference
is accurate as of any date other than the date on the front of the applicable
document.
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The information in this prospectus supplement is not complete and may be
changed. Citigroup Inc. may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus supplement is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 22, 1999
PROSPECTUS SUPPLEMENT
(To prospectus dated , 1999)
$6,000,000,000
[LOGO]
MEDIUM-TERM SENIOR NOTES, SERIES A
MEDIUM-TERM SUBORDINATED NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
GENERAL TERMS OF SALE
The following terms will generally apply to the medium-term senior and
subordinated notes that we will sell from time to time using this prospectus
supplement and the attached prospectus. Citigroup will include information on
the specific terms for each note in a pricing supplement to this prospectus
supplement that Citigroup will deliver to prospective buyers of any note. The
maximum amount that Citigroup expects to receive from the sale of the notes is
between $5,820,000,000 and $5,992,500,000 after paying the agent commissions of
between $7,500,000 and $180,000,000.
<TABLE>
<S> <C>
MATURITY: 9 months or more from the date of
issue.
INTEREST RATES: Fixed, Floating, or Zero Coupon.
BASE FLOATING Floating Interest Rates may be based,
RATES: among others, on:
- LIBOR
- Commercial Paper Rate
- Treasury Rate
- CD Rate
- Prime Rate
- J.J. Kenny Rate
- Eleventh District Cost of Funds Rate
- Federal Funds Rate
INDEXED NOTES: Payments of interest or principal may
be linked to the price of one or more
securities, currencies, commodities or
other goods.
PAYMENT DATES: Generally semi-annually for Fixed Rate
Notes.
Interest on Floating Rate or Indexed
Notes may be paid monthly, quarterly,
semi-annually or annually.
FORM: Certificated or book-entry form.
CURRENCIES: U.S. Dollars and other currencies.
OTHER TERMS: You should review "Description of the Notes"
and the pricing supplement for features that apply to your
notes. Terms of specific notes may permit one or more of
these features:
- May be redeemable or repurchasable by
us;
- May be repayable at your option;
- May be renewable at your option or
extendible at our option;
- Interest rate may be reset at our
option from time to time and be
redeemable by you at the time of any
reset;
- May be issued with Original Issue
Discount for tax purposes; or
- Portion of principal may be payable
prior to maturity.
SALES OF NOTES: Notes may be sold through:
- our broker-dealer subsidiary, as the
Agent, or as principal; or
- such other dealers that Citigroup may
choose.
RISKS: Notes may be subject to certain
indexation and currency risks.
RANKING: Senior Notes are part of our Senior
Indebtedness; and
Subordinated Notes are part of our
Subordinated Indebtedness.
DENOMINATION: Minimum of $1,000, increased in
multiples of $1,000.
</TABLE>
--------------------------
CONSIDER CAREFULLY THE INFORMATION UNDER "RISK FACTORS" BEGINNING ON PAGE
S-3 OF THIS PROSPECTUS SUPPLEMENT.
Neither the Securities and Exchange Commission nor any state securities or
insurance commission has approved or disapproved of these securities or
determined if this prospectus supplement or any accompanying prospectus or
pricing supplement is truthful or complete. Any representation to the contrary
is a criminal offense.
These notes are not deposits or savings accounts but are unsecured debt
obligations of Citigroup Inc. These notes are not insured by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality.
, 1999
SALOMON SMITH BARNEY INC.
<PAGE>
You should only rely on the information contained or incorporated by
reference in this prospectus supplement, the prospectus and in any pricing
supplement. Citigroup has not, and the Agent (as defined below) has not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. Citigroup is not, and the Agent is not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus supplement and
the prospectus, as well as information Citigroup previously filed with the
Securities and Exchange Commission and incorporated by reference, is accurate as
of the date of the applicable document. Citigroup's business, financial
condition, results of operations and prospects may have changed since that date.
An index of defined terms used in this prospectus supplement begins on page
S-39.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Important Currency Information....................................................... S-3
Risk Factors......................................................................... S-3
Description of the Notes............................................................. S-6
Certain United States Federal Income Tax Considerations.............................. S-31
Plan of Distribution................................................................. S-37
Legal Matters........................................................................ S-38
Index of Defined Terms............................................................... S-39
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Prospectus Summary..................................................................... 2
Citigroup Inc.......................................................................... 7
Use of Proceeds and Hedging............................................................ 8
Ratio of Income to Fixed Charges and Ratio of Income to Combined Fixed Charges
Including
Preferred Stock Dividends.......................................................... 9
European Monetary Union................................................................ 10
Description of Debt Securities......................................................... 11
Description of Index Warrants.......................................................... 20
Description of Preferred Stock......................................................... 24
Description of Capital Stock........................................................... 26
Description of Depositary Shares....................................................... 32
Plan of Distribution................................................................... 35
ERISA Matters.......................................................................... 37
Legal Matters.......................................................................... 37
Experts................................................................................ 37
Incorporation of Certain Documents by Reference........................................ 38
</TABLE>
S-2
<PAGE>
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each Note in a currency specified by
Citigroup Inc. (formerly Travelers Group Inc.) ("Citigroup") for such Note. If
requested by a prospective purchaser of a Note having a specified currency other
than U.S. dollars, the Agent may at its discretion arrange for the exchange of
U.S. dollars into such specified currency to enable the purchaser to pay for
such Note. Each such exchange will be made by the Agent on such terms and
subject to such conditions, limitations and charges as the Agent may from time
to time establish in accordance with its regular foreign exchange practice. All
costs of exchange will be borne by the purchaser.
References in this prospectus supplement to "U.S. dollars," "U.S.$,"
"dollar" or "$" are to the lawful currency of the United States.
RISK FACTORS
CURRENCY RISKS
Exchange Rates and Exchange Controls. An investment in "foreign currency
Notes," which are Notes denominated in a specified currency other than U.S.
dollars, entails significant risks that are not associated with a similar
investment in a security denominated in U.S. dollars. Similarly, an investment
in an Indexed Note on which all or a part of any payment due is determined by
reference to a currency other than U.S. dollars entails significant risks that
are not associated with a similar investment in non-Indexed Notes. Such risks
include, without limitation:
- the possibility of significant market changes in rates of exchange between
U.S. dollars and such specified currency;
- the possibility of significant changes in rates of exchange between U.S.
dollars and such specified currency resulting from official redenomination
with respect to such specified currency; and
- the possibility of the imposition or modification of foreign exchange
controls by either the United States or foreign governments.
Such risks generally depend on factors over which Citigroup has no control and
which cannot be readily foreseen, such as economic and political events, and on
the supply of and demand for the relevant currencies. In recent years, rates of
exchange between the U.S. dollar and certain foreign currencies, and between
certain foreign currencies and other foreign currencies, have been volatile, and
such volatility may be expected in the future. Fluctuations that have occurred
in any particular exchange rate in the past are not necessarily indicative,
however, of fluctuations that may occur in the rate during the term of any
foreign currency Note. Depreciation of the specified currency of a foreign
currency Note against U.S. dollars would result in a decrease in the effective
yield of such foreign currency Note below its coupon rate and, in certain
circumstances, could result in a substantial loss to the investor on a U.S.
dollar basis.
Governments have imposed from time to time, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a specified currency, other than U.S. dollars, at the time of payment of
principal of, or premium, if any, or interest on, a foreign currency Note. There
can be no assurance that exchange controls will not restrict or prohibit
payments of principal, and premium, if any, or interest in any such specified
currency. Even if there are no actual exchange controls, it is possible that
such specified currency would not be available to Citigroup when payments on
such Note are due because of circumstances beyond the control of Citigroup. In
any such event, Citigroup will make required payments in U.S. dollars on the
basis described in this prospectus supplement. You should consult your own
financial and legal advisors as to the risks entailed by an investment in Notes
denominated in a currency other than U.S. dollars. See "--Payment Currency" and
"Description of the Notes--Payment of Principal and Interest" below.
S-3
<PAGE>
The information set forth in this prospectus supplement is directed to
prospective purchasers of Notes who are United States residents. Citigroup
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States with respect to any matters that may
affect the purchase or holding of, or receipt of payments of principal, premium
or interest in respect of, Notes. Such persons should consult their advisors
with regard to such matters. Any pricing supplement relating to Notes having a
specified currency other than U.S. dollars will contain a description of any
material exchange controls affecting such currency and any other required
information concerning such currency.
Payment Currency. Except as set forth below, if payment in respect of a
Note is required to be made in a specified currency other than U.S. dollars and
such currency is--
- unavailable due to the imposition of exchange controls or other
circumstances beyond Citigroup's control;
- no longer used by the government of the country issuing such currency; or
- no longer used for the settlement of transactions by public institutions
of or within the international banking community--
then all payments in respect of such Note shall be made in U.S. dollars until
such currency is again available or so used. The amounts so payable on any date
in such currency shall be converted into U.S. dollars on the basis of the most
recently available Market Exchange Rate for such currency or as otherwise
indicated in the applicable pricing supplement. Any payment in respect of such
Note made under such circumstances in U.S. dollars will not constitute an Event
of Default under the indenture under which such Note shall have been issued.
If the specified currency of a Note is officially redenominated, other than
as a result of European Monetary Union, but including, without limitation, an
official redenomination of any such specified currency that is a composite
currency, the obligations of Citigroup with respect to payments on such Note
denominated in such specified currency shall, in all cases, be deemed
immediately following such redenomination to provide for the payment of that
amount of redenominated currency representing the amount of such obligations
immediately before such redenomination. Notes will not provide for any
adjustment to any amount payable under such Notes as a result of (1) any change
in the value of the specified currency of such Notes relative to any other
currency due solely to fluctuations in exchange rates or (2) any redenomination
of any component currency of any composite currency, unless such composite
currency is itself officially redenominated. For a description of the procedure
to be followed in connection with European Monetary Union, see "European
Monetary Union" in the prospectus and any disclosure on European Monetary Union
in an applicable pricing supplement.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies, and vice versa. In addition, banks do
not generally offer non-U.S. dollar-denominated checking or savings account
facilities in the United States. Accordingly, payments on Notes made in a
currency other than U.S. dollars will be made from an account at a bank located
outside the United States unless otherwise specified in the applicable pricing
supplement.
Foreign Currency Judgments. The Notes will be governed by and construed in
accordance with the law of the State of New York. Courts in the United States
customarily have not rendered judgments for money damages denominated in any
currency other than the U.S. dollar. A 1987 amendment to the Judiciary Law of
the State of New York provides, however, that an action based upon an obligation
denominated in a currency other than U.S. dollars will be rendered in the
foreign currency of the underlying obligation. Any judgment awarded in such an
action will be converted into U.S. dollars at the rate of exchange prevailing on
the date of the entry of the judgment or decree.
S-4
<PAGE>
RISKS OF INDEXED NOTES
An investment in Indexed Notes may entail significant risks that are not
associated with a similar investment in a debt instrument that (1) has a fixed
principal amount, (2) is denominated in U.S. dollars and (3) bears interest at
either a fixed rate or a floating rate determined by reference to nationally
published interest rate references. The risks of a particular Indexed Note will
depend on the terms of such Indexed Note. Such risks may include, without
limitation, the possibility of significant changes in the prices of the
"underlying assets," or other objective price, economic or other measures making
up the relevant Index. Underlying assets include:
- securities;
- currencies;
- intangibles;
- goods;
- articles; and
- commodities.
The risks associated with a particular Indexed Note generally depend on
factors over which Citigroup has no control and which cannot readily be
foreseen. These risks include economic and political events and the supply of,
and demand for, the underlying assets. In recent years, currency exchange rates
and prices for various underlying assets have been highly volatile. Such
volatility may be expected in the future. Fluctuations in any such rates or
prices that have occurred in the past are not necessarily indicative, however,
of fluctuations that may occur during the term of any Indexed Note.
In considering whether to purchase Indexed Notes, you should be aware that
the calculation of amounts payable in respect of Indexed Notes may involve
reference to (1) an Index determined by an affiliate of Citigroup or (2) prices
which are published solely by third parties or entities which are not subject to
regulation under the laws of the United States. The risk of loss as a result of
the linkage of principal or interest payments on Indexed Notes to an Index and
to the underlying assets can be substantial. You should consult your own
financial and legal advisors as to the risks entailed by an investment in
Indexed Notes.
S-5
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Medium-Term Senior
Notes, Series A (the "Senior Notes") and Medium-Term Subordinated Notes, Series
A (the "Subordinated Notes" and, together with the Senior Notes, the "Notes")
supplements, the description of the general terms and provisions of the debt
securities set forth in the prospectus. If any specific information regarding
the Notes in this prospectus supplement is inconsistent with the more general
terms of the debt securities described in the prospectus, you should rely on the
information in this prospectus supplement.
The pricing supplement for each offering of Notes will contain the specific
information and terms for that offering. If any information in the pricing
supplement, including any changes in the method of calculating interest on any
Note, is inconsistent with this prospectus supplement, you should rely on the
information in the pricing supplement. The pricing supplement may also add,
update or change information contained in the prospectus and this prospectus
supplement. It is important for you to consider the information contained in the
prospectus, this prospectus supplement and the pricing supplement in making your
investment decision.
GENERAL
Introduction. The Senior Notes are a series of senior debt securities
issued under Citigroup's senior debt indenture. The Subordinated Notes are a
series of subordinated debt securities issued under Citigroup's subordinated
debt indenture. At the date of this prospectus supplement, the Notes offered
pursuant to this prospectus supplement are limited to an aggregate initial
public offering price or purchase price of up to $6,000,000,000 or its
equivalent in one or more foreign or composite currencies, subject to reduction
as a result of the sale of other securities under the registration statement of
which this prospectus supplement and the accompanying prospectus form a part, or
under a registration statement to which this prospectus supplement and the
accompanying prospectus also relate. The amount of Notes sold of either series
will reduce the amount of Notes of the other series that may be sold. Citigroup
reserves the right to withdraw, cancel or modify the offer made by this
prospectus supplement without notice. The aggregate amount of Notes may be
increased from time to time to such larger amount as may be authorized by
Citigroup. The U.S. dollar equivalent of the public offering price or purchase
price of a Note having a specified currency other than U.S. dollars will be
determined on the basis of the noon buying rate in New York City for cable
transfers in foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York (the "Market Exchange Rate") for such specified
currency on the applicable issue date. Such determination will be made by
Citigroup or its agent, as the Exchange Rate Agent for the applicable series of
Notes.
Ranking. The Senior Notes will constitute part of the Senior Indebtedness
of Citigroup and will rank on an equal basis with all other unsecured debt of
Citigroup other than subordinated debt. The Subordinated Notes will be
subordinate and junior in the right of payment, to the extent and in the manner
set forth in the subordinated debt indenture, to all Senior Indebtedness of
Citigroup. See "Description of Debt Securities--Subordinated Debt" in the
prospectus.
On a consolidated basis, after giving effect to the merger of Citicorp into
a newly formed, wholly owned subsidiary of Citigroup as of September 30, 1998,
the aggregate principal amount of Senior Indebtedness of Citigroup outstanding
was approximately $78.1 billion. This Senior Indebtedness consisted of
approximately $42.5 billion of term debt, approximately $21.2 billion of
commercial paper and approximately $14.4 billion of other short-term borrowings.
Forms of Notes. The Notes will be issued in fully registered form only,
without coupons. Each Note will be issued initially as a global security
registered in the name of a nominee of The Depository Trust Company, as
depository (the "Depositary"), or such other depository as is stated in the
pricing supplement (a "Book-Entry Note"). Alternatively, if specified in the
applicable pricing supplement to this prospectus supplement, each Note will be
issued initially as a certificate issued in temporary or
S-6
<PAGE>
definitive form (a "Certificated Note"). Except as set forth in the prospectus
under "Description of Debt Securities--Global Securities," Book-Entry Notes will
not be issuable as Certificated Notes. See "Book-Entry System" below.
Denominations. Unless otherwise specified in the applicable pricing
supplement, the authorized denominations of Notes denominated in U.S. dollars
will be $1,000 and any larger amount that is an integral multiple of $1,000. The
authorized denominations of Notes having a specified currency other than U.S.
dollars will be the approximate equivalents in the specified currency.
Maturity. Unless otherwise specified in the applicable pricing supplement,
each Note will mature on a business day more than nine months from its date of
issue, as selected by the purchaser and agreed to by Citigroup (the "Stated
Maturity"). The Stated Maturity date may be subject to extension at the option
of Citigroup. Each Note may also be subject to redemption at the option of
Citigroup, or to repayment at the option of the holder, prior to its Stated
Maturity. Each Note having a specified currency of Pounds Sterling will mature
in compliance with such regulations as the Bank of England may promulgate from
time to time.
Additional Information. The pricing supplement relating to a Note will
describe the following terms:
- the specified currency for such Note;
- whether such Note
(1) bears interest at a fixed rate (a "Fixed Rate Note"), which rate may
be zero in the case of certain OID Notes;
(2) is a floating rate (a "Floating Rate Note"); and/or
(3) is an amortizing note on which a portion or all the principal amount
is payable prior to Stated Maturity in accordance with a schedule,
by application of a formula, or by reference to an index (an
"Amortizing Note"); and/or
(4)is an indexed note (an "Indexed Note") on which the amount of any
interest payment, in the case of an Indexed Rate Note, and/or the
principal amount payable at maturity, in the case of an Indexed
Principal Note, will be determined by reference to the level of
prices, or changes in prices, or differences between prices, of
securities, currencies, intangibles, goods, articles or commodities,
or by application of a formula;
- the price, which will be expressed as a percentage of the aggregate
principal amount or face amount, at which such Note will be issued (the
"Issue Price");
- the date on which such Note will be issued (the "Original Issue Date");
- the date of the Stated Maturity;
- if it is a Fixed Rate Note, the rate per annum at which such Note will
bear interest, if any, and whether and the manner in which such rate may
be changed prior to its Stated Maturity;
- if it is a Floating Rate Note, the Base Rate, the Initial Interest Rate,
the Interest Reset Period or the Interest Reset Dates, the Interest
Payment Dates, and, if applicable, the Index Maturity, the Maximum
Interest Rate, the Minimum Interest Rate, the Spread or Spread Multiplier,
and any other terms relating to the particular method of calculating the
interest rate for such Note and whether and how such Spread or Spread
Multiplier may be changed prior to Stated Maturity;
- whether it is an OID Note;
- if it is an Amortizing Note, the terms for repayment prior to Stated
Maturity;
S-7
<PAGE>
- if it is an Indexed Note, in the case of an Indexed Rate Note, the manner
in which the amount of any interest payment will be determined or, in the
case of an Indexed Principal Note, its face amount and the manner in which
the principal amount payable at Stated Maturity will be determined;
- whether such Note may be redeemed at the option of Citigroup, or repaid at
the option of the holder, prior to Stated Maturity as described under
"Optional Redemption, Repayment and Repurchase" below and, if so, the
provisions relating to such redemption or repayment, including, in the
case of an OID Note or Indexed Note, the information necessary to
determine the amount due upon redemption or repayment;
- whether such Note is subject to an optional extension beyond its Stated
Maturity as described under "Extension of Maturity" below;
- whether such Note will be represented by a global security or a
certificate issued in definitive form;
- any special United States federal income tax consequences of the purchase,
ownership and disposition of certain Notes;
- whether it is a Renewable Note, and, if so, its specific terms;
- the use of proceeds, if materially different than that disclosed in the
accompanying prospectus; and
- any other terms of such Note provided in the accompanying prospectus to be
set forth in a pricing supplement or that are otherwise not inconsistent
with the provisions of the indenture under which such Note will be issued.
As used in this prospectus supplement, "business day" means:
- with respect to any Note, any day that is not a Saturday or Sunday and
that, in The City of New York, is not a day on which banking institutions
generally are authorized or obligated by law or executive order to close;
- with respect to LIBOR Notes only, any such day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market (a
"London Business Day");
- with respect to Notes having a specified currency other than U.S. dollars
only, other than Notes denominated in Euros, any day that, in the
principal financial center (as defined below) of the country of the
specified currency, is not a day on which banking institutions generally
are authorized or obligated by law to close; and
- with respect to Notes denominated in Euros, a day on which the
Trans-European Automated Real-Time Gross Settlement Express Transfer
("TARGET") System is open.
As used above, a "principal financial center" means the capital city of the
country issuing the specified currency. However, with respect to U.S. dollars,
Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian
lire and Swiss francs, the principal financial center shall be The City of New
York, Sydney, Toronto, Frankfurt, Amsterdam, Milan and Zurich, respectively.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of, and any premium and interest on, each Note are payable by
Citigroup in the specified currency for such Note. If the specified currency for
a Note is other than U.S. dollars, Citigroup will, unless otherwise specified in
the applicable pricing supplement, arrange to convert all payments in respect of
such Note into U.S. dollars in the manner described in the following paragraph.
S-8
<PAGE>
The holder of a Note having a specified currency other than U.S. dollars may, if
stated in the applicable pricing supplement and such Note, elect to receive all
payments in respect of such Note in the specified currency by delivery of a
written notice to the Trustee for such Note not later than fifteen calendar days
prior to the applicable payment date, except under the circumstances described
under "Risk Factors--Currency Risks--Payment Currency" above. Such election will
remain in effect until revoked by written notice to such Trustee received not
later than fifteen calendar days prior to the applicable payment date. No such
change of election may be made with respect to payments on any Note with respect
to which an Event of Default has occurred or Citigroup has given notice of
redemption.
In the case of a Note having a specified currency other than U.S. dollars,
the amount of any U.S. dollar payment in respect of such Note will be determined
by the Exchange Rate Agent:
- based on the highest firm bid quotation expressed in U.S. dollars received
by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second business day preceding the applicable payment date, or
if no such rate is quoted on such date, the last date on which such rate
was quoted;
- from three, or if three are not available, then two, recognized foreign
exchange dealers in The City of New York, one or more of which may be the
Agent, and another of which may be the Exchange Rate Agent, selected by
the Exchange Rate Agent; and
- by the quoting dealer for the purchase.
The Exchange Agent will also determine prior to settlement the aggregate
amount of such specified currency payable on a payment date in respect of all
Notes denominated in such specified currency. All currency exchange costs will
be borne by the holders of such Notes by deductions from such payments. If no
such bid quotations are available, such payments will be made in such specified
currency, unless such specified currency is unavailable due to the imposition of
exchange controls or due to other circumstances beyond Citigroup's control, in
which case such payments will be made as described under "Risk Factors--Currency
Risks--Payment Currency" above.
Unless otherwise specified in the applicable pricing supplement, U.S. dollar
payments of interest on Notes, other than interest payable at Stated Maturity,
will be made, except as provided below, by check mailed to the registered
holders of such Notes. In the case of Global Securities representing Book-Entry
Notes, such payments of interest on Notes will be made to a nominee of the
Depositary. However, in the case of a Note issued between a Regular Record Date
and the related Interest Payment Date, unless otherwise specified in the related
pricing supplement, interest for the period beginning on the Original Issue Date
for such Note and ending on such Interest Payment Date will be paid on the next
succeeding Interest Payment Date to the registered holder of such Note on the
related Regular Record Date. A holder of $10,000,000, or its equivalent in a
specified currency other than U.S. dollars, or more in aggregate principal
amount of Notes of like tenor and term, will be entitled to receive such U.S.
dollar payments by wire transfer of immediately available funds. However, such a
holder is entitled to receive such payments only if appropriate wire transfer
instructions are received in writing by the Trustee for such Notes not later
than fifteen calendar days prior to the applicable Interest Payment Date. Unless
otherwise specified in the applicable pricing supplement, principal and any
premium and interest payable at the Stated Maturity of a Note will be paid in
immediately available funds upon surrender of such Note at the corporate trust
office or agency of the Trustee for such Note in The City of New York.
Unless otherwise specified in this prospectus supplement or the applicable
pricing supplement, any payment required to be made in respect of a Note on a
date, including the day of Stated Maturity, that is not a business day for such
Note need not be made on such date. A payment may be made on the next succeeding
business day with the same force and effect as if made on such date, and no
additional interest shall accrue as a result of such delayed payment.
S-9
<PAGE>
Unless otherwise specified in the applicable pricing supplement, if the
principal of any OID Note, other than an Indexed Note is declared to be due and
payable immediately as a result of the acceleration of Stated Maturity, the
amount of principal due and payable with respect to such Note will be limited to
the aggregate principal amount of such Note multiplied by the sum of its Issue
Price, expressed as a percentage of the aggregate principal amount, plus the
original issue discount amortized from the date of issue to the date of
declaration. Amortization will be calculated using the "interest method,"
computed in accordance with generally accepted accounting principles in effect
on the date of declaration.
The Regular Record Date with respect to any Interest Payment Date for a
Floating Rate Note, Fixed Rate Note or an Indexed Rate Note shall be the date,
whether or not a business day, fifteen calendar days immediately preceding such
Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date, or
from the last Interest Payment Date to which interest has been paid or duly
provided for, at the rate per annum stated in the applicable pricing supplement
until its principal amount is paid or made available for payment. However, as
described below under "Subsequent Interest Periods" and "Extension of Maturity,"
or as otherwise may be described in the applicable pricing supplement, the rate
of interest payable on certain Fixed Rate Notes may be subject to adjustment
from time to time.
Unless otherwise set forth in the applicable pricing supplement, interest on
each Fixed Rate Note will be payable semiannually in arrears on such dates as
set forth in the applicable pricing supplement, with each such day being an
"Interest Payment Date," and at Stated Maturity. Unless "Accrue to Pay" is
specified in the applicable pricing supplement or unless otherwise specified in
the applicable pricing supplement, if an Interest Payment Date with respect to
any Fixed Rate Note would otherwise be a day that is not a business day, any
payment required to be made in respect of such Note on such date, including the
day of Stated Maturity, may be made on the next succeeding business day with the
same force and effect as if made on such date. No additional interest will
accrue as a result of such delayed payment. If with respect to any Fixed Rate
Note, "Accrue to Pay" is specified in the applicable pricing supplement, and any
Interest Payment Date with respect to such Fixed Rate Note would otherwise be a
day that is not a business day, such Interest Payment Date shall be postponed to
the next succeeding business day and any payment of interest in respect of such
Interest Payment Date will include interest accrued through the day before such
Interest Payment Date. Unless otherwise specified in the applicable pricing
supplement, interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months ("30 over 360") or, in the case of an
incomplete month, the number of days elapsed.
FLOATING RATE NOTES
The "Initial Interest Period" is the period from the Original Issue Date to,
but not including, the first Interest Reset Date. Each Floating Rate Note will
bear interest at the Initial Interest Rate set forth, or otherwise described, in
the applicable pricing supplement. The "Interest Reset Period" is the period
from each Interest Reset Date to, but not including, the following Interest
Reset Date. The Initial Interest Period and any Interest Reset Period is an
"Interest Period." The interest rate for each Floating Rate Note will be
determined by reference to an interest rate basis (the "Base Rate"), plus or
minus the Spread, if any, or multiplied by the Spread Multiplier, if any. A
"basis point" or "bp" equals one-hundredth of a percentage point. The "Spread"
is the number of basis points that may be specified in the applicable pricing
supplement as being applicable to such Note. The "Spread Multiplier" is the
percentage that may be specified in the applicable pricing supplement as being
applicable to such Note. As described below under "Subsequent Interest Periods"
and "Extension of Maturity," or as may
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<PAGE>
otherwise be so specified in the applicable pricing supplement, the Spread or
Spread Multiplier on certain Floating Rate Notes may be subject to adjustment
from time to time.
The applicable pricing supplement will designate one of the following Base
Rates as applicable to a Floating Rate Note:
- LIBOR (a "LIBOR Note");
- the Commercial Paper Rate (a "Commercial Paper Rate Note");
- the Treasury Rate (a "Treasury Rate Note");
- the Federal Funds Rate (a "Federal Funds Rate Note");
- the CD Rate (a "CD Rate Note");
- the Prime Rate (a "Prime Rate Note");
- the J.J. Kenny Rate (a "J.J. Kenny Rate Note");
- the Eleventh District Cost of Funds Rate (an "Eleventh District Cost of
Funds Rate Note"); or
- such other Base Rate as is set forth in the applicable pricing supplement
and in such Note.
The "Index Maturity" for any Floating Rate Note is the period of maturity of
the instrument or obligation from which the Base Rate is calculated.
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication, published by the Board
of Governors of the Federal Reserve System.
"H.15 Daily Update" means the daily update of the Board of Governors of the
Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any
successor site or publication.
"Calculation Date," where applicable, means the date by which the
Calculation Agent is to calculate the interest rate for Floating Rate Notes
which shall be the earlier of (1) the tenth calendar day after the related Rate
Determination Date, or if any such day is not a business day, the next
succeeding business day or (2) the business day preceding the applicable
Interest Payment Date or the Stated Maturity, as the case may be.
As specified in the applicable pricing supplement, a Floating Rate Note may
also have either or both of the following, which in each case will be expressed
as a rate per annum on a simple interest basis:
- a maximum limitation, or ceiling, on the rate at which interest may accrue
during any interest period ("Maximum Interest Rate") and/or
- a minimum limitation, or floor, on the rate at which interest may accrue
during any interest period ("Minimum Interest Rate").
In addition to any Maximum Interest Rate that may be applicable to any
Floating Rate Note, the interest rate on a Floating Rate Note will in no event
be higher than the maximum rate permitted by applicable law, as the same may be
modified by United States law of general application. The Notes will be governed
by the law of the State of New York. As of the date of this prospectus
supplement, the maximum rate of interest under provisions of the New York penal
law, with certain exceptions, is 25% per annum on a simple interest basis. Such
maximum rate of interest only applies to obligations that are less than
$2,500,000.
Citigroup will appoint and enter into agreements with Calculation Agents to
calculate interest rates on Floating Rate Notes. Unless otherwise specified in a
pricing supplement, The Bank of New York will be the Calculation Agent for each
Senior Note that is a Floating Rate Note. The First National
S-11
<PAGE>
Bank of Chicago will be the Calculation Agent for each Subordinated Note that is
a Floating Rate Note. All determinations of interest by the Calculation Agents
shall, in the absence of manifest error, be conclusive for all purposes and
binding on the holders of the Floating Rate Notes.
The interest rate on each Floating Rate Note will be reset on an "Interest
Reset Date," which means that the interest rate is reset daily, weekly, monthly,
quarterly, semiannually or annually, as specified in the applicable pricing
supplement.
Unless otherwise specified in the applicable pricing supplement, the
Interest Reset Dates will be as follows:
- in the case of Floating Rate Notes that reset daily, each business day;
- in the case of Floating Rate Notes that reset weekly, other than Treasury
Rate Notes, the Wednesday of each week;
- in the case of Treasury Rate Notes that reset weekly and except as
provided below under "Treasury Rate Notes," the Tuesday of each week;
- in the case of Floating Rate Notes that reset monthly, other than Eleventh
District Cost of Funds Rate Notes, the third Wednesday of each month;
- in the case of Floating Rate Notes that are Eleventh District Cost of
Funds Rate Notes, the first calendar day of each month;
- in the case of Floating Rate Notes that reset quarterly, the third
Wednesday of March, June, September and December of each year;
- in the case of Floating Rate Notes that reset semiannually, the third
Wednesday of each of two months of each year specified in the applicable
pricing supplement; and
- in the case of Floating Rate Notes that reset annually, the third
Wednesday of one month of each year specified in the applicable pricing
supplement.
If an Interest Reset Date for any Floating Rate Note would fall on a day that is
not a business day, such Interest Reset Date shall be postponed to the next
succeeding business day. In the case of a LIBOR Note, if postponement to the
next business day would cause the Interest Reset Date to be in the next
succeeding calendar month, the Interest Reset Date shall instead be the
immediately preceding business day. If an auction of direct obligations of
United States Treasury Bills ("Treasury Bills") falls on a day that is an
Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be
the succeeding business day.
Unless otherwise specified in the applicable pricing supplement and except
as set forth in the next sentence, the rate of interest that goes into effect on
any Interest Reset Date shall be determined on a "Rate Determination Date"
preceding such Interest Reset Date, as further described below. Such Rate
Determination Date may be referred to as follows:
- a "CD Rate Determination Date" in the case of a CD Rate Note;
- a "Commercial Paper Rate Determination Date" in the case of a Commercial
Paper Rate Note;
- a "Federal Funds Rate Determination Date" in the case of a Federal Funds
Rate Note;
- a "LIBOR Determination Date" in the case of a LIBOR Note;
- a "Treasury Rate Determination Date" or a "Constant Maturity Treasury Rate
Determination Date" in the case of a Treasury Rate Note;
- a "Prime Rate Determination Date" in the case of a Prime Rate Note;
- a "J.J. Kenny Rate Determination Date" in the case of a J.J. Kenny Rate
Note; or
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- an "Eleventh District Cost of Funds Rate Date" in the case of an Eleventh
District Cost of Funds Rate Note.
Unless otherwise specified in the applicable pricing supplement, interest
payable in respect of Floating Rate Notes shall be the interest accrued from and
including the Original Issue Date or the last date to which interest has been
paid, as the case may be, to but excluding the applicable Interest Payment Date.
With respect to a Floating Rate Note with more than one Interest Reset Date
during any period for which accrued interest is being calculated, accrued
interest shall be calculated by multiplying the principal amount of such Note,
or, in the case of a Floating Rate Note that is an Indexed Principal Note, its
Face Amount, as indicated in the applicable pricing supplement, by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which accrued
interest is being calculated. Unless otherwise specified in the applicable
pricing supplement, the interest factor, which is expressed as a decimal
calculated to seven decimal places without rounding, for each such day will be
computed by dividing the interest rate in effect on such day by 360 ("Actual
over 360"), in the case of LIBOR Notes, Prime Rate Notes, J.J. Kenny Rate Notes,
Eleventh District Cost of Funds Rate Notes, Commercial Paper Rate Notes, Federal
Funds Rate Notes and CD Rate Notes. In the case of Treasury Rate Notes, the
interest factor for each such day will be computed by dividing such interest
rate by the actual number of days in the year ("Actual over Actual"). For
purposes of making the foregoing calculation, the interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. With
respect to all other Floating Rate Notes, accrued interest shall be calculated
by multiplying the principal amount of such Note, or, in the case of a Floating
Rate Note that is an Indexed Principal Note, its Face Amount, by the interest
rate in effect during the period for which accrued interest is being calculated.
That product is then multiplied by the quotient obtained by dividing the number
of days in the period for which accrued interest is being calculated by 360, in
the case of LIBOR Notes, Prime Rate Notes, J.J. Kenny Rate Notes, Eleventh
District Cost of Funds Rate Notes, Commercial Paper Rate Notes, Federal Funds
Rate Notes and CD Rate Notes. In the case of Treasury Rate Notes, such product
is multiplied by the quotient obtained by dividing the number of days in the
period for which accrued interest is being calculated by the actual number of
days in the year.
Unless otherwise specified in the applicable pricing supplement, all
percentages resulting from any calculation of the rate of interest on a Floating
Rate Note will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point rounded upward. All
currency amounts used in, or resulting from, such calculation on Floating Rate
Notes will be rounded to the nearest one-hundredth of a unit. For purposes of
such rounding, .005 of a unit shall be rounded upward.
Unless otherwise indicated in the applicable pricing supplement and except
as provided below, interest will be payable as follows.
- In the case of Floating Rate Notes that reset daily, weekly or monthly,
other than Eleventh District Cost of Funds Rate Notes, interest will be
payable on the third Wednesday of each month or on the third Wednesday of
March, June, September and December of each year, as specified in the
applicable pricing supplement.
- In the case of Eleventh District Cost of Funds Rate Notes, interest will
be payable on the first calendar day of each March, June, September and
December, as specified in the applicable pricing supplement.
- In the case of Floating Rate Notes that reset quarterly, interest will be
payable on the third Wednesday of March, June, September, and December of
each year.
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- In the case of Floating Rate Notes that reset semiannually, interest will
be payable on the third Wednesday of each of two months of each year
specified in the applicable pricing supplement.
- In the case of Floating Rate Notes that reset annually, interest will be
payable on the third Wednesday of one month of each year specified in the
applicable pricing supplement.
In each of these cases, interest will also be payable at maturity or on an
"Interest Payment Date."
If an Interest Payment Date with respect to any Floating Rate Note would
fall on a day that is not a business day, such Interest Payment Date shall be
postponed to the next succeeding business day. In the case of a LIBOR Note, if
postponement to the next business day would cause the Interest Payment Date to
be in the next succeeding calendar month, the Interest Payment Date shall
instead be the immediately preceding business day.
If with respect to any Floating Rate Note, the applicable pricing supplement
provides that the Note does not Accrue to Pay, if an Interest Payment Date with
respect to such Floating Rate Note would otherwise be a day that is not a
business day, such Interest Payment Date will not be postponed. The foregoing
notwithstanding, any payment required to be made in respect of such Floating
Rate Note may be made on the next succeeding business day with the same force
and effect as if made on such date. No additional interest shall accrue as a
result of such delayed payment.
Upon the request of the holder of any Floating Rate Note, the Calculation
Agent for such Note will provide the interest rate then in effect and, if
determined, the interest rate that will become effective on the next Interest
Reset Date with respect to such Floating Rate Note.
CD Rate Notes. Each CD Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the CD Rate and the
Spread or Spread Multiplier, if any, specified in such Note and in the
applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the "CD
Rate" for each Interest Reset Period shall be the rate as of the "CD Rate
Determination Date," which is the second business day prior to the Interest
Reset Date for such Interest Reset Period for negotiable certificates of deposit
having the Index Maturity designated in the applicable pricing supplement as
published in H.15(519) under the heading "CDs (Secondary Market)."
The following procedures will be followed if the CD Rate cannot be
determined as described above.
- If the above rate is not published prior to 3:00 p.m., New York City time,
on the Calculation Date pertaining to such CD Rate Determination Date,
then the "CD Rate" for such Interest Reset Period will be the rate on such
CD Rate Determination Date for negotiable certificates of deposit of the
Index Maturity designated in the applicable pricing supplement as
published in the H.15 Daily Update.
- If by 3:00 p.m., New York City time, on such Calculation Date, the above
rate is not yet published in either H.15(519) or in the H.15 Daily Update,
then the "CD Rate" for such Interest Reset Period will be calculated by
the Calculation Agent for such CD Rate Note. Such rate will be the
arithmetic mean of the secondary market offered rates as of 10:00 a.m.,
New York City time, on such CD Rate Determination Date of three leading
nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by the Calculation Agent for such CD Rate Note
for negotiable certificates of deposit of major United States money center
banks of the highest credit standing, in the market for negotiable
certificates of deposit, with a remaining maturity closest to the Index
Maturity designated in the pricing supplement in a denomination of
$5,000,000.
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<PAGE>
- If the dealers selected as aforesaid by such Calculation Agent, however,
are not quoting offered rates as mentioned in the preceding sentence, the
"CD Rate" for such Interest Reset Period will be the same as the CD Rate
for the immediately preceding Interest Reset Period. If there was no such
Interest Reset Period, the CD Rate will be the Initial Interest Rate.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
Commercial Paper Rate Notes. Each Commercial Paper Rate Note will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if
any, specified in such Note and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent for such Commercial Paper Rate Note as of the "Commercial
Paper Rate Determination Date," which is the second business day prior to the
Interest Reset Date for such Interest Reset Period. Such Commercial Paper Rate
shall be the Money Market Yield on such Commercial Paper Rate Determination Date
of the rate for commercial paper having the Index Maturity specified in the
applicable pricing supplement, as such rate shall be published in H.15(519)
under the heading "Commercial Paper--Nonfinancial."
The following procedures will be followed if the Commercial Paper Rate
cannot be determined as described above.
- If such rate is not published prior to 3:00 p.m., New York City time, on
the Calculation Date pertaining to such Commercial Paper Rate
Determination Date, then the "Commercial Paper Rate" for such Interest
Reset Period shall be the Money Market Yield on such Commercial Paper Rate
Determination Date of the rate for commercial paper of the specified Index
Maturity as published in the H.15 Daily Update under the heading
"Commercial Paper--Nonfinancial."
- If by 3:00 p.m., New York City time, on such Calculation Date the above
rate is not yet published in either H.15(519) or in the H.15 Daily Update,
then the "Commercial Paper Rate" for such Interest Reset Period shall be
the Money Market Yield of the arithmetic mean of the offered rates, as of
11:00 a.m., New York City time, on such Commercial Paper Rate
Determination Date, of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent for such Commercial
Paper Rate Note for commercial paper of the specified Index Maturity
placed for an industrial issuer whose bonds are rated "AA" or the
equivalent by a nationally recognized rating agency.
- If the dealers selected as aforesaid by such Calculation Agent, however,
are not quoting offered rates as mentioned in the preceding sentence, the
"Commercial Paper Rate" for such Interest Reset Period will be the same as
the Commercial Paper Rate for the immediately preceding Interest Reset
Period. If there was no such Interest Reset Period, the Commercial Paper
Rate will be the Initial Interest Rate.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
<TABLE>
<S> <C> <C>
DX360
Money Market Yield = ----------- X100
360-(DXM)
</TABLE>
where "D" refers to the applicable 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 specified Index Maturity.
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<PAGE>
Federal Funds Rate Notes. Each Federal Funds Rate Note will bear interest
for each Interest Reset Period at the interest rate calculated with reference to
the Federal Funds Rate and the Spread or Spread Multiplier, if any, specified in
such Note and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the
"Federal Funds Rate" for each Interest Reset Period shall be the effective rate
as of the "Federal Funds Rate Determination Date," which is the second business
day prior to the Interest Reset Date for such Interest Reset Period, for Federal
Funds as published in H.15(519) under the heading "Federal Funds (Effective)."
The following procedures will be followed if the Federal Funds Rate cannot
be determined as described above.
- If the above rate is not published prior to 3:00 p.m., New York City time,
on the Calculation Date pertaining to such Federal Funds Rate
Determination Date, the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date as
published in the H.15 Daily Update under the heading "Federal
Funds/Effective Rate."
- If by 3:00 p.m., New York City time, on such Calculation Date the above
rate is not yet published in either H.15(519) or in the H.15 Daily Update,
then the "Federal Funds Rate" for such Interest Reset Period shall be the
rate on such Federal Funds Rate Determination Date made publicly available
by the Federal Reserve Bank of New York which is equivalent to the rate
which appears in H.15(519) under the heading "Federal Funds (Effective)."
- If such rate, however, is not made publicly available by the Federal
Reserve Bank of New York by 3:00 p.m., New York City time, on such
Calculation Date, the "Federal Funds Rate" for such Interest Reset Period
will be the same as the Federal Funds Rate in effect for the immediately
preceding Interest Reset Period. If there was no such Interest Reset
Period, the Federal Funds Rate will be the Initial Interest Rate.
In the case of a Federal Funds Rate Note that resets daily, the interest
rate on such Note for the period from and including a Monday to but excluding
the succeeding Monday will be reset by the Calculation Agent for such Note on
such second Monday, or, if not a business day, on the next succeeding business
day, to a rate equal to the average of the Federal Funds Rates in effect with
respect to each such day in such week.
LIBOR Notes. Each LIBOR Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to LIBOR and the Spread or
Spread Multiplier, if any, specified in such Note and in the applicable pricing
supplement.
"LIBOR" for each Interest Reset Period will be determined by the Calculation
Agent for such LIBOR Notes as follows.
- On a "LIBOR Determination Date," which is the second London Banking Day
prior to the Interest Reset Date for such Interest Reset Period, the
Calculation Agent for such LIBOR Note will determine the offered rates for
deposits in the specified currency for the period of the Index Maturity
specified in the applicable pricing supplement, commencing on such
Interest Reset Date, which appear on the Designated LIBOR Page at
approximately 11:00 a.m., London time, on such LIBOR Determination Date.
- If "LIBOR Telerate" is designated in the applicable pricing supplement,
"Designated LIBOR Page" means the display designated as page "3750" on the
Bridge Telerate Service, or such other page as may replace page "3750" on
such service or such other service as may be nominated by the British
Bankers' Association for the purpose of displaying the London interbank
offered rates of major banks, and LIBOR for such Interest Reset Period
will be the relevant offered rate as determined by the Calculation Agent.
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<PAGE>
- If "LIBOR Reuters" is designated in the applicable pricing supplement,
"Designated LIBOR 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 such service or such other service as may be nominated by the
British Bankers' Association for the purpose of displaying London
interbank offered rates of major banks, provided, that at least two such
offered rates appear on the Designated LIBOR Page, in which case, "LIBOR"
for such Interest Reset Period will be the arithmetic mean of such offered
rates as determined by the Calculation Agent for such LIBOR Note.
If LIBOR cannot be determined as above, either because the Designated LIBOR
Page is no longer available or because less than two rates appear on page "LIBO"
on the Reuters Monitor Money Rate Services, then on such LIBOR Determination
Date, the Calculation Agent will determine "LIBOR" as follows.
- The Calculation Agent for such LIBOR Note will request the principal
London offices of each of four major banks in the London interbank
market selected by such Calculation Agent to provide such Calculation
Agent with its offered quotations for deposits in the specified
currency for the period of the specified Index Maturity, commencing on
such Interest Reset Date, to prime banks in the London interbank market
at approximately 11:00 a.m., London time, on such LIBOR Determination
Date. Such offered quotations will be in a principal amount equal to an
amount of not less than $1,000,000 or its approximate equivalent in the
specified currency that is representative of a single transaction in
such market at such time.
- If at least two such quotations are provided, "LIBOR" for such Interest
Reset Period will be the arithmetic mean of such quotations.
- If fewer than two such quotations are provided, "LIBOR" for such
Interest Reset Period will be the arithmetic mean of rates quoted by
three major banks in The City of New York selected by the Calculation
Agent for such LIBOR Note at approximately 11:00 a.m., New York City
time, on such LIBOR Determination Date for loans in the specified
currency to leading European banks, for the period of the specified
Index Maturity, commencing on such Interest Reset Date, and in a
principal amount equal to an amount of not less than $1,000,000 or the
approximate equivalent thereof in the specified currency that is
representative of a single transaction in such market at such time.
- If fewer than three banks selected as aforesaid by such Calculation
Agent are quoting rates as mentioned in this sentence, however, "LIBOR"
for such Interest Reset Period will be the same as LIBOR for the
immediately preceding Interest Reset Period. If there was no such
Interest Reset Period, the LIBOR Rate will be the Initial Interest
Rate.
Treasury Rate Notes. Each Treasury Rate Note will bear interest for each
Interest Reset Period at the interest rate calculated with reference to the
Treasury Rate and the Spread or Spread Multiplier, if any, specified in such
Note and in the applicable pricing supplement.
Unless "Constant Maturity" is specified or unless otherwise specified in the
applicable pricing supplement, the "Treasury Rate" for each Interest Reset
Period will be the rate for the auction held on the Treasury Rate Determination
Date for such Interest Reset Period of direct obligations of the United States
("Treasury Securities") that have the Index Maturity specified in the applicable
pricing supplement, as such rate appears on either Telerate Page 56 or Telerate
Page 57 under the heading "AVGE INVEST YIELD."
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The following procedures will be followed if the Treasury Rate cannot be
determined as described above.
- If the above rate is not published prior to 3:00 p.m., New York City time,
on the Calculation Date pertaining to such Treasury Rate Determination
Date, the "Treasury Rate" for such Interest Reset Period will be the
auction average rate, expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis, on
such Treasury Rate Determination Date as otherwise announced by the United
States Department of the Treasury.
- If the results of the auction of Treasury securities having the specified
Index Maturity are not published or reported as provided above by 3:00
p.m., New York City time, on such Calculation Date, or if no such auction
is held on such Treasury Rate Determination Date, then the "Treasury Rate"
for such Interest Reset Period shall be calculated by the Calculation
Agent for such Treasury Rate Note. Such Treasury Rate shall 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 Treasury Rate Determination Date, of three leading
primary United States government securities dealers selected by such
Calculation Agent for the issue of Treasury securities with a remaining
maturity closest to the specified Index Maturity.
- If the dealers selected as aforesaid by such Calculation Agent, however,
are not quoting bid rates as mentioned in this sentence, then the
"Treasury Rate" for such Interest Reset Period will be the same as the
Treasury Rate for the immediately preceding Interest Reset Period. If
there was no such Interest Reset Period, the Treasury Rate will be the
Initial Interest Rate.
The "Treasury Rate Determination Date" for each Interest Reset Period will
be the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury securities would normally be auctioned. Treasury
securities are normally sold at auction on Monday of each week, unless that day
is a legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. If an auction date
shall fall on any day that would otherwise be an Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the business
day immediately following such auction date.
If "Constant Maturity" is specified in the applicable pricing supplement,
the "Treasury Rate" for each Interest Reset Period will be 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 Designated CMT Maturity Index for (1) if
the Designated CMT Telerate Page is 7051, the rate on such Constant Maturity
Treasury Rate Determination Date and (2) if the Designated CMT Telerate Page is
7052, the weekly or monthly average, as specified in the applicable pricing
supplement, for the week or the month, as applicable, ended immediately
preceding the week or month, as applicable, in which the related Constant
Maturity Treasury Rate Determination Date occurs.
The following procedures will be followed if such rate does not appear on
such Designated CMT Telerate Page.
- If such rate is no longer displayed on the relevant page or is not
displayed by 3:00 P.M., New York City time, on the related Calculation
Date, then the Treasury Rate for such Constant Maturity Treasury Rate
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).
- If such rate is no longer published or is not published by 3:00 P.M., New
York City time, on the related Calculation Date, then the Treasury Rate on
such Constant Maturity Treasury Rate
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Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index, or other United States Treasury rate for
the Designated CMT Maturity Index, for the Constant Maturity Treasury Rate
Determination Date with respect to such Interest Reset 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 Treasury Rate on the Constant
Maturity Treasury Rate Determination Date will be calculated by the
Calculation Agent. Such Treasury 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 such Constant
Maturity Treasury Rate Determination Date reported, according to their
written records, by three leading U.S. government securities dealers in
The City of New York selected by the Calculation Agent, one of which may
be the Agent, from five such 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 Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity
Index minus one year.
- If the Calculation Agent is unable to obtain three such Treasury Note
quotations, the Treasury Rate on such Constant Maturity Treasury Rate
Determination Date will be calculated by the Calculation Agent. Such
Treasury Rate will be a yield to maturity based on the arithmetic mean of
the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on such Constant Maturity Treasury Rate Determination Date
of three leading U.S. government securities dealers in the City of New
York, one of which may be the Agent, from five such 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
Designated CMT Maturity Index and a remaining maturity closest to the
Index Maturity specified in the applicable pricing supplement, and in an
amount that is representative for a single transaction in that market at
that time.
- If three or four, and not five, of such dealers are quoting as described
above, then the Treasury 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. However, if fewer than three dealers so
selected by the Calculation Agent are quoting as mentioned above, the
Treasury Rate determined as of such Constant Maturity Treasury Rate
Determination Date will be the Treasury Rate in effect on such Constant
Maturity Treasury Rate Determination Date.
- If two Treasury Notes with an original maturity as described in the third
preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the Calculation Agent will obtain
quotations for the Treasury Note with the shorter remaining term to
maturity and will use such quotations to calculate the Treasury Rate as
set forth above.
"Designated CMT Telerate Page" means the display on the Bridge Telerate
Service, or any successor service on the page specified in the applicable
pricing supplement, or any other page as may replace such page on that service,
or any successor service, for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable pricing supplement, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
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"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities, either one, two, three, five, seven, ten, twenty or
thirty years, specified in the applicable pricing supplement with respect to
which the Treasury Rate will be calculated. If no such maturity is specified in
the applicable pricing supplement, the Designated CMT Maturity Index shall be
two years.
"The Constant Maturity Treasury Rate Determination Date" shall be the second
business day prior to the Interest Reset Date for the applicable Interest Reset
Period.
The Treasury constant maturity rate for a Treasury security maturity (the
"CMT Rate") as published as of any business day is intended to be indicative of
the yield of a U.S. Treasury security having as of such business day a remaining
term to maturity equivalent to such maturity. The CMT Rate as of any business
day is based upon an interpolation by the U.S. Treasury of the daily yield curve
of outstanding Treasury securities. This yield curve, which relates the yield on
a security to its time to maturity, is based on the over-the-counter market bid
yields on actively traded Treasury securities. Such yields are calculated from
composites of quotations reported by leading U.S. government securities dealers,
which may include one or more of the Calculation Agents or other affiliates of
Citigroup. Certain constant maturity yield values are read from the yield curve.
Such interpolation from the yield curve provides a theoretical yield for a
Treasury security having ten years to maturity, for example, even if no
outstanding Treasury security has as of such date exactly ten years remaining to
maturity.
Prime Rate Notes. Prime Rate Notes will bear interest at the interest
rates, calculated with reference to the Prime Rate and the Spread or Spread
Multiplier, if any, specified in the Prime Rate Notes and in the applicable
pricing supplement.
Unless otherwise indicated in the applicable pricing supplement, the "Prime
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such Prime Rate Note as of the "Prime Rate Determination Date," which is the
second business day prior to the Interest Reset Date for such Interest Reset
Period. The Prime Rate shall be the rate made available and subsequently
published on such date in H.15(519) under the heading "Bank Prime Loan."
The following procedures will be followed if the Prime Rate cannot be
determined as described above.
- If the above rate is not published prior to 9:00 A.M., New York City time,
on the related Calculation Date, then the Prime Rate will be the rate on
such Prime Rate Determination Date as published in the H.15 Daily Update
opposite the caption "Bank Prime Loan."
- If the above rate is not published prior to 3:00 P.M., New York City time,
on the related Calculation Date, in either H.15(519) or the H.15 Daily
Update, then the Prime Rate shall 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 such Prime Rate Determination Date.
- If fewer than four such rates appear on the Reuters Screen USPRIME1 Page
for such Prime Rate Determination Date, then the Prime Rate shall 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 Prime Rate Determination Date by four major money center
banks in The City of New York selected by the Calculation Agent.
- If fewer than four such quotations are so provided, then the Prime Rate
shall be the arithmetic mean of four 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 Prime Rate Determination Date as furnished in
The City of New York by the major money center banks, if any, that have
provided such quotations and by a reasonable number of substitute banks or
trust companies. Each such substitute bank or trust company selected by
the Calculation Agent to provide such rate or rates
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must (1) be organized and doing business under the laws of the United
States, or any State of the United States, (2) have total equity capital
of at least $500,000,000 and (3) be subject to supervision or examination
by Federal or State authority. However, if the banks or trust companies so
selected by the Calculation Agent are not quoting as mentioned in the
previous sentence, the Prime Rate will be the Prime Rate in effect on such
Prime Rate Determination Date.
"Reuters Screen USPRIME1 Page" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service, or any successor service,
or such other page as may replace the USPRIME1 Page on the Reuters Monitor Money
Rates Service, or any successor service, for the purpose of displaying prime
rates or base lending rates of major United States banks.
J.J. Kenny Rate Notes. J.J. Kenny Rate Notes will bear interest at the
interest rates, calculated by reference to the J.J. Kenny Rate and the Spread
and/or Spread Multiplier, if any, specified in the J.J. Kenny Rate Notes and in
the applicable pricing supplement.
Unless otherwise indicated in the applicable pricing supplement, the "J.J.
Kenny Rate" for each Interest Reset Period will be determined by the Calculation
Agent for such J.J. Kenny Rate Note as of the "J.J. Kenny Rate Determination
Date." Such J.J. Kenny Rate Determination Date is the second business day prior
to the Interest Reset Date for such Interest Reset Period. The J.J. Kenny Rate
shall be the per annum rate on such date equal to the index made available and
subsequently published by Kenny Information Systems or its successor, based upon
30-day yield evaluations at par of bonds, the interest on which is excludable
from gross income for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), of not less than five "high grade"
component issuers. Kenny Information Systems shall select such issuers from time
to time, including without limitation, issuers of general obligation bonds.
However, the bonds on which the index is based shall not include any bonds the
interest on which is subject to an "alternate minimum tax" or similar tax under
the Code, unless all tax-exempt bonds are subject to such tax.
The following procedure will be followed if the J.J. Kenny Rate cannot be
determined as described above.
If such rate is not made available by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such J.J. Kenny Rate Determination Date, the J.J.
Kenny Rate shall be the rate quoted by a successor indexing agent selected by
Citigroup equaling the prevailing rate for bonds rated in the highest short-term
rating category by Moody's Investors Service, Inc. and Standard & Poor's
Corporation in respect of issuers selected by such successor indexing agent most
closely resembling the "high grade" component issuers selected by Kenny
Information Systems that are subject to tender by their holders for purchase on
not more than seven days' notice and the interest on which is as follows:
- variable on a weekly basis;
- excludable from gross income for federal income tax purposes under the
Code; and
- not subject to an "alternate minimum tax" or similar tax under the Code,
unless all tax-exempt bonds are subject to such tax.
However, if a successor indexing agent is not available, the J.J. Kenny Rate
with respect to such J.J. Kenny Rate Determination Date will be the J.J. Kenny
Rate for the immediately preceding Interest Reset Period. If there was no such
Interest Reset Period, the J.J. Kenny Rate will be the Initial Interest Rate.
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Eleventh District Cost of Funds Rate Notes. Eleventh District Cost of Funds
Rate Notes will bear interest at the interest rates, calculated by reference to
the Eleventh District Cost of Funds Rate and the Spread and/or Spread
Multiplier, if any, specified in the Eleventh District Cost of Funds Rate Notes
and in the applicable pricing supplement.
Unless otherwise indicated in an applicable pricing supplement, the
"Eleventh District Cost of Funds Rate" for each Interest Reset Period will be
determined by the Calculation Agent for such Eleventh District Cost of Funds
Rate Note as of the "Eleventh District Cost of Funds Rate Determination Date."
Such Eleventh District Cost of Funds Rate Determination Date is the last working
day of the month immediately prior to such Interest Reset Date for such Interest
Reset Period on which the Federal Home Loan Bank of San Francisco (the "FHLB of
San Francisco") publishes the Eleventh District Cost of Funds Index (as defined
below). The Eleventh District Cost of Funds Rate shall be the rate equal to the
monthly weighted average cost of funds for the calendar month preceding such
Eleventh District Cost of Funds Rate Determination Date as set forth under the
caption "Eleventh District" on the Telerate Page 7058. Such page shall be deemed
to include any successor page, as determined by the Calculation Agent, as of
11:00 A.M., San Francisco time, on such Eleventh District Cost of Funds Interest
Determination Date.
The following procedures will be followed if the Eleventh District Cost of
Funds Rate cannot be determined as described above.
- If such rate does not appear on Telerate Page 7058 on any related Eleventh
District Cost of Funds Rate Determination Date, the Eleventh District Cost
of Funds Rate for such Eleventh District Cost of Funds Rate Determination
Date shall be the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District that was most
recently announced (the "Eleventh District Cost of Funds Rate Index") by
the FHLB of San Francisco as such cost of funds for the calendar month
preceding the date of such announcement.
- If the FHLB of San Francisco fails to announce such rate for the calendar
month next preceding such Eleventh District Cost of Funds Rate
Determination Date, then the Eleventh District Cost of Funds Rate for such
Eleventh District Cost of Funds Rate Determination Date will be the
Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Determination Date.
Inverse Floating Rate Notes. Any Floating Rate Note may be designated in
the applicable pricing supplement as an "Inverse Floating Rate Note." In such an
event, unless otherwise specified in the applicable pricing supplement, the
interest rate on such Floating Rate Note will be equal to:
- in the case of the period, if any, commencing on the Issue Date, or the
date on which such Note otherwise begins to accrue interest if different
from the Issue Date, up to the first Interest Reset Date, a fixed rate of
interest established by Citigroup as described in the applicable pricing
supplement; and
- in the case of each period commencing on an Interest Reset Date, a fixed
rate of interest specified in the pricing supplement minus the interest
rate determined by reference to the Base Rate as adjusted by the Spread
and/or Spread Multiplier, if any.
However, on any Inverse Floating Rate Note (1) the interest rate will not be
less than zero and (2) the interest rate in effect for the ten days immediately
prior to the date of Maturity of such Inverse Floating Rate Note will be that in
effect on the tenth day preceding such date.
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Floating Rate/Fixed Rate Notes. The applicable pricing supplement may
provide that a Note will be a Floating Rate Note for a specified portion of its
term and a Fixed Rate Note for the remainder of its term. In such an event, the
interest rate on such Note will be determined as provided in this prospectus
supplement as if it were a Floating Rate Note and a Fixed Rate Note for each
such respective period, all as specified in such applicable pricing supplement.
SUBSEQUENT INTEREST PERIODS
The pricing supplement relating to each Note will indicate whether Citigroup
has the option to reset the interest rate, in the case of a Fixed Rate Note,
with respect to such Note or the Spread, Spread Multiplier, or method of
calculation, in the case of a Floating Rate Note, with respect to such Note. If
Citigroup has the option to reset, the pricing supplement will also indicate the
date or dates on which such interest rate or such Spread, Spread Multiplier, or
method of calculation, as the case may be, may be reset (each an "Optional Reset
Date").
Citigroup shall notify the Trustee for a Note whether or not it intends to
exercise such option with respect to such Note at least 45 but not more than 60
days prior to an Optional Reset Date for such Note. Not later than 40 days prior
to such Optional Reset Date, the Trustee for such Note will mail to the holder
of such Note a notice (the "Reset Notice"), first class, postage prepaid,
indicating whether Citigroup has elected to reset the interest rate, in the case
of a Fixed Rate Note, or the Spread, Spread Multiplier or method of calculation,
in the case of a Floating Rate Note. If Citigroup elects to reset the interest
rate, the Spread, Spread Multiplier or method of calculation, the trustee shall
mail to the holder in a manner described above a notice indicating such new
interest rate or such new Spread, Spread Multiplier, or method of calculation,
as the case may be. The notice shall also indicate the provisions, if any, for
redemption during the "Subsequent Interest Period," which is the period from
such Optional Reset Date to the next Optional Reset Date or, if there is no such
next Optional Reset Date, to the Stated Maturity of such Note, including the
date or dates on which or the period or periods during which and the price or
prices at which such redemption may occur during such Subsequent Interest
Period. Upon the transmittal by the Trustee of a Reset Notice to the holder of a
Note, such new interest rate or such new Spread, Spread Multiplier, and/or
method of calculation as the case may be, shall take effect automatically.
Except as modified by the Reset Notice and as described below, such Note will
have the same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to an Optional
Reset Date for a Note, Citigroup may, at its option, revoke the interest rate,
in the case of a Fixed Rate Note, or the Spread or Spread Multiplier, in the
case of a Floating Rate Note, provided for in the Reset Notice with respect to
such Optional Reset Date and establish a higher interest rate, in the case of a
Fixed Rate Note, or a higher Spread or Spread Multiplier, in the case of a
Floating Rate Note, for the Subsequent Interest Period commencing on such
Optional Reset Date. Citigroup can make such revocations by causing the Trustee
for such Note to mail notice of such higher interest rate or higher Spread or
Spread Multiplier, as the case may be, first class, postage prepaid, to the
holder of such Note. Such notice shall be irrevocable. All Notes with respect to
which the interest rate or Spread or Spread Multiplier is reset on an Optional
Reset Date will bear such higher interest rate, in the case of Fixed Rate Notes,
or higher Spread or Spread Multiplier, in the case of Floating Rate Notes,
whether or not tendered for repayment.
The holder of a Note will have the option to elect repayment of such Note by
Citigroup on each Optional Reset Date at a price equal to the principal amount
of such Note plus interest accrued to such Optional Reset Date. In order for a
Note to be repaid on an Optional Reset Date, the holder of such Note must follow
the procedures set forth below under "Optional Redemption, Repayment and
Repurchase" for optional repayment. However, the period for delivery of such
Note or notification to the Trustee for such Note shall be at least 25 but not
more than 35 days prior to such Optional Reset Date. Further, a holder who has
tendered a Note for repayment pursuant to a Reset Notice may, by
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written notice to the Trustee for such Note, revoke any such tender for
repayment until the close of business on the tenth day prior to such Optional
Reset Date.
AMORTIZING NOTES
Citigroup may from time to time offer Amortizing Notes on which a portion or
all the principal amount is payable prior to Stated Maturity (1) in accordance
with a schedule, (2) by application of a formula, or (3) by reference to an
Index (as defined below). Further information concerning additional terms and
conditions of any Amortizing Notes, including terms for repayment of such Notes,
will be set forth in the applicable pricing supplement.
INDEXED NOTES
Citigroup may from time to time offer Indexed Notes on which certain or all
interest payments, in the case of an "Indexed Rate Note," and/or the principal
amount payable at Stated Maturity or earlier redemption or retirement, in the
case of an "Indexed Principal Note," is determined by reference to:
- the principal amount of such Notes or, in the case of an Indexed Principal
Note, the amount designated in the applicable pricing supplement as the
"face amount" of such Indexed Note; and
- an index, which may be based on (1) prices, changes in prices, or
differences between prices, of securities, currencies, intangibles, goods,
articles or commodities, (2) the application of a formula or (3) such
other objective price, economic or other measures as are described in the
applicable pricing supplement (an "Index").
A description of the Index used in any determination of an interest or principal
payment, and the method or formula by which interest or principal payments will
be determined by reference to such Index, will be set forth in the applicable
pricing supplement.
If a Fixed Rate Note, Floating Rate Note or Indexed Rate Note is also an
Indexed Principal Note, the amount of any interest payment will be determined by
reference to the face amount of such Indexed Note unless specified otherwise in
the applicable pricing supplement. If an Indexed Note is also an Indexed
Principal Note, the principal amount payable at Stated Maturity or any earlier
redemption or repayment of the Indexed Note may be different from the face
amount.
If the determination of the Index on which any interest payment or the
principal amount of an Indexed Note is calculated or announced by a third party,
which may be the Agent or another affiliate of Citigroup, and such third party
either suspends the calculation or announcement of such Index or changes the
basis upon which such Index is calculated, other than changes consistent with
policies in effect at the time such Indexed Note was issued and permitted
changes described in the applicable pricing supplement, then such Index shall be
calculated for purposes of such Indexed Note by another third party selected by
Citigroup. The Agent or another affiliate of Citigroup, subject to the same
conditions and controls as applied to the original third party, may be such
third party selected by Citigroup. If for any reason such Index cannot be
calculated on the same basis and subject to the same conditions and controls as
applied to the original third party, then the indexed interest payments, if any,
or any indexed principal amount of such Indexed Note shall be calculated in the
manner set forth in the applicable pricing supplement. Any determination of such
third party shall, in the absence of manifest error, be binding on all parties.
Unless otherwise specified in the applicable pricing supplement, for the
purpose of determining whether holders of the requisite principal amount of
Notes outstanding under the applicable indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
Indexed Notes will be deemed to be the face amount stated on such Notes. Unless
otherwise specified in the applicable pricing supplement, in the event of an
acceleration of the Stated
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Maturity of an Indexed Note, the principal amount payable to the holder of such
Note upon acceleration will be the principal amount determined by reference to
the formula by which the principal amount of such Note would be determined on
the Stated Maturity of such Note, as if the date of acceleration were the Stated
Maturity.
An investment in Indexed Notes entails significant risks, including wide
fluctuations in market value as well as in the amounts of payments due, that are
not associated with a similar investment in a conventional debt security. Such
risks depend on a number of factors including supply and demand for the
particular security, currency, commodity or other good or article to which the
Note is indexed and economic and political events over which Citigroup has no
control. Fluctuations in the price of any particular security or commodity, in
the rates of exchange between particular currencies or in particular indices
that have occurred in the past are not necessarily indicative, however, of
fluctuations in the price or rates of exchange that may occur during the term of
any Indexed Notes. Accordingly, prospective investors should consult their own
financial and legal advisors as to the risks entailed by investment in Indexed
Notes.
DUAL CURRENCY NOTES
Citigroup may from time to time offer "dual currency Notes" as to which
Citigroup has a one time option of making all payments of principal, premium, if
any, and interest on all dual currency Notes issued on the same day and having
the same terms (a "tranche") (which payments would otherwise be made in the
specified currency of such Notes), in the "optional payment currency" specified
in the applicable pricing supplement. Such option will be exercisable in whole
but not in part on an "Option Election Date," which will be any one of the dates
specified in the applicable pricing supplement. Information as to the relative
value of the specified currency compared to the optional payment currency will
be set forth in the applicable pricing supplement.
The pricing supplement for each issuance of dual currency Notes will
specify, among other things, (1) the specified currency of, (2) the optional
payment currency of and (3) the "designated exchange rate" for such issuance.
Such designated exchange rate will be a fixed exchange rate used for converting
amounts denominated in the specified currency into amounts denominated in the
optional payment currency. The pricing supplement will also specify the Option
Election Dates and Interest Payment Dates for the related issuance of dual
currency Notes. Each Option Election Date will be a certain number of days
before an Interest Payment Date or Stated Maturity, as set forth in the
applicable pricing supplement. Each Option Election Date will be the date on
which Citigroup may select whether to make all scheduled payments due thereafter
in the optional payment currency rather than in the specified currency.
If Citigroup makes such an election, the amount payable in the optional
payment currency shall be determined using the designated exchange rate
specified in the applicable pricing supplement. If such election is made, notice
of such election shall be mailed in accordance with the terms of the applicable
tranche of dual currency Notes within two business days of the Option Election
Date. Such notice shall state (1) the first date, whether an Interest Payment
Date and/or Stated Maturity, on which scheduled payments in the optional payment
currency will be made and (2) the designated exchange rate. Any such notice by
Citigroup, once given, may not be withdrawn. The equivalent value in the
specified currency of payments made after such an election may be less, at the
then current exchange rate, than if Citigroup had made such payment in the
specified currency.
For United States federal income tax purposes, holders of dual currency
Notes may be subject to rules which differ from the general rules applicable to
holders of other types of Notes offered by this prospectus supplement. The
United States federal income tax consequences of the purchase, ownership and
disposition of dual currency Notes will be set forth in the applicable pricing
supplement.
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RENEWABLE NOTES
Citigroup may from time to time offer "Renewable Notes," which will mature
on an Interest Payment Date specified in the applicable pricing supplement
occurring in or prior to the twelfth month following the Original Issue Date of
such Notes (the "Initial Maturity Date") unless the term of all or any portion
of any such Notes is renewed in accordance with the procedures described below.
On the Interest Payment Date occurring in the sixth month, unless a
different interval (the "Special Election Interval") is specified in the
applicable pricing supplement, prior to the Initial Maturity Date of a Renewable
Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in
each sixth month, or in the last month of each Special Election Interval, after
such Initial Renewal Date which, together with the Initial Renewal Date,
constitutes a "Renewal Date." The term of such Renewable Note may be extended to
the Interest Payment Date occurring in the twelfth month, or, if a Special
Election Interval is specified in the applicable pricing supplement, the last
month in a period equal to twice the Special Election Interval, after such
Renewal Date, if the holder of such Renewable Note elects to extend the term of
such Renewable Note or any portion as described below. If a holder does not
elect to extend the term of any portion of the principal amount of a Renewable
Note during the specified period prior to any Renewal Date, such portion will
become due and payable on the Interest Payment Date occurring in the sixth
month, or the last month in the Special Election Interval, after such Renewal
Date (the "New Maturity Date").
A holder of a Renewable Note may elect to renew the term of such Renewable
Note, or if so specified in the applicable pricing supplement, any portion of
such Renewable Note, by delivering a notice to such effect to the Trustee or any
duly appointed paying agent at the corporate trust office of the Trustee or
agency of the Trustee in the City of New York. Such notice shall be delivered
not less than 15 nor more than 30 days prior to such Renewal Date, unless
another period is specified in the applicable pricing supplement as the "Special
Election Period." Such election will be irrevocable and will be binding upon
each subsequent holder of such Renewable Note. An election to renew the term of
a Renewable Note may be exercised with respect to less than the entire principal
amount of such Renewable Note only if so specified in the applicable pricing
supplement and only in such principal amount, or any integral multiple in excess
of such amount, as is specified in the applicable pricing supplement.
Notwithstanding the foregoing, the term of the Renewable Notes may not be
extended beyond the Stated Maturity specified for such Renewable Notes in the
applicable pricing supplement.
If the holder does not elect to renew the term, such Renewable Note must be
presented to the Trustee, or any duly appointed paying agent. If such Renewable
Note is a certificate issued in definitive form, it must be presented to the
Trustee as soon as practicable following receipt of such Renewable Note. The
Trustee, or any duly appointed paying agent, shall issue in exchange for such
Note, in the name of such holder, a Note, in a principal amount equal to the
principal amount of such exchanged Renewable Note for which no election to renew
such term was exercised, with terms identical to those specified on such
Renewable Note, except that such Note shall have a fixed, nonrenewable Stated
Maturity on the New Maturity Date.
If an election to renew is made with respect to less than the full principal
amount of a holder's Renewable Note, the Trustee, or any duly appointed paying
agent, shall issue in exchange for such Note in the name of such holder, a
replacement Renewable Note, in a principal amount equal to the principal amount
elected to be renewed of such exchanged Renewable Note, with terms otherwise
identical to such exchanged Renewable Note.
EXTENSION OF MATURITY
The pricing supplement relating to each Note will indicate whether Citigroup
has the option to extend the Stated Maturity of such Note for an "extension
period." Such an extension period is one or
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more periods of whole years from one to five, up to but not beyond the date (the
"Final Maturity") set forth in such pricing supplement.
Citigroup may exercise such option with respect to a Note by notifying the
Trustee for such Note at least 45 but not more than 60 days prior to the old
Stated Maturity of such Note. Not later than 40 days prior to the old Stated
Maturity of such Note, the Trustee for such Note will mail to the Holder of such
Note an "extension notice," first class, postage prepaid. The extension notice
will set forth:
- the election of Citigroup to extend the Stated Maturity of such Note;
- the new Stated Maturity;
- in the case of a Fixed Rate Note, the interest rate applicable to the
extension period;
- in the case of a Floating Rate Note, the Spread, Spread Multiplier or
method of calculation applicable to the extension period; and
- the provisions, if any, for redemption during the extension period,
including the date or dates on which, or the period or periods during
which, and the price or prices at which such redemption may occur during
the extension period.
Upon the mailing by such Trustee of an extension notice to the holder of a
Note, the Stated Maturity of such Note shall be extended automatically, and,
except as modified by the extension notice and as described in the next
paragraph, such Note will have the same terms as prior to the mailing of such
extension notice. Notwithstanding the foregoing, not later than 20 days prior to
the old Stated Maturity of such Note, Citigroup may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread or Spread
Multiplier, in the case of a Floating Rate Note, provided for in the extension
notice for such Note and establish a higher interest rate, in the case of a
Fixed Rate Note, or a higher Spread or Spread Multiplier, in the case of a
Floating Rate Note, for the extension period. Citigroup may so act by causing
the Trustee for such Note to mail notice of such higher interest rate or higher
Spread or Spread Multiplier, as the case may be, first class, postage prepaid,
to the holder of such Note. Such notice shall be irrevocable. All Notes with
respect to which the Stated Maturity is extended will bear such higher interest
rate, in the case of Fixed Rate Notes, or higher Spread or Spread Multiplier, in
the case of Floating Rate Notes, for the extension period, whether or not
tendered for repayment.
If Citigroup extends the Stated Maturity of a Note, the holder of such Note
will have the option to elect repayment of such Note by Citigroup on the old
Stated Maturity at a price equal to the principal amount of such note, plus
interest accrued to such date. In order for a Note to be repaid on the old
Stated Maturity once Citigroup has extended its Stated Maturity, the holder of
such Note must follow the procedures set forth below under "Optional Redemption,
Repayment and Repurchase" for optional repayment. The period for delivery of
such Note or notification to the Trustee for such Note shall be at least 25 but
not more than 35 days prior to the old Stated Maturity. A holder who has
tendered a Note for repayment pursuant to an extension notice may give written
notice to the Trustee for such Note to revoke any such tender for repayment
until the close of business on the tenth day before the old Stated Maturity.
COMBINATION OF PROVISIONS
If so specified in the applicable pricing supplement, any Note may be
subject to all of the provisions, or any combination of the provisions,
described above under "Subsequent Interest Periods," "Extension of Maturity" and
"Renewable Notes."
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BOOK-ENTRY SYSTEM
Upon issuance, and subject to the rules of the Depositary, all Book-Entry
Notes having the same original issue date and otherwise identical terms will be
represented by a single global security. Each global security representing
Book-Entry Notes will be deposited with, or on behalf of the Depositary, and
registered in the name of a nominee of the Depositary. Book-Entry Notes will not
be exchangeable for Certificated Notes and, except under the circumstances
described in the prospectus under "Description of Debt Securities--Global
Securities," will not otherwise be issuable as Certificated Notes.
The Depositary has advised Citigroup and the Agent of the following.
- The Depositary is a limited-purpose trust company organized under New York
Banking Law, a "banking organization" within the meaning of New York
Banking Law, 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 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 in such securities through electronic book-entry changes
in accounts of the participants, which eliminates the need for physical
movement of securities certificates.
- The Depositary's participants include securities brokers and dealers,
including the Agent, 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.
If an issue of Notes is denominated in a currency other than the U.S.
dollar, Citigroup will make payments of principal and any interest in the
foreign currency in which the Notes are denominated or in U.S. dollars. The
Depositary has elected to have all such payments of principal and interest in
U.S. dollars unless notified by any of its participants through which an
interest in the Notes is held that it elects, in accordance with and to the
extent permitted by the applicable pricing supplement and the revelant Note, to
receive such payment of principal or interest in the foreign currency. On or
prior to the third business day after the record date for payment of interest
and twelve days prior to the date for payment of principal, such participant
shall notify the Depositary of (1) its election to receive all, or the specified
portion, of such payment in the foreign currency and (2) its instructions for
wire transfer of such payment to a foreign currency account.
A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the prospectus under
"Description of Debt Securities--Global Securities." The Depositary has
confirmed to Citigroup, the Agent and the Trustee that it intends to follow such
procedures.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The pricing supplement relating to each Note will indicate either that (1)
such Note cannot be redeemed prior to its Stated Maturity or (2) that such Note
will be redeemable at the option of Citigroup, in whole or in part. The
applicable pricing supplement will also indicate (1) the "optional redemption
date" or dates on which such Note may be redeemed and (2) the "redemption price"
at which, together with accrued interest to such optional redemption date, such
Note may be redeemed on each such optional redemption date.
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Unless otherwise specified in the applicable pricing supplement, at least 30
days prior to the date of redemption, such Trustee shall mail notice of such
redemption, first class, postage prepaid, to the holder of such Note. Unless
otherwise specified in the applicable pricing supplement, Citigroup may exercise
such option with respect to a redemption of a Note in part only by notifying the
Trustee for such Note at least 45 days prior to any optional redemption date. In
the event of redemption of a Note in part only, a new Note or Notes for the
unredeemed portion of such Note or Notes shall be issued to the holder of such
Note or Notes upon the cancellation of such Note or Notes. The Notes, other than
Amortizing Notes, will not be subject to any sinking fund.
The pricing supplement relating to each Note will also indicate whether the
holder of such Note will have the option to elect repayment of such Note by
Citigroup prior to its Stated Maturity. If so, such pricing supplement will
specify (1) the "optional repayment date" or dates on which such Note may be
repaid and (2) the "optional repayment price." Such optional repayment price is
the price at which, together with accrued interest to such optional repayment
date, such Note may be repaid on each such optional repayment date.
In order for a Note to be repaid, the Trustee for such Note must receive, at
least 30 but not more than 45 days prior to an optional repayment date:
(1) such Note with the form entitled "Option to Elect Repayment" on the
reverse of such Note duly completed; or
(2) a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. (the "NASD") or a commercial bank or trust company in the
United States setting forth:
- the name of the holder of such Note;
- the principal amount of such Note to be repaid;
- the certificate number or a description of the tenor and terms of
such Note;
- a statement that the option to elect repayment is being exercised;
and
- a guarantee that the Note to be repaid with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly
completed will be received by such Trustee not later than five
business days after the date of such telegram, telex, facsimile
transmission or letter.
If the guarantee procedure described in clause (2) above is followed, then
such Note and form duly completed must be received by such Trustee by such fifth
business day. Any tender of a Note by the holder for repayment, except pursuant
to a reset notice or an extension notice, shall be irrevocable. The repayment
option may be exercised by the holder of a Note for less than the entire
principal amount of such Note, provided, that the principal amount of such Note
remaining outstanding after repayment is an authorized denomination. Upon such
partial repayment, such Note shall be canceled and a new Note or Notes for the
remaining principal amount shall be issued in the name of the holder of such
repaid Note.
If a Note is represented by a global security, the Depositary's nominee will
be the holder of such Note and, therefore, will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right
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to repayment. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner should
consult the broker or other direct or indirect participant through which it
holds an interest in a Note in order to ascertain the cut-off time by which such
an instruction must be given in order for timely notice to be delivered to the
Depositary.
Notwithstanding anything in this prospectus supplement to the contrary, if a
Note is an OID Note, other than an Indexed Note, the amount payable on such Note
in the event of redemption or Citigroup repayment prior to its Stated Maturity,
other than pursuant to an optional redemption by Citigroup at a stated
redemption price, shall be the Amortized Face Amount of such Note as of the date
of redemption or the date of repayment, as the case may be. The Amortized Face
Amount of a Note on any date shall be the amount equal to (1) the Issue Price
set forth on the face of the applicable pricing supplement plus (2) that portion
of the difference between such Issue Price and the stated principal amount of
such Note that has accrued by such date at (a) the Bond Yield to Maturity set
forth on the face of the applicable pricing supplement or (b) if so specified in
the applicable pricing supplement, the Bond Yield to Call set forth on the face
of the Note. Such computations shall be made in accordance with generally
accepted United States bond yield computation principles. However, in no event
shall the Amortized Face Amount of a Note exceed its stated principal amount.
The Bond Yield to Call listed on the face of a pricing supplement shall be
computed on the basis of the first occurring optional redemption date with
respect to such Note and the amount payable on such optional redemption date. In
the event that any such Note is not redeemed on such first occurring optional
redemption date, the Bond Yield to Call with respect to such Note shall be
recomputed on such optional redemption date on the basis of the next occurring
optional redemption date and the amount payable on such optional redemption
date. The Bond Yield to Call shall continue to be so recomputed on each
succeeding optional redemption date until the Note is so redeemed.
Citigroup may at any time purchase Notes at any price in the open market or
otherwise. Notes so purchased by Citigroup may, at the discretion of Citigroup,
be held or resold or surrendered to the Trustee for such Notes for cancellation.
OTHER PROVISIONS
Any provisions with respect to (1) the determination of an interest rate
basis, (2) the specification of an interest rate basis, (3) calculation of the
interest rate applicable to, or the principal payable at maturity on, any Note,
(4) its interest payment dates or (5) any other related matters may be modified
by the terms as specified in the applicable pricing supplement.
DEFEASANCE
The defeasance provisions described in the prospectus will not be applicable
to the Notes.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States federal income tax
considerations that may be relevant to a holder of a Note. The summary is based
on laws, regulations, rulings and decisions now in effect, all of which are
subject to change, possibly with retroactive effect. This summary deals only
with holders that will hold Notes as capital assets. This summary does not
address tax considerations applicable to investors that may be subject to
special tax rules, including, without limitation, banks, tax-exempt entities,
insurance companies, regulated investment companies, common trust funds or
dealers in securities or currencies, persons that will hold Notes as a part of
an integrated investment, including a "straddle" or "conversion transaction,"
comprised of a Note and one or more other positions or persons that have a
"functional currency" other than the U.S. dollar. Any special United States
federal income tax considerations relevant to a particular issue of Notes,
including any Indexed Notes, dual currency Notes or Notes providing for
contingent payments, will be provided in the applicable pricing supplement.
Purchasers of such Notes should carefully examine the applicable pricing
supplement and should consult with their tax advisors with respect to such
Notes.
Investors should consult their tax advisors in determining the tax
consequences to them of holding Notes, including the application to their
particular situation of the United States federal income tax considerations
discussed below, as well as the application of state, local, foreign or other
tax laws.
As used in this prospectus supplement, the term "United States holder" means
a person who is (1) a citizen or resident of the United States, (2) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision or (3) an estate the
income of which is subject to United States federal income taxation regardless
of its source or a trust if (a) a U.S. court is able to exercise primary
supervision over the trust's administration and (b) one or more United States
persons have the authority to control all of the trust's substantial decisions.
The term "United States" means the United States of America, including the
States and the District of Columbia.
UNITED STATES HOLDERS
PAYMENTS OF INTEREST
Payments of "qualified stated interest," as defined below under "Original
Issue Discount," on a Note will be taxable to a United States holder as ordinary
interest income at the time that such payments are accrued or are received (in
accordance with the United States holder's method of tax accounting). If such
payments of interest are made with respect to a Note that is denominated in a
foreign currency, the amount of interest income realized by a United States
holder that uses the cash method of tax accounting will be the U.S. dollar value
of the specified currency payment based on the spot rate of exchange on the date
of receipt regardless of whether the payment in fact is converted into U.S.
dollars. A United States holder that uses the accrual method of tax accounting
will accrue interest income on the foreign currency Note in the relevant foreign
currency and translate the amount accrued into U.S. dollars based on the average
exchange rate in effect during the interest accrual period, or portion thereof
within such holder's taxable year, or, at such holder's election, at the spot
rate of exchange on (1) the last day of the accrual period, or the last day of
the taxable year within such accrual period if the accrual period spans more
than one taxable year, or (2) the date of receipt, if such date is within five
business days of the last day of the accrual period. Such election must be
applied consistently by the United States holder to all debt instruments from
year to year and can be changed only with the consent of the Internal Revenue
Service (the "IRS"). A United States holder that uses the accrual method of tax
accounting will recognize foreign currency gain or loss, which will be treated
as ordinary income or loss, on the receipt of an interest payment made with
respect to a foreign currency Note if the spot rate of exchange on the date the
payment is received differs from the rate applicable to a previous accrual of
that interest income.
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PURCHASE, SALE AND RETIREMENT OF NOTES
A United States holder's tax basis in a Note generally will equal the cost
of such Note to such holder, increased by any amounts includible in income by
the holder as original issue discount ("OID") and market discount and reduced by
any amortized premium (each as described below) and any payments other than
payments of qualified stated interest (as described below) made on such Note. In
the case of a foreign currency Note, the cost of such Note to a United States
holder will be the U.S. dollar value of the foreign currency purchase price on
the date of purchase. In the case of a foreign currency Note that is traded on
an established securities market, a United States holder that uses the cash
method of tax accounting (and, if it so elects, a United States holder that uses
the accrual method of tax accounting) will determine the U.S. dollar value of
the cost of such Note by translating the amount paid at the spot rate of
exchange on the settlement date of the purchase. The amount of any subsequent
adjustments to a United States holder's tax basis in a foreign currency Note in
respect of OID, market discount and premium denominated in a specified currency
other than the U.S. dollar will be determined in the manner described under
"Original Issue Discount," "Market Discount" and "Notes Purchased at a Premium"
below. The conversion of U.S. dollars to another specified currency and the
immediate use of such specified currency to purchase a foreign currency Note
generally will not result in taxable gain or loss for a United States holder.
Upon the sale, exchange or retirement (collectively, a "disposition") of a
Note, a United States holder generally will recognize gain or loss equal to the
difference between the amount realized on the disposition (less any accrued
qualified stated interest, which will be taxable as ordinary income) and the
United States holder's adjusted tax basis in such Note. If a United States
holder receives a specified currency other than the U.S. dollar in respect of
the disposition of a Note, the amount realized will be the U.S. dollar value of
the specified currency received calculated at the spot rate of exchange on the
date of disposition. In the case of a foreign currency Note that is traded on an
established securities market, a United States holder that uses the cash method
of tax accounting, and if it so elects, a United States holder that uses the
accrual method of tax accounting will determine the U.S. dollar value of the
amount realized by translating such amount at the spot rate of exchange on the
settlement date of the disposition. The election available to accrual basis
United States holders in respect of the purchase and sale of foreign currency
Notes traded on an established securities market, discussed above, must be
applied consistently by the United States holder to all debt instruments from
year to year and can be changed only with the consent of the IRS.
Except as discussed below with respect to market discount, Short-Term Notes
(as defined below) and foreign currency gain or loss, gain or loss recognized by
a United States holder will generally be long term capital gain or loss if the
United States holder's holding period for the Note exceeded one year at the time
of disposition.
Gain or loss recognized by a United States holder on the disposition of a
foreign currency Note generally will be treated as ordinary income or loss to
the extent that the gain or loss is attributable to changes in exchange rates
during the period in which the holder held such Note.
ORIGINAL ISSUE DISCOUNT
In General. Notes with a term greater than one year may be issued with OID
for United States federal income tax purposes ("OID Notes"). For United States
federal income tax purposes, United States holders generally must accrue OID in
gross income over the term of the OID Notes on a constant yield basis,
regardless of their regular method of tax accounting. As a result, United States
holders generally will recognize taxable income in respect of an OID Note in
advance of the receipt of cash attributable to such income.
OID generally will arise if the "stated redemption price at maturity" of the
Note exceeds its "issue price" by more than a DE MINIMIS amount (0.25% of the
Note's stated redemption price at maturity
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multiplied by the number of complete years to maturity), or if a Note has
certain interest payment characteristics (e.g., interest holidays, interest
payable in additional securities or stepped interest). For this purpose, the
"issue price" of a Note is the first price at which a substantial amount of
Notes is sold for cash (other than to bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement agents or
wholesalers), and the "stated redemption price at maturity" of a Note is the sum
of all payments due under the Note, other than payments of "qualified stated
interest." The term "qualified stated interest" generally means stated interest
that is unconditionally payable in cash or property (other than debt instruments
of the issuer) at least annually during the entire term of the OID Note at a
single fixed rate of interest or, subject to certain conditions, based on one or
more interest indices.
For each taxable year of a United States holder, the amount of OID that must
be included in gross income in respect of an OID Note will be the sum of the
daily portions of OID for each day during such taxable year (or any portion
thereof) in which such a United States holder held the OID Note. Such daily
portions are determined by allocating to each day in an accrual period a pro
rata portion of the OID allocable to that accrual period. Accrual periods may be
of any length and may vary in length over the term of an OID Note, provided that
such accrual period is no longer than one year and each scheduled payment of
principal or interest occurs on the first day or the final day of such period.
The amount of OID allocable to any accrual period generally will equal the
product of the OID Note's "adjusted issue price" at the beginning of such
accrual period multiplied by its yield to maturity (determined on the basis of
compounding at the close of each accrual period and properly adjusted for the
length of the accrual period) and subtracting from that product the amount (if
any) of qualified stated interest allocable to that accrual period. The
"adjusted issue price" of an OID Note at the beginning of any accrual period
will equal the issue price of the OID Note, as defined above, increased by
previously accrued OID from prior accrual periods, and reduced by any payment
made on such Note (other than payments of qualified stated interest) on or
before the first day of the accrual period.
Foreign Currency Notes. In the case of an OID Note that is also a foreign
currency Note, a United States holder should determine the U.S. dollar amount
includible in income as OID for each accrual period by (a) calculating the
amount of OID allocable to each accrual period in the specified currency using
the constant-yield method described above, and (b) translating the amount of the
specified currency so derived at the average exchange rate in effect during that
accrual period (or portion thereof within a United States holder's taxable year)
or, at the United States holder's election (as described above under "Payments
of Interest"), at the spot rate of exchange on (1) the last day of the accrual
period (or the last day of the taxable year within such accrual period if the
accrual period spans more than one taxable year), or (2) on the date of receipt,
if such date is within five business days of the last day of the accrual period.
All payments on an OID Note (other than payments of qualified stated interest)
will generally be viewed first as payments of previously accrued OID (to the
extent thereof), with payments attributed first to the earliest accrued OID, and
then as payments of principal. Upon the receipt of an amount attributable to OID
(whether in connection with a payment of an amount that is not qualified stated
interest or the disposition of the OID Note), a United States holder will
recognize ordinary income or loss measured by the difference between the amount
received (translated into U.S. dollars at the spot rate of exchange on the date
of receipt or on the date of disposition of the OID Note, as the case may be)
and the amount accrued (using the spot rate of exchange applicable to such
previous accrual).
Acquisition Premium. A United States holder that purchases an OID Note for
an amount less than or equal to the sum of all amounts payable on the OID Note
after the purchase date other than payments of qualified stated interest (the
"remaining redemption amount") but in excess of the OID Note's adjusted issue
price (any such excess being "acquisition premium") generally is permitted to
reduce the daily portions of OID by a fraction, the numerator of which is the
excess of the United
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States holder's adjusted tax basis in the OID Note immediately after its
purchase over the OID Note's adjusted issue price, and the denominator of which
is the excess of remaining redemption amount over the OID Note's adjusted issue
price.
Certain of the Notes may be subject to special redemption, repayment or
interest rate reset features, as indicated in the applicable pricing supplement.
Notes containing such features, in particular OID Notes, may be subject to
special rules that differ from the general rules discussed above. Accordingly,
purchasers of Notes with such features should carefully examine the applicable
pricing supplement and should consult their tax advisors with respect to such
Notes.
MARKET DISCOUNT
If a United States holder purchases a Note, other than a Short-Term Note (as
described below), for an amount that is less than the Note's stated redemption
price at maturity or, in the case of an OID Note, the Note's "revised issue
price" (I.E., the Note's issue price, increased by the amount of accrued OID),
the Note will be considered to have "market discount." The market discount rules
are subject to a DE MINIMIS rule similar to the rule relating to DE MINIMIS OID,
described above. Any gain recognized by the United States holder on the
disposition of Notes having market discount generally will be treated as
ordinary income to the extent of the market discount that accrued on the Note
while held by such United States holder. Alternatively, the United States holder
may elect to include market discount in income currently over the life of the
Note. Such an election will apply to market discount Notes acquired by the
United States holder on or after the first day of the first taxable year to
which such election applies and is revocable only with the consent of the IRS.
Market discount will accrue on a straight-line basis unless the United States
holder elects to accrue the market discount on a constant-yield method. Such an
election will apply to the Note to which it is made and is irrevocable. Unless
the United States holder elects to include market discount in income on a
current basis, as described above, the United States holder could be required to
defer the deduction of a portion of the interest paid on any indebtedness
incurred or maintained to purchase or carry the Note.
Market discount on a foreign currency Note will be accrued by a United
States holder in the specified currency. The amount includible in income by a
United States holder in respect of such accrued market discount will be the U.S.
dollar value of the amount accrued, generally calculated at the spot rate of
exchange on the date that the Note is disposed of by the United States holder.
Any accrued market discount on a foreign currency Note that is currently
includible in income will be translated into U.S. dollars at the average
exchange rate for the accrual period (or portion thereof within the United
States holder's taxable year).
SHORT-TERM NOTES
The rules set forth above also will generally apply to Notes having
maturities of not more than one year from the date of issuance ("Short-Term
Notes"), but with certain modifications.
First, none of the interest on a Short-Term Note is treated as qualified
stated interest but instead is treated as part of the Short-Term Note's stated
redemption price at maturity, thereby giving rise to OID. Thus, all Short-Term
Notes will be OID Notes. OID will be treated as accruing on a Short-Term Note
ratably, or at the election of a United States holder, under a constant yield
method.
Second, a United States holder of a Short-Term Note that uses the cash
method of tax accounting will generally not be required to include OID in
respect of the Short-Term Note in income on a current basis. Such a United
States holder may not be allowed to deduct all of the interest paid or accrued
on any indebtedness incurred or maintained to purchase or carry such Note until
the maturity of the Note or its earlier disposition in a taxable transaction. In
addition, such a United States holder will be required to treat any gain
realized on a disposition of the Note as ordinary income to the extent of the
holder's accrued OID with respect to the Note. Notwithstanding the foregoing, a
United States holder
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of a Short-Term Note using the cash method of tax accounting may elect to accrue
OID into income on a current basis (in which case the limitation on the
deductibility of interest described above will not apply). A United States
holder using the accrual method of tax accounting generally will be required to
include OID on a Short-Term Note in income on a current basis.
Third, any United States holder of a Short-Term Note (whether using the cash
or accrual method of tax accounting) can elect to accrue the "acquisition
discount," if any, with respect to the Note on a current basis. If such an
election is made, the OID rules will not apply to the Note. "Acquisition
discount" is the excess of the Note's stated redemption price at maturity over
the holder's purchase price for the Note. Acquisition discount will be treated
as accruing ratably or, at the election of the United States holder, under a
constant-yield method based on daily compounding.
As described above, certain of the Notes may be subject to special
redemption features. These features may affect the determination of whether a
Note has a maturity of not more than one year and thus is a Short-Term Note.
Purchasers of Notes with such features should carefully examine the applicable
pricing supplement and should consult their tax advisors with respect to such
features.
NOTES PURCHASED AT A PREMIUM
A United States holder that purchases a Note for an amount in excess of the
remaining redemption amount will be considered to have purchased the Note at a
premium. Such holder may elect to amortize such premium (as an offset to
interest income), using a constant-yield method, over the remaining term of the
Note. Such election, once made, generally applies to all debt instruments held
or subsequently acquired by the United States holder on or after the first
taxable year to which the election applies and may be revoked only with the
consent of the IRS. A United States holder that elects to amortize such premium
must reduce its tax basis in a Note by the amount of the premium amortized
during its holding period. With respect to a United States holder that does not
elect to amortize bond premium, the amount of such premium will be included in
the United States holder's tax basis when the Note matures or is disposed of by
the United States holder. Amortizable bond premium in respect of a foreign
currency Note will be computed in the specified currency and will reduce
interest income in the specified currency. At the time amortized bond premium
offsets interest income, exchange gain or loss, which will be taxable as
ordinary income or loss, will be realized with respect to amortized bond premium
on such Note based on the difference between the spot rate of exchange on the
date or dates such premium is recovered through interest payments on the Note
and the spot rate of exchange on the date on which the United States holder
acquired the Note. See "Original Issue Discount--Acquisition Premium," above for
a Note purchased for an amount less than or equal to the remaining redemption
amount but in excess of the Note's adjusted issue price.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Trustee will be required to file information returns with the IRS with
respect to payments made to certain United States holders of Notes. In addition,
certain United States holders may be subject to a 31 percent backup withholding
tax in respect of such payments if they do not provide their taxpayer
identification numbers to the Trustee.
NON-UNITED STATES HOLDERS
Under current United States federal income tax law: (a) payment on a Note to
a holder who is not a United States holder (a "non-United States holder") will
not be subject to withholding of United States federal income tax, provided
that, (1) the holder does not actually or constructively own 10 percent or more
of the combined voting power of all classes of stock of Citigroup and is not a
controlled foreign corporation related to Citigroup through stock ownership and
(2) the beneficial owner provides a statement signed under penalties of perjury
that includes its name and address and certifies that it is
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a non-United States holder in compliance with applicable requirements (or, with
respect to payments made after December 31, 1999, satisfies certain documentary
evidence requirements for establishing that it is a non-United States holder);
(b) a non-United States holder will not be subject to United States federal
income tax on gain realized on the disposition of the Note. Notwithstanding the
above, a Non-United States holder that is subject to United States federal
income taxation on a net income basis generally will be subject to the same
rules to which a United States holder is subject with respect to interest
payments on a Note and with respect to gain or loss realized or recognized on
the disposition of a Note. Special rules might also apply to a Non-United States
holder that is a qualified resident of a country with which the United States
has an income tax treaty.
United States information reporting requirements and backup withholding tax
will not apply to payments on a Note if the beneficial owner certifies its
non-U.S. status under penalties of perjury (or, with respect to payments made
after December 31, 1999, satisfies certain documentary evidence requirements for
establishing that it is a non-United States holder) or otherwise establishes an
exemption. Information reporting requirements and backup withholding tax will
not apply to any payment of the proceeds of the sale of a Note effected outside
the United States by a foreign office of a foreign "broker" (as defined in
applicable Treasury regulations), provided that such broker (1) derives less
than 50% of its gross income for certain periods from the conduct of a trade or
business in the United States, (2) is not a controlled foreign corporation for
United States federal income tax purposes and (3) with respect to payments made
after December 31, 1999, is not a foreign partnership that, at any time during
its taxable year is 50% or more (by income or capital interest) owned by United
States holders or is engaged in the conduct of a U.S. trade or business. Payment
of the proceeds of the sale of a Note effected outside the United States by a
foreign office of any other broker will not be subject to backup withholding
tax, but will be subject to information reporting requirements unless such
broker has documentary evidence in its records that the beneficial owner is a
non-United States person and certain other conditions are met, or the beneficial
owner otherwise establishes an exemption. Payment of the proceeds of a sale of a
Note by the U.S. office of a broker will be subject to information reporting
requirements and backup withholding tax unless the beneficial owner certifies
its non-U.S. status under penalties of perjury or otherwise establishes an
exemption.
The U.S. Treasury Department recently issued final Treasury regulations
governing information reporting and the certification procedures regarding
withholding and backup withholding on certain amounts paid to non-United States
persons after December 31, 1999. Such regulations, among other things, may
change the certification procedures relating to the receipt by intermediaries of
payments on behalf of a beneficial owner of a Note. Prospective investors should
consult their tax advisors regarding the effect, if any, of such new Treasury
regulations on an investment in the Notes.
With respect to payments made after December 31, 1999, for purposes of
applying the rules set forth in the three preceding paragraphs to an entity that
is treated as fiscally transparent (e.g., a partnership or certain trusts) for
United States federal income tax purposes, the beneficial owner means each of
the ultimate beneficial owners of the entity.
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PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis by Citigroup through
Salomon Smith Barney Inc. ("Salomon Smith Barney"), as agent (the "Agent"). The
Agent has agreed to use its reasonable efforts to solicit orders to purchase
Notes, pursuant to a distribution agreement between Citigroup and the Agent. A
form of distribution agreement has been filed as an exhibit to the registration
statement of which this prospectus supplement forms a part. Citigroup will have
the sole right to accept orders to purchase Notes and may reject proposed
purchases in whole or in part. The Agent shall have the right, in its discretion
reasonably exercised and without notice to Citigroup, to reject any proposed
purchase of Notes in whole or in part. Citigroup reserves the right to withdraw,
cancel or modify the offer made by this prospectus supplement, the accompanying
prospectus or any pricing supplement without notice. Citigroup will pay the
Agent a commission of from not more than .125% to not more than 3.000% of the
principal amount of Notes sold through it, depending upon the Stated Maturity.
Citigroup may also sell Notes at a discount to the Agent for its own account
or for resale to one or more purchasers at varying prices related to prevailing
market prices at (1) the time of resale or (2) if set forth in the applicable
pricing supplement, at a fixed public offering price, as determined by the
Agent. After any initial public offering of Notes to be resold to purchasers at
a fixed public offering price, the public offering price and any concession or
discount may be changed. In addition, the Agent may offer and sell Notes
purchased by it as principal to other dealers. Such Notes may be sold at a
discount which, unless otherwise specified in the applicable pricing supplement,
will not exceed the discount to be received by the Agent from Citigroup. Notes
sold by the Agent to a dealer may be sold at a discount and, unless otherwise
specified in the applicable pricing supplement, such discount allowed will not
be in excess of the discount received by the Agent from Citigroup. Unless
otherwise specified in the applicable pricing supplement, any Note purchased by
the Agent as principal will be purchased at 100% of the principal amount or face
amount less a percentage equal to the commission applicable to an agency sale of
a Note of identical maturity. Citigroup reserves the right to sell Notes
directly to investors on its own behalf and to enter into agreements similar to
the distribution agreement with other parties. No commission will be payable nor
will a discount be allowed on any sales made directly by Citigroup.
No Note will have an established trading market when issued. Unless
otherwise specified in the applicable pricing supplement, the Notes will not be
listed on any securities exchange. The Agent may make a market in the Notes, but
the Agent is not obligated to do so and the Agent may discontinue any
market-making at any time without notice, at its sole discretion. There can be
no assurance of the existence or liquidity of a secondary market for any Notes,
or that the maximum amount of Notes will be sold.
The Agent, whether acting as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, as amended.
Citigroup has agreed to indemnify the Agent against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments
that such Agent may be required to make with respect to such liabilities.
Citigroup will reimburse the Agent for certain legal and other expenses incurred
by it in connection with the offer and sale of the Notes.
Unless otherwise specified in the applicable pricing supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in New York City on the date of settlement.
Concurrently with the offering of Notes through the Agent as described in
this prospectus supplement, the Company may issue other securities pursuant to
the indenture referred to in the prospectus.
The broker-dealer subsidiaries of Citigroup, including Salomon Smith Barney,
are members of the NASD and may participate in offerings of the Notes.
Accordingly, offerings of the Notes in which
S-37
<PAGE>
Citigroup's broker-dealer subsidiaries participate will conform with the
requirements set forth in Rule 2720 of the Conduct Rules of the NASD.
This prospectus supplement, the accompanying prospectus and the related
pricing supplement may be used by the Agent or other affiliates of Citigroup in
connection with offers and sales of the Notes offered by this prospectus
supplement in market-making transactions at negotiated prices related to
prevailing market prices at the time of sale. The Agent or such other affiliates
may act as principal or agent in such transactions.
LEGAL MATTERS
The validity of the Notes will be passed upon for Citigroup by Stephanie B.
Mudick, Esq., General Counsel-Corporate Law of Citigroup, 153 East 53(rd)
Street, New York, New York 10043. Ms. Mudick, General Counsel-Corporate Law and
Assistant Secretary of Citigroup, beneficially owns, or has rights to acquire
under Citigroup's employee benefit plans, an aggregate of less than 1% of
Citigroup's common stock. Certain legal matters will be passed upon for the
Agent by Dewey Ballantine LLP, New York, New York. Dewey Ballantine LLP has from
time to time acted as counsel for Citigroup 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 an aggregate of less than 1% of Citigroup's
common stock.
S-38
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
DEFINED TERM PAGE DEFINED
- ---------------------------------------------------------------------------------------------------- ---------------
<S> <C>
30 over 360......................................................................................... S-10
Accrue to Pay....................................................................................... S-10
Acquisition Discount................................................................................ S-35
Acquisition Premium................................................................................. S-33
Actual over 360..................................................................................... S-13
Actual over Actual.................................................................................. S-13
Adjusted Issue Price................................................................................ S-33
Agent............................................................................................... S-37
Amortizing Note..................................................................................... S-7
Amortizing Notes.................................................................................... S-24
Base Rate........................................................................................... S-10
Basis Point......................................................................................... S-10
Book-Entry Note..................................................................................... S-6
Bp.................................................................................................. S-10
Business Day........................................................................................ S-8
Calculation Date.................................................................................... S-11
CD Rate............................................................................................. S-14
CD Rate Determination Date.......................................................................... S-14
CD Rate Note........................................................................................ S-11
Certificated Note................................................................................... S-7
Citigroup........................................................................................... S-3
CMT Rate............................................................................................ S-20
Code................................................................................................ S-21
Commercial Paper Rate............................................................................... S-15
Commercial Paper Rate Determination Date............................................................ S-12
Commercial Paper Rate Note.......................................................................... S-11
Constant Maturity................................................................................... S-17
Constant Maturity Treasury Rate Determination Date.................................................. S-20
Depositary.......................................................................................... S-6
Designated CMT Maturity Index....................................................................... S-20
Designated CMT Telerate Page........................................................................ S-19
Designated Exchange Rate............................................................................ S-25
Designated LIBOR Page............................................................................... S-16
Disposition......................................................................................... S-32
Dual Currency Notes................................................................................. S-25
Eleventh District Cost of Funds Rate................................................................ S-22
Eleventh District Cost of Funds Rate Determination Date............................................. S-22
Eleventh District Cost of Funds Rate Index.......................................................... S-22
Eleventh District Cost of Funds Rate Note........................................................... S-11
Extension Notice.................................................................................... S-27
Extension Period.................................................................................... S-26
Face Amount......................................................................................... S-24
Federal Funds Rate.................................................................................. S-16
Federal Funds Rate Determination Date............................................................... S-16
Federal Funds Rate Note............................................................................. S-11
FHLB of San Francisco............................................................................... S-22
Final Maturity...................................................................................... S-26
Fixed Rate Note..................................................................................... S-7
</TABLE>
S-39
<PAGE>
<TABLE>
<CAPTION>
DEFINED TERM PAGE DEFINED
- ---------------------------------------------------------------------------------------------------- ---------------
<S> <C>
Floating Rate Note.................................................................................. S-7
Foreign Currency Notes.............................................................................. S-3
H.15(519)........................................................................................... S-11
H.15 Daily Update................................................................................... S-11
Index............................................................................................... S-24
Index Maturity...................................................................................... S-11
Indexed Note........................................................................................ S-7
Indexed Principal Note.............................................................................. S-24
Indexed Rate Note................................................................................... S-24
Initial Interest Period............................................................................. S-10
Initial Maturity Date............................................................................... S-26
Initial Renewal Date................................................................................ S-26
Interest Payment Date............................................................................... S-10
Interest Periods.................................................................................... S-10
Interest Reset Date................................................................................. S-12
Interest Reset Period............................................................................... S-10
Inverse Floating Rate Note.......................................................................... S-22
IRS................................................................................................. S-31
Issue Price......................................................................................... S-7
J.J. Kenny Rate..................................................................................... S-21
J.J. Kenny Rate Determination Date.................................................................. S-21
J.J. Kenny Rate Note................................................................................ S-11
LIBOR............................................................................................... S-16
LIBOR Determination Date............................................................................ S-16
LIBOR Note.......................................................................................... S-11
London Business Day................................................................................. S-8
Market Discount..................................................................................... S-34
Market Exchange Rate................................................................................ S-6
Maximum Interest Rate............................................................................... S-11
Minimum Interest Rate............................................................................... S-11
Money Market Yield.................................................................................. S-15
NASD................................................................................................ S-29
New Maturity Date................................................................................... S-26
Non-United States Holder............................................................................ S-35
Notes............................................................................................... S-6
OID................................................................................................. S-32
OID Notes........................................................................................... S-32
Option Election Date................................................................................ S-25
Optional Payment Currency........................................................................... S-25
Optional Redemption Date............................................................................ S-29
Optional Repayment Date............................................................................. S-29
Optional Repayment Price............................................................................ S-29
Optional Reset Date................................................................................. S-23
Original Issue Date................................................................................. S-7
Prime Rate.......................................................................................... S-20
Prime Rate Determination Date....................................................................... S-20
Prime Rate Note..................................................................................... S-11
Principal Financial Center.......................................................................... S-9
Qualified Stated Interest........................................................................... S-31
Rate Determination Date............................................................................. S-12
</TABLE>
S-40
<PAGE>
<TABLE>
<CAPTION>
DEFINED TERM PAGE DEFINED
- ---------------------------------------------------------------------------------------------------- ---------------
<S> <C>
Redemption Price.................................................................................... S-28
Remaining Redemption Amount......................................................................... S-33
Renewable Notes..................................................................................... S-25
Renewal Date........................................................................................ S-26
Reset Notice........................................................................................ S-23
Reuters Screen USPRIME1 Page........................................................................ S-21
Revised Issue Price................................................................................. S-34
Salomon Smith Barney................................................................................ S-37
Senior Notes........................................................................................ S-6
Short-Term Notes.................................................................................... S-34
Special Election Interval........................................................................... S-26
Special Election Period............................................................................. S-26
Spread.............................................................................................. S-10
Spread Multiplier................................................................................... S-10
Stated Maturity..................................................................................... S-7
Stated Redemption Price at Maturity................................................................. S-34
Subordinated Notes.................................................................................. S-6
Subsequent Interest Period.......................................................................... S-23
TARGET.............................................................................................. S-8
Tranche............................................................................................. S-25
Treasury Bills...................................................................................... S-12
Treasury Notes...................................................................................... S-19
Treasury Rate....................................................................................... S-17
Treasury Rate Determination Date.................................................................... S-18
Treasury Rate Note.................................................................................. S-11
Treasury Securities................................................................................. S-17
Underlying Assets................................................................................... S-5
United States....................................................................................... S-31
United States Holder................................................................................ S-31
</TABLE>
S-41
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$6,000,000,000
[LOGO]
MEDIUM-TERM SENIOR NOTES, SERIES A
MEDIUM-TERM SUBORDINATED NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
------------------
PROSPECTUS SUPPLEMENT
, 1999
(INCLUDING PROSPECTUS
DATED , 1999)
------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. Citigroup
Inc. may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 22, 1999
PROSPECTUS
SECURITIES
CITIGROUP CAPITAL
% CAPITAL SECURITIES
$ LIQUIDATION AMOUNT
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CITIGROUP INC.
[LOGO]
---------------------
A brief description of the % capital securities can be found under
"Summary Information-Q&A" in this prospectus.
Application will be made to list the % capital securities on the New York
Stock Exchange, Inc. If approved for listing, Citigroup expects the % capital
securities will begin trading on the New York Stock Exchange, Inc. within 30
days after they are first issued.
YOU ARE URGED TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE
7, WHERE SPECIFIC RISKS ASSOCIATED WITH THESE % CAPITAL SECURITIES ARE
DESCRIBED, ALONG WITH THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE YOU MAKE
YOUR INVESTMENT DECISION.
Neither the Securities and Exchange Commission nor any state securities or
insurance commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
These securities are not deposits or savings accounts. These securities are
not insured by the Federal Deposit Insurance Corporation or any other
governmental agency or instrumentality.
------------------------
<TABLE>
<CAPTION>
PER CAPITAL SECURITY TOTAL
--------------------------- ---------------------------
<S> <C> <C>
Public offering price................................. $ $
Underwriting commissions to be paid by Citigroup
Inc................................................. (1) (1)
Proceeds to Citigroup Capital......................... $ $
</TABLE>
- ------------------------
(1) Underwriting commissions of $ per capital security, or $ for all
% capital securities, will be paid by Citigroup Inc.; except that for
sales of 10,000 or more % capital securities to a single purchaser, the
commissions will be $ per capital security.
Citigroup expects that the % capital securities will be ready for delivery
in book-entry form only through The Depository Trust Company on or about
.
------------------------
, 1999
<PAGE>
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. CITIGROUP HAS NOT, AND THE UNDERWRITERS HAVE NOT,
AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE
PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON
IT. CITIGROUP IS NOT, AND THE UNDERWRITERS ARE NOT, MAKING AN OFFER TO SELL
THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS, AS WELL AS
INFORMATION CITIGROUP PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND INCORPORATED BY REFERENCE, IS ACCURATE AS OF THE DATE OF THE
APPLICABLE DOCUMENT. CITIGROUP'S BUSINESS, FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Summary Information-Q&A.................................................................................... 3
Risk Factors............................................................................................... 7
Citigroup Inc.............................................................................................. 10
Use of Proceeds............................................................................................ 10
Ratio of Income to Fixed Charges and Ratio of Income to Combined Fixed Charges Including Preferred Stock
Dividends................................................................................................ 11
Accounting Treatment....................................................................................... 11
Capitalization............................................................................................. 12
Description of the Capital Securities...................................................................... 13
Description of the Junior Subordinated Debt Securities..................................................... 26
Description of Guarantee................................................................................... 35
Effect of Obligations Under the Junior Subordinated Debt Securities and the Guarantee...................... 38
United States Federal Income Taxation...................................................................... 39
ERISA Considerations....................................................................................... 43
Underwriting............................................................................................... 45
Legal Matters.............................................................................................. 46
Experts.................................................................................................... 46
Incorporation of Certain Documents by Reference............................................................ 47
</TABLE>
2
<PAGE>
SUMMARY INFORMATION-Q&A
The following information supplements, and should be read together with, the
information contained in other parts of this prospectus. This summary highlights
selected information from this prospectus to help you understand the % capital
securities. You should carefully read this prospectus to understand fully the
terms of the capital securities as well as the tax and other considerations that
are important to you in making a decision about whether to invest in the capital
securities. You should pay special attention to the "Risk Factors" section
beginning on page 7 of this prospectus to determine whether an investment in the
capital securities is appropriate for you.
WHAT ARE THE CAPITAL SECURITIES?
Each capital security represents an undivided beneficial interest in the
assets of Citigroup Capital ("Citigroup Capital"). Each capital security will
entitle the holder to receive cash distributions as described in this
prospectus. Citigroup Capital is offering capital securities at a
price of $ for each capital security.
WHO IS CITIGROUP CAPITAL?
Citigroup Capital is a Delaware business trust. Its principal place of
business is c/o Citigroup Inc., 153 East 53rd Street, New York, NY 10043, and
its telephone number is (212) 559-1000.
Citigroup Capital will sell its capital securities to the public and its
common securities to Citigroup Inc. (formerly Travelers Group Inc.)
("Citigroup"). Citigroup Capital will use the proceeds from these sales to buy a
series of % junior subordinated deferrable interest debentures due ,
20 from Citigroup with the same financial terms as the capital securities.
Citigroup will guarantee payments made on the capital securities to the extent
described below.
There are four trustees of Citigroup Capital (the "Citigroup Capital
trustees"). Two of the trustees are employees or officers of Citigroup (the
"regular trustees"). The Chase Manhattan Bank will act as the institutional
trustee of Citigroup Capital and as guarantee trustee. Chase Manhattan Bank
Delaware will act as the Delaware trustee of Citigroup Capital.
WHO IS CITIGROUP INC.?
Citigroup's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, Citigroup changed its name from Travelers Group Inc. to
Citigroup Inc. in connection with the merger of Citicorp into a newly formed,
wholly owned subsidiary of Citigroup. The mailing address of Citigroup's
principal executive office is 153 East 53rd Street, New York, NY 10043, and its
telephone number is (212) 559-1000.
WHEN WILL YOU RECEIVE DISTRIBUTIONS ON THE CAPITAL SECURITIES?
If you purchase the capital securities, you are entitled to receive
cumulative cash distributions at an annual rate of % of the liquidation amount
of $ per capital security. Distributions will accumulate from the date
Citigroup Capital issues the capital securities and will be paid in
arrears on of each year, beginning .
3
<PAGE>
WHEN CAN PAYMENT OF YOUR DISTRIBUTIONS BE DEFERRED?
So long as no event of default under the junior subordinated debt securities
has occurred and is continuing, Citigroup can, on one or more occasions, defer
interest payments on the junior subordinated debt securities for up to
consecutive periods. A deferral of interest payments cannot extend,
however, beyond the maturity date of the junior subordinated debt securities,
which is , 20 .
If Citigroup defers interest payments on the junior subordinated debt
securities, Citigroup Capital will also defer distributions on the capital
securities. During this deferral period, distributions will continue to accrue
on the capital securities at an annual rate of % of the liquidation amount of
$ per capital security. Also, the deferred distributions will themselves accrue
interest at an annual rate of %, to the extent permitted by law. Once
Citigroup makes all interest payments on the junior subordinated debt
securities, with accrued interest, it can again postpone interest payments on
the junior subordinated debt securities if no event of default under the junior
subordinated debt securities has occurred and is continuing.
During any period in which Citigroup defers interest payments on the junior
subordinated debt securities, Citigroup will not be permitted to, except as
described on page 29:
- pay a dividend or make any distributions on its capital stock or redeem,
purchase, acquire or make a liquidation payment on any of its capital
stock, or make any guarantee payments with respect to the foregoing; or
- make an interest, principal or premium payment on, or repurchase or
redeem, any of its debt securities that rank equal with or junior to the
junior subordinated debt securities.
If Citigroup defers payments of interest on the junior subordinated debt
securities, the capital securities will be treated as being issued with original
issue discount for United States federal income tax purposes. This means you
will be required to recognize interest income with respect to distributions and
include such amounts in your gross income for United States federal income tax
purposes even though you will not have received any cash distributions relating
to such interest income. See "United States Federal Income Taxation--Interest
Income and Original Issue Discount" on page 40.
WHEN CAN CITIGROUP CAPITAL REDEEM THE CAPITAL SECURITIES?
Citigroup Capital must redeem all of the outstanding capital securities and
common securities when the junior subordinated debt securities are paid at
maturity on , 20 . Together, the capital securities and the common
securities are referred to as the "trust securities." In addition, if Citigroup
redeems any junior subordinated debt securities before their maturity, Citigroup
Capital will use the cash it receives from the redemption to redeem, on a
ratable basis, capital securities and common securities having a combined
liquidation amount equal to the principal amount of the junior subordinated debt
securities redeemed.
Citigroup can redeem some or all of the junior subordinated debt securities
before their maturity at 100% of their principal amount on one or more occasions
any time on or after , 20 . Citigroup also has the option to redeem, in
whole or in part, the junior subordinated debt securities at any time if certain
changes in tax, investment company or bank regulatory law occur and certain
other conditions are satisfied. In any case, Citigroup will pay accrued interest
to the date of redemption. Prior to any such redemption, Citigroup will obtain
any required regulatory approvals. See "Description of the Capital
Securities--Special Event Redemption" on page 16.
4
<PAGE>
WHAT IS CITIGROUP'S GUARANTEE OF THE CAPITAL SECURITIES?
Citigroup's guarantee of the capital securities consists of:
- its obligations to make payments on the junior subordinated debt
securities;
- its obligations under the capital securities guarantee; and
- its obligations under the Amended and Restated Declaration of Trust of
Citigroup Capital, which sets forth the terms of Citigroup Capital.
Citigroup has irrevocably guaranteed that if a payment on the junior
subordinated debt securities is made to Citigroup Capital but, for any reason,
Citigroup Capital does not make the corresponding distribution or redemption
payment to the holders of the capital securities, then Citigroup will make the
payments directly to the holders of the capital securities. The guarantee does
not cover payments when Citigroup Capital does not have sufficient funds to make
payments on the capital securities. To avoid a double payment to a holder of the
capital securities, if Citigroup makes a payment under the guarantee, the
holder's right to receive the corresponding payment from Citigroup Capital will
automatically be surrendered to Citigroup.
Citigroup's obligations under the guarantee are:
- subordinate and junior in right of payment to its other liabilities;
- equal in rank to its most senior current or future preferred stock and to
any current or future guarantee of preferred or preference stock of any of
its subsidiaries; and
- senior to its common stock.
WHEN COULD THE JUNIOR SUBORDINATED DEBT SECURITIES BE DISTRIBUTED TO YOU?
Citigroup has the right to dissolve Citigroup Capital at any time. Prior to
any such dissolution, Citigroup will obtain any required regulatory approvals.
If Citigroup terminates Citigroup Capital, Citigroup Capital will redeem the
capital securities by distributing the junior subordinated debt securities to
holders of the capital securities and the common securities on a ratable basis.
If the junior subordinated debt securities are distributed, Citigroup will use
it best efforts to list the junior subordinated debt securities on the New York
Stock Exchange, Inc. (the "NYSE"), or any other exchange on which the capital
securities are then listed.
WILL THE CAPITAL SECURITIES BE LISTED ON A STOCK EXCHANGE?
Application will be made to list the capital securities on the NYSE. If
approved for listing, Citigroup Capital expects the capital securities will
begin trading on the NYSE within 30 days after they are first issued.
WILL HOLDERS OF THE CAPITAL SECURITIES HAVE ANY VOTING RIGHTS?
Generally, the holders of the capital securities will not have any voting
rights. See "Description of the Capital Securities--Voting Rights."
IN WHAT FORM WILL THE CAPITAL SECURITIES BE ISSUED?
The capital securities will be represented by one or more global securities
that will be deposited with and registered in the name of The Depository Trust
Company ("DTC") or its nominee. This means that you will not receive a
certificate for your capital securities and that your broker will maintain your
position in the capital securities. Citigroup Capital expects that the capital
securities will be ready for delivery through DTC on or about .
5
<PAGE>
WHERE CAN YOU FIND MORE INFORMATION?
As required by the Securities Act of 1933, Citigroup and the subsidiary
trusts filed a registration statement (No. 333-68949) relating to the securities
offered by this prospectus with the Securities and Exchange Commission. This
prospectus is a part of that registration statement, which includes additional
information. Citigroup has filed the exhibits discussed above with the
registration statement, and you should read the exhibits carefully for
provisions that may be important to you.
Citigroup files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document Citigroup
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. 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 public
reference rooms. These SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov.
The SEC allows Citigroup to "incorporate by reference" the information it
files with the SEC, which means that it can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus. Information that
Citigroup files with the SEC will automatically update the information in this
prospectus. In all cases, you should rely on the later information over
different information included in this prospectus. Citigroup incorporates by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934:
(a) Annual Report on Form 10-K for the year ended December 31, 1997, as
amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998; and
(c) Current Reports on Form 8-K filed on January 6, 1998, January 26, 1998,
February 17, 1998, April 6, 1998, April 8, 1998, April 20, 1998, June 1,
1998, July 20, 1998, August 18, 1998, August 31, 1998, October 8, 1998,
October 21, 1998, October 26, 1998, October 29, 1998, November 1, 1998,
November 13, 1998 and December 15, 1998.
All documents Citigroup files pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the later of
(1) the completion of the offering of the securities described in this
prospectus and (2) the date the broker-dealer subsidiaries of Citigroup stop
offering securities pursuant to this prospectus shall be incorporated by
reference in this prospectus from the date of filing of such documents.
You may request a copy of these filings, at no cost, by writing or
telephoning Citigroup at the following address:
Treasurer
Citigroup Inc.
153 East 53(rd) Street
New York, NY 10043
212-559-1000
You should rely only on the information provided in this prospectus, as well
as the information incorporated by reference. Citigroup has not authorized
anyone to provide you with different information. Citigroup is not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus, or any documents
incorporated by reference, is accurate as of any date other than the date on the
front of the applicable document.
6
<PAGE>
RISK FACTORS
Your investment in the capital securities will involve several risks. You
should carefully consider the following discussion of risks, and the other
information in this prospectus, before deciding whether an investment in the
capital securities is suitable for you.
CITIGROUP'S OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED DEBT
SECURITIES ARE SUBORDINATED.
Citigroup's obligations under the junior subordinated debt securities will
rank junior in priority of payment to all of Citigroup's senior indebtedness.
This means that Citigroup cannot make any payments on the junior subordinated
debt securities if it defaults on a payment of senior indebtedness and does not
cure such default within the applicable grace period or if the senior
indebtedness becomes immediately due because of a default and has not yet been
paid in full. In addition, Citigroup's obligations under the junior subordinated
debt securities will be effectively subordinated to all existing and future
liabilities of Citigroup's subsidiaries.
Citigroup's obligations under the guarantee will rank in priority of payment
as follows:
- subordinate and junior in right of payment to its other liabilities;
- equal in rank to its most senior current or future preferred stock and to
any current or future guarantee of preferred or preference stock of any of
its subsidiaries; and
- senior to its common stock.
This means that Citigroup cannot make any payments on the guarantee if it
defaults on a payment on any of its other liabilities. In addition, in the event
of the bankruptcy, liquidation or dissolution of Citigroup, its assets would be
available to pay obligations under the guarantee only after Citigroup made all
payments on its other liabilities.
Neither the capital securities, the junior subordinated debt securities nor
the guarantee limit the ability of Citigroup and its subsidiaries to incur
additional indebtedness, including indebtedness that ranks senior in priority of
payment to the junior subordinated debt securities and the guarantee. See
"Description of Guarantee--Status of the Guarantee" and "Description of the
Junior Subordinated Debt Securities--Subordination" on pages 37 and 27,
respectively.
THE GUARANTEE ONLY COVERS PAYMENTS IF CITIGROUP CAPITAL HAS CASH AVAILABLE.
The ability of Citigroup Capital to pay scheduled distributions on the
capital securities, the redemption price of the capital securities and the
liquidation amount of each capital security is solely dependent upon Citigroup
making the related payments on the junior subordinated debt securities when due.
If Citigroup defaults on its obligations to pay principal or interest on the
junior subordinated debt securities, Citigroup Capital will not have sufficient
funds to pay distributions, the redemption price or the liquidation amount of
each capital security. In those circumstances, you will not be able to rely upon
the guarantee for payment of these amounts.
Instead, you:
- may directly sue Citigroup or seek other remedies to collect your ratable
share of payments owed; or
- may rely on the institutional trustee to enforce Citigroup Capital's
rights under the junior subordinated debt securities.
7
<PAGE>
DEFERRAL OF DISTRIBUTIONS WOULD HAVE TAX CONSEQUENCES FOR YOU AND MAY AFFECT THE
TRADING PRICE OF THE CAPITAL SECURITIES.
So long as no event of default under the junior subordinated debt securities
has occurred and is continuing, Citigroup can, on one or more occasions, defer
interest payments on the junior subordinated debt securities for up to
consecutive periods. If Citigroup defers interest payments on the
junior subordinated debt securities, Citigroup Capital will defer distributions
on the capital securities during any deferral period. However, distributions
would still accumulate and such deferred distributions would themselves accrue
interest at the annual rate of % per annum, to the extent permitted by law.
If Citigroup defers payments of interest on the junior subordinated debt
securities, you will be required to recognize interest income for United States
federal income tax purposes in respect of your ratable share of the interest on
the junior subordinated debt securities held by Citigroup Capital before you
receive any cash distributions relating to such interest. In addition, you will
not receive such cash if you sold the capital securities before the end of any
deferral period or before the record date relating to distributions which are
paid.
Citigroup has no current intention of deferring interest payments on the
junior subordinated debt securities and believes that such deferral is a remote
possibility. However, if Citigroup exercises its right in the future, the
capital securities may trade at a price that does not fully reflect the value of
accrued but unpaid interest on the junior subordinated debt securities. If you
sell the capital securities during an interest deferral period, you may not
receive the same return on investment as someone else who continues to hold the
capital securities. In addition, the existence of Citigroup's right to defer
payments of interest on the junior subordinated debt securities may mean that
the market price for the capital securities, which represent an undivided
beneficial interest in the junior subordinated debt securities, may be more
volatile than other securities that do not have these rights.
See "United States Federal Income Taxation" on page 39 for more information
regarding the tax consequences of purchasing, holding and selling the capital
securities.
CAPITAL SECURITIES MAY BE REDEEMED AT ANY TIME IF CERTAIN CHANGES IN TAX,
INVESTMENT COMPANY OR BANK REGULATORY LAW OCCUR.
If certain changes, which are more fully described below, in tax, investment
company or bank regulatory law occur and are continuing, and certain other
conditions which are more fully described below are satisfied, Citigroup has the
right to redeem, in whole or in part, the junior subordinated debt securities.
If such a redemption occurs, Citigroup Capital will use the cash it receives
upon the redemption of the junior subordinated debt securities to redeem an
equivalent amount of capital securities and common securities on a pro rata
basis within 90 days of the event at a redemption price equal to $ per
security plus any accrued and unpaid distributions. Prior to any redemption of
the junior subordinated debt securities, Citigroup will obtain any required
regulatory approvals. See "Description of the Capital Securities--Distribution
of the Junior Subordinated Debt Securities" and "--Special Event Redemption" on
pages 17 and 16, respectively.
CAPITAL SECURITIES MAY BE REDEEMED AT THE OPTION OF THE COMPANY.
At Citigroup's option, the junior subordinated debt securities may be
redeemed, in whole, at any time, or in part, from time to time, on or after
, at a redemption price equal to the principal amount to be redeemed
plus any accrued and unpaid interest to the redemption date. Prior to any such
redemption, Citigroup will obtain any required regulatory approvals. You should
assume that Citigroup will exercise its redemption option if Citigroup is able
to refinance at a lower interest rate or it is otherwise in the interest of
Citigroup to redeem the junior subordinated debt securities. If the junior
subordinated debt securities are redeemed, Citigroup Capital must redeem the
capital securities
8
<PAGE>
and the common securities having an aggregate liquidation amount equal to the
aggregate principal amount of junior subordinated debt securities to be
redeemed. See "Description of the Capital Securities--Mandatory Redemption of
Trust Securities" and "Description of the Junior Subordinated Debt
Securities--Optional Redemption" on pages 15 and 28, respectively.
THERE CAN BE NO ASSURANCE AS TO THE MARKET PRICES FOR THE CAPITAL SECURITIES OR
THE JUNIOR SUBORDINATED DEBT SECURITIES.
There can be no assurance as to the market prices for the capital securities
or the junior subordinated debt securities that may be distributed in exchange
for capital securities upon a termination of Citigroup Capital. Accordingly, the
capital securities that an investor may purchase, whether pursuant to the offer
made by this prospectus or in the secondary market, or the junior subordinated
debt securities that a holder of capital securities may receive upon a
termination of Citigroup Capital, may trade at a discount to the price that the
investor paid to purchase the capital securities offered by this prospectus. As
a result of Citigroup's right to defer interest payments on the junior
subordinated debt securities, the market price of the capital securities, which
represent undivided beneficial ownership interests in Citigroup Capital, the
assets of which consist solely of the junior subordinated debt securities, may
be more volatile than the market prices of other securities that are not subject
to such optional deferrals.
CITIGROUP MAY TERMINATE CITIGROUP CAPITAL AT ANY TIME.
Subject to obtaining any required regulatory approval, Citigroup has the
right to terminate Citigroup Capital at any time. If Citigroup decides to
exercise its right to terminate Citigroup Capital, Citigroup Capital will redeem
the capital securities and common securities by distributing the junior
subordinated debt securities to holders of the capital securities and common
securities on a ratable basis.
Under current United States federal income tax law, a distribution of junior
subordinated debt securities to you on the dissolution of Citigroup Capital
should not be a taxable event to you. However, if Citigroup Capital is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time it is dissolved or if there is a change in
law, the distribution of junior subordinated debt securities to you may be a
taxable event to you.
Citigroup has no current intention of causing the termination of Citigroup
Capital and the distribution of the junior subordinated debt securities.
Citigroup anticipates that it would consider exercising this right in the event
that expenses associated with maintaining Citigroup Capital were substantially
greater than currently expected, such as if certain changes in tax law,
investment company law or banking regulatory law, each of which is more fully
described below, occurred. Citigroup cannot predict the other circumstances
under which this right would be exercised.
Although Citigroup will use its best efforts to list the junior subordinated
debt securities on the NYSE, or any other exchange on which the capital
securities are then listed, if they are distributed, Citigroup cannot assure you
that the junior subordinated debt securities will be approved for listing or
that a trading market will exist for those securities.
YOU HAVE LIMITED VOTING RIGHTS.
You will have limited voting rights. In particular, subject to the limited
exceptions described below, only Citigroup can elect or remove any of Citigroup
Capital trustees. See "Description of the Capital Securities--Voting Rights" on
page 19.
9
<PAGE>
CITIGROUP INC.
Citigroup's businesses provide a broad range of financial services to
consumer and corporate customers around the world. Among these businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney,
SSB Citi Asset Management, Travelers Life & Annuity and Travelers Property
Casualty.
On October 8, 1998, Citigroup changed its name from Travelers Group Inc. to
Citigroup Inc. in connection with the merger of Citicorp into a newly formed,
wholly owned subsidiary of Citigroup.
Citigroup is a holding company and services its obligations primarily with
dividends and advances that it receives from subsidiaries. Citigroup's
subsidiaries that operate in the banking, insurance and securities business can
only pay dividends if they are in compliance with the applicable regulatory
requirements imposed on them by federal bank regulatory authorities, state
insurance departments, and securities regulators. Certain of Citigroup's
subsidiaries have credit agreements that also may restrict their ability to pay
dividends. Citigroup currently believes that none of these regulatory or
contractual restrictions on the ability of its subsidiaries to pay dividends
will affect Citigroup's ability to service its own debt. Citigroup must also
maintain the required capital levels of a bank holding company before it may pay
dividends on its stock. Each of Citigroup's major operating subsidiaries
finances its operations on a stand-alone basis consistent with its
capitalization and ratings.
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, Citigroup may be required to commit resources to its
subsidiary banks in certain circumstances.
Citigroup's principal office is located at 153 East 53rd Street, New York,
NY 10043, and its telephone number is (212) 559-1000.
USE OF PROCEEDS
All of the net proceeds from the sale of the capital securities will be
invested by Citigroup Capital in junior subordinated debt securities of
Citigroup. Citigroup will use the proceeds from the sale of the junior
subordinated debt securities to Citigroup Capital for general corporate
purposes, principally to:
- fund the business of its operating units;
- fund investments in, or extensions of credit or capital contributions to,
its subsidiaries; and
- lengthen the average maturity of liabilities, which means that it could
reduce its short-term liabilities or refund maturing indebtedness.
In order to fund its businesses, Citigroup expects to incur additional
indebtedness in the future. See "Capitalization."
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<PAGE>
RATIO OF INCOME TO FIXED CHARGES AND RATIO
OF INCOME TO COMBINED FIXED CHARGES INCLUDING PREFERRED STOCK DIVIDENDS
The following table shows (1) the supplemental consolidated ratio of income
to fixed charges and (2) the supplemental consolidated ratio of income to
combined fixed charges including preferred stock dividends of Citigroup for the
nine months ended September 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>
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED -----------------------------------------------------
SEPTEMBER 30, 1998 1997 1996 1995 1994 1993
--------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of income to fixed charges (excluding interest
on deposits)...................................... 1.65 1.71 1.88 1.65 1.41 1.43
Ratio of income to fixed charges (including interest
on deposits)...................................... 1.39 1.43 1.51 1.39 1.25 1.25
Ratio of income to combined fixed charges including
preferred stock dividends (excluding interest on
deposits)......................................... 1.62 1.66 1.80 1.56 1.34 1.37
Ratio of income to combined fixed charges including
preferred stock dividends (including interest on
deposits)......................................... 1.37 1.41 1.48 1.35 1.21 1.22
</TABLE>
ACCOUNTING TREATMENT
The financial statements of Citigroup Capital will be reflected in
Citigroup's consolidated financial statements with the capital securities
reflected in "Company or subsidiary obligated mandatorily redeemable preferred
securities of subsidiary trusts holding solely junior subordinated debt
securities of--Company."
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<PAGE>
CAPITALIZATION
The following table sets forth the supplemental consolidated capitalization
of Citigroup at September 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 the issuance of the
capital securities.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1998
------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
<S> <C> <C>
(DOLLARS IN MILLIONS)
Debt:
Investment banking and brokerage borrowings.......................................... $ 16,128 $
Short-term borrowings................................................................ 19,492
Long-term debt....................................................................... 49,419
----------- -----------
Total debt......................................................................... 85,039
----------- -----------
Redeemable Preferred Stock--Series I................................................... 280
----------- -----------
Company or subsidiary obligated mandatorily redeemable preferred securities of
subsidiary trusts holding solely junior subordinated debt securities of--
Company.............................................................................. 1,200
Subsidiaries......................................................................... 2,620
Stockholders' equity:
Capital stock at aggregate liquidation value......................................... 2,313
Common stock and additional paid-in capital (net of treasury stock).................. 5,031
Retained earnings.................................................................... 35,746
Accumulated other changes in equity from nonowner sources............................ 593
Unearned compensation................................................................ (593)
----------- -----------
Total stockholders' equity......................................................... 43,090
----------- -----------
Total capitalization................................................................... $ 132,229 $
----------- -----------
----------- -----------
</TABLE>
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<PAGE>
DESCRIPTION OF THE CAPITAL SECURITIES
The capital securities will be issued pursuant to the terms of the Amended
and Restated Declaration of Trust of Citigroup Capital (the "declaration"). The
declaration will be qualified as an indenture under the Trust Indenture Act of
1939, as amended. The institutional trustee, The Chase Manhattan Bank, will act
as indenture trustee under the declaration for purposes of compliance with the
provisions of the Trust Indenture Act. The terms of the capital securities will
include those stated in the declaration and those made part of the declaration
by the Trust Indenture Act. The following summary of the material terms and
provisions of the capital securities does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the declaration, the
Business Trust Act of the State of Delaware and the Trust Indenture Act. A copy
of the declaration is filed as an exhibit to the registration statement of which
this prospectus is a part.
GENERAL
The declaration authorizes the regular trustees to issue on behalf of
Citigroup Capital the trust securities, which represent undivided beneficial
interests in the assets of Citigroup Capital. All of the common securities will
be owned, directly or indirectly, by Citigroup. The common securities rank
equally, and payments will be made on the common securities on a ratable basis,
with the capital securities. If an event of default under the declaration occurs
and continues, however, the rights of the holders of the common securities to
receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the capital securities. The declaration does not permit the issuance by
Citigroup Capital of any securities other than the trust securities or the
incurrence of any indebtedness by Citigroup Capital. Pursuant to the
declaration, the institutional trustee will hold title to the junior
subordinated debt securities purchased by Citigroup Capital for the benefit of
the holders of the trust securities. The payment of distributions out of money
held by Citigroup Capital, and payments upon redemption of the capital
securities or liquidation of Citigroup Capital out of money held by Citigroup
Capital, are guaranteed by Citigroup to the extent described under "Description
of Guarantee." The guarantee will be held by The Chase Manhattan Bank, the
guarantee trustee, for the benefit of the holders of the capital securities. The
guarantee does not cover payment of distributions when Citigroup Capital does
not have sufficient available funds to pay such distributions. In such event,
the remedy of a holder of capital securities is to:
- vote to direct the institutional trustee to enforce the institutional
trustee's rights under the junior subordinated debt securities; or
- if the failure of Citigroup Capital to pay distributions is attributable
to the failure of Citigroup to pay interest or principal on the junior
subordinated debt securities, institute a proceeding directly against
Citigroup for enforcement of payment to such holder of the principal or
interest on the junior subordinated debt securities having a principal
amount equal to the aggregate liquidation amount of the capital securities
of such holder on or after the respective due date specified in the junior
subordinated debt securities.
DISTRIBUTIONS
Distributions on the capital securities will be fixed at a rate per annum of
% of the stated liquidation amount of $ per capital security. Distributions
not paid when due, or would be due, if not for any extension period or default
by Citigroup on the junior subordinated debt securities, will themselves
accumulate additional interest at the annual rate of % thereof compounded
. When this prospectus refers to any payment of distributions,
distributions include any such interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
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<PAGE>
Distributions on the capital securities will be cumulative, will accrue from
and including , and will be payable in arrears on
of each year, commencing . When, as and if available for payment,
distributions will be made by the institutional trustee, except as otherwise
described below.
The distribution rate and the distribution payment dates and other payment
dates for the capital securities will correspond to the interest rate and
interest payment dates and other payment dates on the junior subordinated debt
securities.
DEFERRAL OF DISTRIBUTIONS. Citigroup has the right under the indenture to
defer interest payments on the junior subordinated debt securities for an
extension period not exceeding consecutive interest periods during which
no interest shall be due and payable. A deferral of interest payments cannot
extend, however, beyond the maturity of the junior subordinated debt securities.
As a consequence of Citigroup's extension of the interest payment period,
distributions on the capital securities would be deferred during any such
extended interest payment period. During an extension period, the amount of
distributions due to you would continue to accumulate and such deferred
distributions will themselves accrue interest. In the event that Citigroup
exercises its right to extend the interest payment period, then:
(1) Citigroup shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make
any guarantee payment with respect thereto other than
- repurchases, redemptions or other acquisitions of shares of capital
stock of Citigroup in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of employees,
officers, directors or consultants,
- as a result of an exchange or conversion of any class or series of
Citigroup's capital stock for any other class or series of Citigroup's
capital stock, or
- the purchase of fractional interests in shares of Citigroup's capital
stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and
(2) Citigroup may not make any payment of interest on or principal of, or
premium, if any, on, or repay, repurchase or redeem, any debt securities
issued by Citigroup which rank equally with or junior to the junior
subordinated debt securities.
The foregoing, however, will not apply to any stock dividends paid by Citigroup
where the dividend stock is the same stock as that on which the dividend is
being paid. Prior to the termination of any extension period, Citigroup may
further extend such extension period, so long as such extension period, together
with all such previous and further extensions of such period, may not exceed
consecutive interest periods. An extension period cannot extend,
however, beyond the maturity of the junior subordinated debt securities. Upon
the termination of any extension period and the payment of all amounts then due,
Citigroup may commence a new extension period, subject to the above
requirements. Consequently, there could be up to extension periods of varying
lengths throughout the term of the junior subordinated debt securities. The
regular trustees shall give the holders of the capital securities notice of any
extension period upon their receipt of notice thereof from Citigroup. If
distributions are deferred, the deferred distributions and accrued interest on
such distributions shall be paid to holders of record of the capital securities
as they appear on the books and records of Citigroup Capital on the record date
next following the termination of such deferral period. See "Description of the
Junior Subordinated Debt Securities--Interest" and "--Option to Extend Interest
Payment Period."
14
<PAGE>
PAYMENT OF DISTRIBUTIONS. Distributions on the capital securities will be
payable to the extent that Citigroup Capital has funds available for the payment
of such distributions in its property account. Citigroup Capital's funds
available for distribution to the holders of the capital securities will be
limited to payments received from Citigroup on the junior subordinated debt
securities. The payment of distributions out of monies held by Citigroup Capital
is guaranteed by Citigroup to the extent set forth under "Description of
Guarantee." See "Description of the Junior Subordinated Debt Securities."
Distributions on the capital securities will be payable to the holders named
on the securities register of Citigroup Capital at the close of business on the
relevant record dates. As long as the capital securities remain in book-entry
only form, the record date will be one business day before the distribution
dates. Such distributions will be paid through the institutional trustee who
will hold amounts received in respect of the junior subordinated debt securities
in the Property Account for the benefit of the holders of the trust securities.
Subject to any applicable laws and regulations and the provisions of the
declaration, each such payment will be made as described under "--Book-Entry
Only Issuance--The Depository Trust Company" below. In the event that the
capital securities do not continue to remain in book-entry only form, the
relevant record dates shall conform to the rules of any securities exchange on
which the capital securities are listed and, if none, the regular trustees shall
have the right to select relevant record dates, which shall be more than 14 days
but less than 60 days prior to the relevant payment dates. In the event that any
date on which distributions are to be made on the capital securities is not a
business day, then payment of the distributions payable on such date will be
made on the next succeeding day which is a business day, and without any
interest or other payment in respect of any such delay. However, if such
business day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding business day, in each case with the same force and
effect as if made on such record date. A "business day" shall mean any day other
than Saturday, Sunday or any other day on which banking institutions in New York
City are permitted or required by any applicable law to close.
MANDATORY REDEMPTION OF TRUST SECURITIES
The capital securities have no stated maturity date but will be redeemed
upon the maturity of the junior subordinated debt securities or to the extent
the junior subordinated debt securities are redeemed. The junior subordinated
debt securities will mature on , 20 , and may be redeemed, in whole or in
part, at any time on or after . The junior subordinated debt
securities can also be redeemed at any time, in whole or in part, in certain
circumstances upon the occurrence of a Tax Event, an Investment Company Event or
a Regulatory Capital Event. Upon the maturity of the junior subordinated debt
securities, the proceeds of the repayment thereof shall simultaneously be
applied to redeem all outstanding trust securities at the redemption price. Upon
the redemption of the junior subordinated debt securities, whether in whole or
in part, either at the option of Citigroup or pursuant to a Tax Event, an
Investment Company Event or a Regulatory Capital Event, Citigroup Capital will
use the cash it receives upon the redemption to redeem trust securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
junior subordinated debt securities so redeemed at the redemption price. Before
such redemption, holders of trust securities shall be given not less than 30 nor
more than 60 days' notice. In the event that fewer than all of the outstanding
capital securities are to be redeemed, the capital securities will be redeemed
on a ratable basis as described under "--Book-Entry Only Issuance--The
Depository Trust Company" below. See "--Special Event Redemption" and
"Description of the Junior Subordinated Debt Securities--Optional Redemption."
15
<PAGE>
SPECIAL EVENT REDEMPTION
"Tax Event" means that the regular trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
to the effect that, as a result of any:
- amendment to, or change, including any announced prospective change, in,
the laws or associated regulations of the United States or any political
subdivision or taxing authority of the United States; or
- amendment to, or change in, an interpretation or application of such laws
or regulations by any legislative body, court, governmental agency or
regulatory authority, including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or
after the date of this prospectus,
in either case where such change or amendment becomes effective on or after the
date of this prospectus, there is more than an insubstantial risk that:
- Citigroup Capital would be subject to United States federal income tax
with respect to income accrued or received on the junior subordinated debt
securities;
- interest payable to Citigroup Capital on the junior subordinated debt
securities would not be deductible by Citigroup for United States federal
income tax purposes; or
- Citigroup Capital would be subject to more than a minimal amount of other
taxes, duties or other governmental charges.
"Investment Company Event" means that the regular trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practicing under the 1940 Act to the effect that, as a result of the
occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that Citigroup Capital is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), which change becomes effective
on or after the date of this prospectus.
"Regulatory Capital Event" means a determination by Citigroup, based on an
opinion of counsel experienced in such matters (who may be an employee of
Citigroup or any of its affiliates), that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto or (b) any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment, clarification, change, pronouncement or decision is announced or is
effective after the date of this prospectus, there is more than an insubstantial
risk that the capital securities will no longer constitute Tier I Capital of
Citigroup or any bank holding company of which Citigroup is a subsidiary (or its
equivalent) for purposes of the capital adequacy guidelines or policies of the
Board of Governors of the Federal Reserve System or its successor as Citigroup's
primary federal banking regulator.
This prospectus refers to a Tax Event, an Investment Company Event or a
Regulatory Capital Company Event as a "Special Event." Subject to obtaining any
required regulatory approval, if a Special Event occurs and continues, Citigroup
may, upon not less than 30 nor more than 60 days' notice, redeem the junior
subordinated debt securities, in whole or in part, for cash within 90 days
following the occurrence of such Special Event. Following such redemption, trust
securities with an aggregate liquidation amount equal to the aggregate principal
amount of the junior subordinated debt securities so redeemed shall be redeemed
by Citigroup Capital at the redemption price on a ratable basis. If, however, at
the time there is available to Citigroup or Citigroup Capital the opportunity to
eliminate, within such 90-day period, the Special Event by taking some
ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that will have no
16
<PAGE>
adverse effect on Citigroup Capital, Citigroup or the holders of the trust
securities, then Citigroup or Citigroup Capital will pursue such measure instead
of redemption.
DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Citigroup will have the right at any time to dissolve Citigroup Capital.
After satisfaction of the liabilities of creditors of Citigroup Capital as
provided by applicable law, Citigroup Capital may cause junior subordinated debt
securities to be distributed to the holders of the capital securities in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of the capital securities then outstanding. Prior to any such
dissolution, Citigroup will obtain any required regulatory approvals.
If the junior subordinated debt securities are distributed to the holders of
the capital securities, Citigroup will use its best efforts to cause the junior
subordinated debt securities to be listed on the NYSE or on such other exchange
as the capital securities are then listed.
After the date for any distribution of junior subordinated debt securities
upon dissolution of Citigroup Capital:
- the capital securities will no longer be deemed to be outstanding;
- the securities depositary or its nominee, as the record holder of the
capital securities, will receive a registered global certificate or
certificates representing the junior subordinated debt securities to be
delivered upon such distribution; and
- any certificates representing capital securities not held by the
depositary or its nominee will be deemed to represent junior subordinated
debt securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to
the distribution rate of, and with accrued and unpaid interest equal to
accrued and unpaid distributions on, such capital securities until such
certificates are presented to Citigroup or its agent for transfer or
reissuance.
There can be no assurance as to the market prices for either the capital
securities or the junior subordinated debt securities that may be distributed in
exchange for the capital securities if a dissolution and liquidation of
Citigroup Capital were to occur. This means that the capital securities that an
investor may purchase, whether pursuant to the offer made by this prospectus or
in the secondary market, or the junior subordinated debt securities that an
investor may receive if a dissolution and liquidation of Citigroup Capital were
to occur, may trade at a discount to the price that the investor paid to
purchase the capital securities offered by this prospectus.
REDEMPTION PROCEDURES
Citigroup Capital may not redeem fewer than all of the outstanding capital
securities unless all accrued and unpaid distributions have been paid on all
capital securities for all distribution periods terminating on or prior to
the date of redemption.
If Citigroup Capital gives a notice of redemption regarding of the capital
securities, which notice will be irrevocable, then, by 12:00 noon, New York City
time, on the redemption date, and if Citigroup has paid to the institutional
trustee a sufficient amount of cash in connection with the related redemption or
maturity of the junior subordinated debt securities, the institutional trustee
will irrevocably deposit with the depositary funds sufficient to pay the
applicable redemption price. Citigroup Capital will also give the depositary
irrevocable instructions and authority to pay the redemption price to the
holders of the capital securities. Once notice of redemption is given and funds
are irrevocably deposited, distributions will cease to accrue and all rights of
holders of capital securities called for redemption will cease, except the right
of the holders to receive the redemption price but without interest on
17
<PAGE>
such redemption price. If any redemption date is not a business day, then
payment of the redemption price payable on such date will be made on the next
succeeding day that is a business day, without any interest or other payment in
respect of any such delay. However, if such business day falls in the next
calendar year, such payment will be made on the immediately preceding business
day. If payment of the redemption price for any capital securities is improperly
withheld or refused and not paid either by Citigroup Capital, or by Citigroup
pursuant to the guarantee, distributions on such capital securities will
continue to accrue at the then applicable rate from the original redemption date
to the date of payment. In this case, the actual payment date will be the
redemption date for purposes of calculating the redemption price. See
"--Book-Entry Only Issuance--the Depository Trust Company."
In the event that fewer than all of the outstanding capital securities are
to be redeemed, the capital securities will be redeemed in accordance with the
depositary's standard procedures. See "--Book-Entry Only Issuance--The
Depository Trust Company."
Subject to the foregoing and applicable law, including, without limitation,
United States federal securities laws, Citigroup or its subsidiaries may, at any
time, and from time to time, purchase outstanding capital securities by tender,
in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
This prospectus refers to any voluntary or involuntary liquidation,
dissolution, winding-up or termination of Citigroup Capital as a "liquidation."
If a liquidation occurs, the holders of the capital securities will be entitled
to receive out of the assets of Citigroup Capital, after satisfaction of
liabilities to creditors, distributions in an amount equal to the aggregate of
the stated liquidation amount of $ per capital security plus accrued and unpaid
distributions thereon to the date of payment, unless, in connection with such
liquidation, Citigroup distributes on a ratable basis to the holders of the
capital securities junior subordinated debt securities in an aggregate stated
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and with accrued and unpaid
interest equal to accrued and unpaid distributions on, the capital securities
outstanding at such time. See "--Distribution of the Junior Subordinated Debt
Securities."
If, this distribution can be paid only in part because Citigroup Capital has
insufficient assets available to pay in full the aggregate distribution, then
the amounts payable directly by Citigroup Capital on the capital securities
shall be paid on a ratable basis. The holders of the common securities will be
entitled to receive distributions upon any such liquidation on a ratable basis
with the holders of the capital securities. However, if a declaration event of
default has occurred and is continuing, the capital securities shall have a
preference over the common securities with regard to such distributions.
Pursuant to the declaration, Citigroup Capital shall terminate:
(1) on , 20 , the expiration of the term of Citigroup
Capital;
(2) upon the bankruptcy of Citigroup or the holder of the common
securities;
(3) upon the filing of a certificate of dissolution or its equivalent
with respect to the holder of the common securities or Citigroup,
the filing of a certificate of cancellation with respect to
Citigroup Capital, or the revocation of the charter of the holder of
the common securities or Citigroup and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(4) upon the distribution of junior subordinated debt securities to
holders of capital securities;
(5) upon the entry of a decree of a judicial dissolution of the holder
of the common securities, Citigroup or Citigroup Capital; or
(6) upon the redemption of all the trust securities.
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DECLARATION EVENTS OF DEFAULT
An "indenture event of default" is an event of default under the indenture
and also constitutes a "declaration event of default," which is an event of
default under the declaration with respect to the trust securities; provided,
that pursuant to the declaration, the holder of the common securities will be
deemed to have waived any declaration event of default with respect to the
common securities until all declaration events of default with respect to the
capital securities have been cured, waived or otherwise eliminated. Until such
declaration events of default with respect to the capital securities have been
so cured, waived, or otherwise eliminated, the institutional trustee will be
deemed to be acting solely on behalf of the holders of the capital securities.
Only the holders of the capital securities will have the right to direct the
institutional trustee with respect to matters under the declaration, and
therefore the indenture. In the event that any declaration event of default with
respect to the capital securities is waived by the holders of the capital
securities as provided in the declaration, the holders of common securities
pursuant to the declaration have agreed that such waiver also constitutes a
waiver of such declaration event of default with respect to the common
securities for all purposes under the declaration without any further act, vote
or consent of the holders of common securities. See "--Voting Rights."
If the institutional trustee fails to enforce its rights under the junior
subordinated debt securities, any holder of capital securities may directly
institute a legal proceeding against Citigroup to enforce the institutional
trustee's rights under the junior subordinated debt securities without first
instituting any legal proceeding against the institutional trustee or any other
person or entity. If a declaration event of default has occurred and is
continuing and such event is attributable to the failure of Citigroup to pay
interest or principal on the junior subordinated debt securities on the date
such interest or principal is otherwise payable, or in the case of redemption,
the redemption date, then a holder of capital securities may also bring a direct
action. This means that a holder may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
junior subordinated debt securities having a principal amount equal to the
aggregate liquidation amount of the capital securities of such holder on or
after the respective due date specified in the junior subordinated debt
securities without first (1) directing the institutional trustee to enforce the
terms of the junior subordinated debt securities or (2) instituting a legal
proceeding against Citigroup to enforce the institutional trustee's rights under
the junior subordinated debt securities. In connection with such direct action,
Citigroup will be subrogated to the rights of such holder of capital securities
under the declaration to the extent of any payment made by Citigroup to such
holder of capital securities in such direct action. This means that Citigroup
will be entitled to payment of amounts that a holder of capital securities
receives in respect of an unpaid distribution that resulted in the bringing of a
direct action to the extent that such holder receives or has already received
full payment with respect to such unpaid distribution from Citigroup Capital.
The holders of capital securities will not be able to exercise directly any
other remedy available to the holders of the junior subordinated debt
securities.
Upon the occurrence of an indenture event of default, the institutional
trustee as the sole holder of the junior subordinated debt securities will have
the right under the indenture to declare the principal of and interest on the
junior subordinated debt securities to be immediately due and payable. Citigroup
and Citigroup Capital are each required to file annually with the institutional
trustee an officers' certificate as to its compliance with all conditions and
covenants under the declaration.
VOTING RIGHTS
Except as described in this prospectus under "Description of
Guarantee--Modification of Guarantee; Assignment," and except as provided under
the Trust Act, the Trust Indenture Act and as otherwise required by law and the
declaration, the holders of the capital securities will have no voting rights.
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Subject to the requirement of the institutional trustee obtaining a tax
opinion in the circumstances set forth in the last sentence of this paragraph,
the holders of a majority in aggregate liquidation amount of the capital
securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the institutional trustee. The holders
also have the right to direct the exercise of any trust or power conferred upon
the institutional trustee under the declaration including the right to direct
the institutional trustee, as holder of the junior subordinated debt securities,
to:
(1) direct the time, method and place of conducting any proceeding for any
remedy available to the indenture trustee, or exercising any trust or
power conferred on the indenture trustee with respect to the junior
subordinated debt securities;
(2) waive any past indenture event of default that is waivable under Section
5.13 of the indenture;
(3) exercise any right to rescind or annul a declaration that the principal
of all the junior subordinated debt securities shall be due and payable;
or
(4) consent to any amendment, modification or termination of the indenture
or the junior subordinated debt securities where such consent shall be
required.
Where a consent or action under the indenture would require the consent or
act of holders of more than a majority in principal amount of the junior
subordinated debt securities, or a "super majority," affected thereby, then only
the holders of at least such super majority in aggregate liquidation amount of
the capital securities may direct the institutional trustee to give such consent
or take such action. If the institutional trustee fails to enforce its rights
under the junior subordinated debt securities, any record holder of capital
securities may directly institute a legal proceeding against Citigroup to
enforce the institutional trustee's rights under the junior subordinated debt
securities without first instituting any legal proceeding against the
institutional trustee or any other person or entity. The institutional trustee
shall notify all holders of the capital securities of any notice of default
received from the indenture trustee with respect to the junior subordinated debt
securities. Such notice shall state that such indenture event of default also
constitutes a declaration event of default. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy available to the
institutional trustee, the institutional trustee, as holder of the junior
subordinated debt securities, shall not take any of the actions described in
clauses (1), (2), (3) or (4) above unless the institutional trustee has obtained
an opinion of a nationally recognized independent tax counsel experienced in
such matters to the effect that, as a result of such action, Citigroup Capital
will not fail to be classified as a grantor trust for United States federal
income tax purposes.
If the consent of the institutional trustee, as the holder of the junior
subordinated debt securities, is required under the indenture with respect to
any amendment, modification or termination of the indenture, the institutional
trustee shall request the written direction of the holders of the trust
securities with respect to such amendment, modification or termination. Then,
the institutional trustee shall vote with respect to such amendment,
modification or termination as directed by a majority in liquidation amount of
the trust securities voting together as a single class. Where any amendment,
modification or termination under the indenture would require the consent of a
super majority, however, the institutional trustee may only give such consent at
the direction of the holders of at least the proportion in aggregate liquidation
amount of the trust securities which the relevant super majority represents of
the aggregate principal amount of the junior subordinated debt securities
outstanding. The institutional trustee shall be under no obligation to take any
such action in accordance with the directions of the holders of the trust
securities unless the institutional trustee has obtained an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that for United States federal income tax purposes Citigroup Capital will
not be classified as other than a grantor trust.
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A waiver of an indenture event of default by the institutional trustee at
the direction of the holders of the capital securities will constitute a waiver
of the corresponding declaration event of default.
Any required approval or direction of holders of capital securities may be
given at a separate meeting of holders of capital securities convened for such
purpose, at a meeting of all of the holders of trust securities or pursuant to
written consent. The regular trustees will mail to each holder of record of
capital securities a notice of any meeting at which such holders are entitled to
vote, or of any matter upon which action by written consent of such holders is
to be taken. Each such notice will include a statement setting forth the
following information:
- the date of such meeting or the date by which such action is to be taken;
- a description of any resolution proposed for adoption at such meeting on
which such holders are entitled to vote or of such matter upon which
written consent is sought; and
- instructions for the delivery of proxies or consents.
No vote or consent of the holders of capital securities will be required for
Citigroup Capital to redeem and cancel capital securities or distribute junior
subordinated debt securities in accordance with the declaration.
Notwithstanding that holders of capital securities are entitled to vote or
consent under any of the circumstances described above, any of the capital
securities that are owned at such time by Citigroup or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, Citigroup, will not be entitled to vote or consent. Instead, for
purposes of such vote or consent, such capital securities will be treated as if
they were not outstanding.
The procedures by which holders of capital securities may exercise their
voting rights are described below. See "--Book-Entry Only Issuance--The
Depository Trust Company."
Holders of the capital securities generally will have no rights to appoint
or remove the Citigroup trustees. Instead, the trustees may be appointed,
removed or replaced solely by Citigroup as the indirect or direct holder of all
of the common securities.
MODIFICATION OF THE DECLARATION
The declaration may be modified and amended if approved by the regular
trustees, and in certain circumstances, the institutional trustee and the
Delaware trustee. If, however, any proposed amendment provides for, or the
regular trustees otherwise propose to effect, (1) any action that would
adversely affect the powers, preferences or special rights of the trust
securities, whether by way of amendment to the declaration or otherwise or (2)
the dissolution, winding-up or termination of Citigroup Capital other than
pursuant to the terms of the declaration, then the holders of the trust
securities voting together as a single class will be entitled to vote on such
amendment or proposal. Such amendment or proposal shall not be effective except
with the approval of holders of at least a majority in liquidation amount of the
trust securities affected thereby. If, however, any amendment or proposal
referred to in clause (1) above would adversely affect only the capital
securities or the common securities, then only holders of the affected class
will be entitled to vote on such amendment or proposal. Such amendment or
proposal shall not be effective except with the approval of holders of a
majority in liquidation amount of such class of trust securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the declaration if such amendment or modification would (1) cause Citigroup
Capital to be classified for United States federal income tax purposes as other
than a grantor trust, (2) reduce or otherwise adversely affect the powers of the
institutional trustee or (3) cause Citigroup Capital to be deemed an "investment
company" which is required to be registered under the 1940 Act.
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MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
Citigroup Capital may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body except as
described below. Citigroup Capital may, with the consent of the regular trustees
and without the consent of the holders of the trust securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided, that:
(1) such successor entity either (a) expressly assumes all of the
obligations of Citigroup Capital under the trust securities or (b)
substitutes for the capital securities other securities having
substantially the same terms as the trust securities (the "successor
securities"), so long as the successor securities rank the same as the
trust securities rank with respect to distributions and payments upon
liquidation, redemption and otherwise;
(2) Citigroup expressly acknowledges a trustee of such successor entity
possessing the same powers and duties as the institutional trustee, in
its capacity as the holder of the junior subordinated debt securities;
(3) the capital securities or any successor securities are listed, or any
successor securities will be listed upon notification of issuance, on
any national securities exchange or with another organization on which
the capital securities are then listed or quoted;
(4) such merger, consolidation, amalgamation or replacement does not cause
the capital securities, including any successor securities, to be
downgraded by any nationally recognized statistical rating organization;
(5) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the holders
of the trust securities, including any successor securities, in any
material respect, other than with respect to any dilution of the
holders' interest in the new entity;
(6) such successor entity has a purpose identical to that of Citigroup
Capital;
(7) prior to such merger, consolidation, amalgamation or replacement,
Citigroup Capital has received an opinion of a nationally recognized
independent counsel to Citigroup Capital experienced in such matters to
the effect that,
(a) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the
holders of the trust securities, including any successor securities,
in any material respect, other than with respect to any dilution of
the holders' interest in the new entity, and
(b) following such merger, consolidation, amalgamation or replacement,
neither Citigroup Capital nor such successor entity will be required
to register as an "investment company" under the 1940 Act; and
(8) Citigroup guarantees the obligations of such successor entity under the
successor securities at least to the extent provided by the guarantee.
Notwithstanding the foregoing, Citigroup Capital shall not, except with the
consent of holders of 100% in liquidation amount of the trust securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause Citigroup Capital or the successor entity to be
classified as other than a grantor trust for United States federal income tax
purposes.
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BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
DTC will act as securities depositary for the capital securities. The
capital securities will be issued only as fully-registered securities registered
in the name of Cede & Co., which is DTC's nominee. One or more fully-registered
global capital securities certificates, representing the total aggregate number
of capital securities, will be issued and will be deposited with DTC. This means
that Citigroup Capital will not issue certificates to the purchasers for the
capital securities.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global capital securities as
represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, 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 Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
"participants" deposit with DTC. DTC also facilitates the settlement among
participants of securities transactions, such as transfers and pledges, in
deposited securities through computerized book-entry changes in participants'
accounts. This eliminates the need to exchange securities certificates. "Direct
participants" include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a number
of its direct participants and by the NYSE and The Nasdaq-Amex Market Group.
Access to the DTC system is also available to others, called "indirect
participants," such as securities brokers and dealers, banks and trust companies
that clear transactions through or maintain a direct or indirect custodial
relationship with a direct participant either directly or indirectly. The rules
applicable to DTC and its participants are on file with the SEC.
Purchases of capital securities within the DTC system must be made by or
through direct participants, who will receive a credit for the capital
securities on DTC's records. The actual purchasers of the capital securities are
referred to as "beneficial owners." The ownership interest of each beneficial
owner is in turn to be recorded on the direct or indirect participants' records.
Beneficial owners will not receive written confirmation from DTC of their
purchases. Instead, beneficial owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the direct or indirect participants through
which the beneficial owners purchased capital securities. Transfers of ownership
interests in the capital securities are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners will not receive certificates representing their ownership interests in
the capital securities, except in the event that use of the book-entry system
for the capital securities is discontinued.
To facilitate subsequent transfers, all the capital securities deposited by
participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of capital securities with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the capital securities. DTC's records reflect only
the identity of the direct participants to whose accounts such capital
securities are credited, which may or may not be the beneficial owners. The
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Any redemption notices will be sent by Citigroup Capital to Cede & Co. DTC
will then inform the direct participants, who will then contact the beneficial
owners. If less than all of the capital securities are being redeemed, DTC will
reduce the amount of the interest of each direct participant in such capital
securities in accordance with its procedures.
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Although voting with respect to the capital securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to the capital securities. Under its usual procedures, DTC
would mail an omnibus proxy to Citigroup Capital as soon as possible after the
record date. The omnibus proxy assigns Cede & Co. consenting or voting rights to
those direct participants to whose accounts the capital securities are credited
on the record date, identified in a listing attached to the omnibus proxy.
Citigroup and Citigroup Capital believe that the arrangements among DTC, direct
and indirect participants, and beneficial owners will enable the beneficial
owners to exercise rights equivalent in substance to those rights that can be
directly exercised by a holder of a beneficial interest in Citigroup Capital.
Distribution payments on the capital securities will be made to DTC. DTC's
practice is to credit direct participants' accounts on the relevant payment date
based on their respective holdings shown on DTC's records, unless DTC has reason
to believe that it will not receive payments on such payment date. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices between the participants and beneficial owners, as is the
case with securities held for the account of customers in bearer form or
registered in "street name." Such payments will be the responsibility of such
participant and not of DTC, Citigroup Capital or Citigroup, subject to any
statutory or regulatory requirements to the contrary that may be in effect from
time to time. Payment of distributions to DTC is the responsibility of Citigroup
Capital. Disbursement of such payments to direct participants is the
responsibility of DTC. Disbursement of such payments to the beneficial owners is
the responsibility of direct and indirect participants.
Except as provided in this prospectus, a beneficial owner in a global
capital security certificate will not be entitled to receive physical delivery
of capital securities. This means that each beneficial owner must rely on the
procedures of DTC to exercise any rights under the capital securities.
DTC may discontinue providing its services as securities depositary with
respect to the capital securities at any time by giving reasonable notice to
Citigroup Capital. Under such circumstances, in the event that a successor
securities depositary is not obtained, capital securities certificates are
required to be printed and delivered. Additionally, the regular trustees, with
the consent of Citigroup, may decide to discontinue use of the system of
book-entry transfers through DTC or any successor depositary with respect to the
capital securities. In that event, certificates for the capital securities will
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Citigroup and Citigroup Capital believe to
be reliable, but neither Citigroup nor Citigroup Capital takes responsibility
for the accuracy thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
Prior to the occurrence of a default with respect to the trust securities,
the institutional trustee undertakes to perform only such duties as are
specifically set forth in the declaration. After such a default, the
institutional trustee shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provisions, the institutional trustee is under no obligation to exercise
any of the powers vested in it by the declaration at the request of any holder
of capital securities unless offered reasonable indemnity by such holder against
the costs, expenses and liabilities which might be incurred thereby.
Notwithstanding the foregoing, the holders of capital securities will not be
required to offer such indemnity in the event such holders, by exercising their
voting rights, direct the institutional trustee to take any action following a
declaration event of default.
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PAYING AGENT
In the event that the capital securities do not remain in book-entry only
form, the following provisions will apply:
- the institutional trustee will act as paying agent and may designate an
additional or substitute paying agent at any time;
- registration of transfers of capital securities will be effected without
charge by or on behalf of Citigroup Capital, but upon payment, with the
giving of such indemnity as Citigroup Capital or the Company may require,
in respect of any tax or other government charges that may be imposed in
relation to it; and
- Citigroup Capital will not be required to register or cause to be
registered the transfer of capital securities after such capital
securities have been called for redemption.
GOVERNING LAW
The declaration and the capital securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The regular trustees are authorized and directed to operate Citigroup
Capital in such a way so that Citigroup Capital will not be required to register
as an "investment company" under the 1940 Act or be characterized as other than
a grantor trust for United States federal income tax purposes. Citigroup is
authorized and directed to conduct its affairs so that the junior subordinated
debt securities will be treated as indebtedness of Citigroup for United States
federal income tax purposes. In this connection, Citigroup and the regular
trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of Citigroup Capital or the certificate of
incorporation of Citigroup, that each of Citigroup and the regular trustees
determine in their discretion to be necessary or desirable to achieve such end,
as long as such action does not adversely affect the interests of the holders of
the capital securities or vary the terms thereof.
Holders of the capital securities have no preemptive rights.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the junior
subordinated debt securities in which Citigroup Capital will invest the proceeds
from the issuance and sale of the trust securities. The following description
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the indenture, dated as of October 7, 1996, between
Citigroup and The Chase Manhattan Bank, as the indenture trustee, the form of
which is filed as an exhibit to the registration statement of which this
prospectus forms a part and the Trust Indenture Act. Several capitalized terms
used herein are defined in the indenture. Wherever particular sections or
defined terms of the indenture are referred to, such sections or defined terms
are incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference.
Under circumstances discussed more fully below involving the dissolution of
Citigroup Capital, subject to obtaining any required regulatory approval, junior
subordinated debt securities will be distributed to the holders of the trust
securities in liquidation of Citigroup Capital. See "Description of the Capital
Securities--Special Event Redemption or Distribution."
If the junior subordinated debt securities are distributed to the holders of
the capital securities, Citigroup will use its best efforts to have the junior
subordinated debt securities listed on the NYSE or on such other national
securities exchange or similar organization on which the capital securities are
then listed or quoted.
GENERAL
The junior subordinated debt securities will be issued as unsecured debt
under the indenture. The junior subordinated debt securities will be limited in
aggregate principal amount to approximately $ . This amount is the sum of
the aggregate stated liquidation amount of the capital securities and the
capital contributed by Citigroup to Citigroup Capital in exchange for the common
securities. (Section 3.1)
The junior subordinated debt securities are not subject to a sinking fund
provision. The entire principal amount of the junior subordinated debt
securities will mature and become due and payable, together with any accrued and
unpaid interest thereon including Compound Interest (as defined herein) and
Additional Interest (as defined herein), if any, on , 20 .
If junior subordinated debt securities are distributed to holders of capital
securities in liquidation of such holders' interests in Citigroup Capital, such
junior subordinated debt securities will initially be issued in the form of one
or more global securities (as defined below). As described in this prospectus,
under limited circumstances, junior subordinated debt securities may be issued
in certificated form in exchange for a global security. In the event that junior
subordinated debt securities are issued in certificated form, such junior
subordinated debt securities will be in denominations of $ and integral
multiples thereof and may be transferred or exchanged at the offices described
below. Payments on junior subordinated debt securities issued as a global
security will be made to DTC, to a successor depositary or, in the event that no
depositary is used, to a paying agent for the junior subordinated debt
securities. In the event junior subordinated debt securities are issued in
certificated form, principal and interest will be payable, the transfer of the
junior subordinated debt securities will be registrable and junior subordinated
debt securities will be exchangeable for junior subordinated debt securities of
other denominations of a like aggregate principal amount at the corporate trust
office of the indenture trustee in New York, New York. Payment of interest may
be made at the option of Citigroup by check mailed to the address of the persons
entitled thereto. See "Book-Entry and Settlement."
Citigroup does not intend to issue and sell the junior subordinated debt
securities to any purchasers other than Citigroup Capital.
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There are no covenants or provisions in the indenture that would afford the
holders of the junior subordinated debt securities protection in the event of a
highly leveraged transaction, reorganization, restructuring, merger or similar
transaction involving Citigroup that may adversely affect such holders.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The indenture provides that Citigroup will not consolidate with or merge
into any other corporation or convey, transfer or lease its assets substantially
as an entirety unless:
- the successor is a corporation organized in the United States and
expressly assumes the due and punctual payment of the principal of, and
premium, if any, and interest on all junior subordinated debt securities
issued thereunder and the performance of every other covenant of the
indenture on the part of Citigroup; and
- immediately thereafter no event of default and no event which, after
notice or lapse of time, or both, would become an event of default, shall
have happened and be continuing.
Upon any such consolidation, merger, conveyance or transfer, the successor
corporation shall succeed to and be substituted for Citigroup under the
indenture. Thereafter the predecessor corporation shall be relieved of all
obligations and covenants under the indenture and the junior subordinated debt
securities. (Sections 8.1 and 8.2)
SUBORDINATION
The indenture provides that the junior subordinated debt securities are
subordinated and junior in right of payment to all Senior Indebtedness (as
defined below) of Citigroup. This means that no payment of principal, including
redemption payments, premium, if any, or interest on the junior subordinated
debt securities may be made if:
- any Senior Indebtedness of Citigroup has not been paid when due and any
applicable grace period with respect to such default has ended and such
default has not been cured or waived or ceased to exist; or
- the maturity of any Senior Indebtedness of Citigroup has been accelerated
because of a default.
Upon any distribution of assets of Citigroup to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all principal, premium, if any, and interest due or to become due on all Senior
Indebtedness of Citigroup must be paid in full before the holders of junior
subordinated debt securities are entitled to receive or retain any payment. Upon
satisfaction of all claims related to all Senior Indebtedness of Citigroup then
outstanding, the rights of the holders of the junior subordinated debt
securities will be subrogated to the rights of the holders of Senior
Indebtedness of Citigroup to receive payments or distributions applicable to
Senior Indebtedness until all amounts owing on the junior subordinated debt
securities are paid in full.
The term "Senior Indebtedness" means, with respect to Citigroup:
(1) the principal, premium, if any, and interest in respect of (a)
indebtedness for money borrowed and (b) indebtedness evidenced by
securities, notes, debentures, bonds or other similar instruments
issued by Citigroup;
(2) all capital lease obligations of Citigroup;
(3) all obligations of Citigroup issued or assumed as the deferred
purchase price of property, all conditional sale obligations of
Citigroup and all obligations of Citigroup under any conditional
sale or title retention agreement, but excluding trade accounts
payable arising in the ordinary course of business;
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(4) all obligations, contingent or otherwise, of Citigroup in respect of
any letters of credit, banker's acceptance, security purchase
facilities or similar credit transactions;
(5) all obligations in respect of interest rate swap, cap or other
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements;
(6) all obligations of the type referred to in clauses (1) through (5)
above of other persons for the payment of which Citigroup is
responsible or liable as obligor, guarantor or otherwise; and
(7) all obligations of the type referred to in clauses (1) through (6)
above of other persons secured by any lien on any property or asset
of Citigroup, whether or not such obligation is assumed by such
obligor, except for (A) any such indebtedness that is by its terms
subordinated to or equally with the junior subordinated debt
securities and (B) any indebtedness between or among Citigroup or
its affiliates, including all other debt securities and guarantees
in respect of those debt securities, issued to (a) any other
Citigroup trust or a trustee of such trust and (b) any other trust,
or a trustee of such trust, partnership or other entity affiliated
with Citigroup that is a financing vehicle of Citigroup in
connection with the issuance by such financing vehicle of preferred
securities or other securities guaranteed by Citigroup pursuant to
an instrument that ranks equally with, or junior to, the guarantee.
Such Senior Indebtedness shall continue to be Senior Indebtedness and be
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
The indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by Citigroup.
OPTIONAL REDEMPTION
Subject to obtaining any required regulatory approval, Citigroup shall have
the right to redeem the junior subordinated debt securities, in whole or in
part, from time to time, on or after , or at any time upon the
occurrence of a Tax Event, an Investment Company Event or a Regulatory Capital
Event, as described above, upon not less than 30 nor more than 60 days' notice.
The redemption price will be equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest, including Additional Interest (as
defined herein), if any, to the redemption date. If a partial redemption of the
capital securities resulting from a partial redemption of the junior
subordinated debt securities would result in the delisting of the capital
securities, Citigroup may only redeem the junior subordinated debt securities in
whole. (Section 11.2) See "Description of the Capital Securities--Special Event
Redemption."
INTEREST
The junior subordinated debt securities will bear interest at the annual
rate of %, from and including the original date of issuance, payable in
arrears on of each year, commencing . Each date on which
interest is paid is called an "interest payment date." Interest will be paid to
the person in whose name such junior subordinated debt security is registered,
subject to limited exceptions, at the close of business on the business day next
preceding such interest payment date. In the event the junior subordinated debt
securities shall not continue to remain in book-entry only form, Citigroup shall
have the right to select record dates, which shall be more than 14 days but less
than 60 days prior to the interest payment date.
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The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full period will be computed on the basis of the
actual number of days elapsed per 30-day month. In the event that any date on
which interest is payable on the junior subordinated debt securities is not a
business day, then payment of the interest payable on such date will be made on
the next succeeding day that is a business day, and without any interest or
other payment in respect of any such delay. However, if such business day is in
the next succeeding calendar year, then such payment shall be made on the
immediately preceding business day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Citigroup can defer interest payments by extending the interest payment
period for a period not exceeding consecutive periods. However, no
extension period may extend beyond the maturity of the junior subordinated debt
securities. At the end of such extension period, Citigroup shall pay all
interest then accrued and unpaid, including any Additional Interest, together
with interest thereon compounded at the rate specified for the junior
subordinated debt securities to the extent permitted by applicable law
("Compound Interest"). During any such extension period:
- Citigroup shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock or make any guarantee
payment with respect thereto other than
- repurchases, redemptions or other acquisitions of shares of capital
stock of Citigroup in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of employees,
officers, directors or consultants,
- as a result of an exchange or conversion of any class or series of
Citigroup's capital stock for any other class or series of Citigroup's
capital stock, or
- the purchase of fractional interests in shares of Citigroup's capital
stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and
- Citigroup shall not make any payment of interest, principal or premium, if
any, on, or repay, repurchase or redeem, any debt securities issued by
Citigroup which rank equally with or junior to the junior subordinated
debt securities.
The foregoing, however, will not apply to any stock dividends paid by Citigroup
where the dividend stock is the same stock as that on which the dividend is
being paid. Prior to the termination of any extension period, Citigroup may
further defer payments of interest by extending such extension period. Such
extension period, including all such previous and further extensions, however,
may not exceed consecutive interest periods, including the
interest period in which notice of such extension period (as described
below) is given. No extension period, however, may extend beyond the maturity of
the junior subordinated debt securities. Upon the termination of any extension
period and the payment of all amounts then due, Citigroup may commence a new
extension period, subject to the terms set forth in this section. No interest
during an extension period, except at the end of such period, shall be due and
payable.
Citigroup has no present intention of exercising its right to defer payments
of interest by extending the interest payment period on the junior subordinated
debt securities. If the institutional trustee shall be the sole holder of the
junior subordinated debt securities, Citigroup shall give the regular trustees
and the institutional trustee notice of its selection of such extension period
one business day prior to the earlier of (1) the date distributions on the
capital securities would be payable, if not for such extension period, or (2)
the date the regular trustees are required to give notice to the NYSE or other
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applicable self-regulatory organization or to holders of the capital securities
of the record date or the date such distribution would be payable, if not for
such extension period, but in any event one business day prior to such record
date. The regular trustees shall give notice of Citigroup's selection of such
extension period to the holders of the capital securities. If the institutional
trustee shall not be the sole holder of the junior subordinated debt securities,
Citigroup shall give the holders of the junior subordinated debt securities
notice of its selection of such extension period ten business days prior to the
earlier of (1) the next succeeding interest payment date or (2) the date upon
which Citigroup is required to give notice to the NYSE or other applicable
self-regulatory organization or to holders of the junior subordinated debt
securities of the record or payment date of such related interest payment.
(Sections 13.1 and 13.2)
ADDITIONAL INTEREST
If at any time Citigroup Capital is required to pay any taxes, duties,
assessments or governmental charges of whatever nature, other than withholding
taxes, imposed by the United States, or any other taxing authority, then
Citigroup will be required to pay additional interest ("Additional Interest") on
the junior subordinated debt securities. The amount of any Additional Interest
will be an amount sufficient so that the net amounts received and retained by
Citigroup Capital after paying any such taxes, duties, assessments or other
governmental charges will be not less than the amounts Citigroup Capital would
have received had no such taxes, duties, assessments or other governmental
charges been imposed. This means that Citigroup Capital will be in the same
position it would have been if it did not have to pay such taxes, duties,
assessments or other charges.
INDENTURE EVENTS OF DEFAULT
The indenture provides that the following are events of default with respect
to the junior subordinated debt securities:
(1) default in the payment of the principal of, or premium, if any, on,
any junior subordinated debt security at its maturity;
(2) default for 30 days in the payment of any installment of interest on
any junior subordinated debt security;
(3) default for 90 days after written notice in the performance of any
other covenant in respect of the junior subordinated debt
securities;
(4)specified events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of Citigroup;
and
(5) any other event of default provided in the applicable resolution of
the Board of Directors or supplemental indenture under which the
junior subordinated debt securities are issued.
The indenture trustee may withhold notice to the holders of the junior
subordinated debt securities of any default with respect thereto, except in the
payment of principal, premium or interest, if it considers such withholding to
be in the interests of such holders. (Section 5.1)
If any indenture event of default shall occur and be continuing, the
institutional trustee, as the holder of the junior subordinated debt securities,
will have the right to declare the principal of and the interest on the junior
subordinated debt securities, including any Compound Interest and Additional
Interest, if any, and any other amounts payable under the indenture to be
immediately due and payable and to enforce its other rights as a creditor with
respect to the junior subordinated debt securities. (Section 5.2) An indenture
event of default also constitutes a declaration event of default. The holders of
capital securities in limited circumstances have the right to direct the
institutional trustee to exercise
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its rights as the holder of the junior subordinated debt securities. See
"Description of the Capital Securities--Declaration Events of Default" and
"--Voting Rights."
Notwithstanding the foregoing, if a declaration event of default has
occurred and is continuing and such event is attributable to the failure of
Citigroup to pay interest or principal on the junior subordinated debt
securities when such interest or principal is payable, Citigroup acknowledges
that, in such event, a holder of capital securities may institute a direct
action for payment on or after the respective due date specified in the junior
subordinated debt securities. Citigroup may not amend the indenture to remove
the foregoing right to bring a direct action without the prior written consent
of all of the holders of capital securities of Citigroup Capital.
Notwithstanding any payment made to such holder of capital securities by
Citigroup in connection with a direct action, Citigroup shall remain obligated
to pay the principal of or interest on the junior subordinated debt securities
held by Citigroup Capital or the institutional trustee of Citigroup Capital.
Citigroup shall be subrogated to the rights of the holder of such capital
securities with respect to payments on the capital securities to the extent of
any payments made by Citigroup to such holder in any direct action. The holders
of capital securities will not be able to exercise directly any other remedy
available to the holders of the junior subordinated debt securities. (Sections
5.7 and 5.8)
MODIFICATIONS AND AMENDMENTS
Modifications and amendments to the indenture may be made by Citigroup and
the indenture trustee with the consent of the holders of a majority in principal
amount of the junior subordinated debt securities at the time outstanding.
However, no such modification or amendment may, without the consent of the
holder of each junior subordinated debt security affected thereby: (1) modify
the terms of payment of principal, premium, if any, or interest on; or (2)
reduce the percentage of holders of junior subordinated debt securities
necessary to modify or amend the indenture or waive compliance by Citigroup with
any covenant or past default. If the junior subordinated debt securities are
held by Citigroup Capital or a trustee of Citigroup Capital, such supplemental
indenture shall not be effective until the holders of a majority in liquidation
preference of trust securities of Citigroup Capital shall have consented to such
supplemental indenture. If the consent of the holder of each outstanding junior
subordinated debt security is required, such supplemental indenture shall not be
effective until each holder of the trust securities of Citigroup Capital shall
have consented to such supplemental indenture. (Section 9.2)
DISCHARGE AND DEFEASANCE
Citigroup may discharge most of its obligations to holders of the junior
subordinated debt securities issued under the indenture if such junior
subordinated debt securities have not already been delivered to the indenture
trustee for cancellation and either have become due and payable or are by their
terms due and payable within one year, or are to be called for redemption within
one year. Citigroup discharges its obligations by depositing with the indenture
trustee an amount certified to be sufficient to pay when due the principal of
and premium, if any, and interest on all outstanding junior subordinated debt
securities and to make any mandatory sinking fund payments thereon when due.
(Section 4.1)
Unless otherwise specified in this prospectus with respect to the junior
subordinated debt securities, Citigroup, at its option:
(1) will be discharged from any and all obligations in respect of the junior
subordinated debt securities, except for certain obligations to pay all
expenses of Citigroup Capital, to register the transfer or exchange of
junior subordinated debt securities, to replace mutilated, defaced,
destroyed, lost or stolen junior subordinated debt securities, and to
maintain paying agents and hold monies for payment in trust; or
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(2) need not comply with certain covenants specified herein with respect to
the junior subordinated debt securities.
The occurrence of an event described in clause (3) under "Events of Default"
above with respect to any defeased covenant and any other event of default
provided in the applicable resolution of the Board of Directors or supplemental
indenture under which the junior subordinated debt securities are issued shall
no longer be an event of default if, in either case, Citigroup deposits with the
indenture trustee, in trust, money or U.S. Government Obligations that through
the payment of interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay all the principal of and
premium, if any, and any interest on the junior subordinated debt securities
when such payments are due, which may include one or more redemption dates
designated by Citigroup, in accordance with the terms of the junior subordinated
debt securities. Such a trust may only be established, if, among other things,
Citigroup shall have delivered an opinion of counsel, which, in the case of a
discharge pursuant to clause (1), must be based upon a ruling or administrative
pronouncement of the IRS, to the effect that the holders of the junior
subordinated debt securities will not recognize gain or loss for federal income
tax purposes as a result of such deposit or defeasance and will be subject to
federal income tax in the same manner as if such defeasance had not occurred.
(Sections 4.2, 4.3 and 4.4) In the event Citigroup omits to comply with its
remaining obligations under the indenture after a defeasance of the indenture
with respect to the junior subordinated debt securities as described under
clause (2) above and the junior subordinated debt securities are declared due
and payable because of the occurrence of any undefeased event of default, the
amount of money and U.S. Government Obligations on deposit with the indenture
trustee may be insufficient to pay amounts due on the junior subordinated debt
securities at the time of the acceleration resulting from such event of default.
However, Citigroup will remain liable in respect of such payments.
CONCERNING THE INDENTURE TRUSTEE
The indenture trustee has extended substantial credit facilities, the
borrowings under which constitute Senior Indebtedness, to Citigroup. Citigroup
and certain of its subsidiaries also maintain bank accounts, borrow money and
have other customary commercial banking or investment banking relationships with
the indenture trustee in the ordinary course of business.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of capital securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of Citigroup
Capital as a result of the occurrence of a Special Event, the junior
subordinated debt securities will be issued in the form of one or more global
certificates registered in the name of the depositary or its nominee. Each
global certificate is referred to as a "global security." Except under the
limited circumstances described below, junior subordinated debt securities
represented by a global security will not be exchangeable for, and will not
otherwise be issuable as, junior subordinated debt securities in definitive
form. The global securities described above may not be transferred except by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or to a successor depositary
or its nominee.
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 beneficial interests in such a global security.
Except as provided below, owners of beneficial interests in such a global
security will not be entitled to receive physical delivery of junior
subordinated debt securities in definitive form and will not be considered the
holders, as defined in the indenture, of such global security for any purpose
under the indenture. A global security representing junior subordinated debt
securities is only exchangeable
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for another global security of like denomination and tenor to be registered in
the name of the depositary or its nominee or to a successor depositary or its
nominee. This means that each beneficial owner must rely on the procedures of
the depositary, or if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a holder under the indenture.
THE DEPOSITARY
If junior subordinated debt securities are distributed to holders of capital
securities in liquidation of such holders' interests in Citigroup Capital, DTC
will act as securities depositary for the junior subordinated debt securities.
As of the date of this prospectus, the description in this prospectus of DTC's
book-entry system and DTC's practices as they relate to purchases, transfers,
notices and payments with respect to the capital securities apply in all
material respects to any debt obligations represented by one or more global
securities held by DTC. Citigroup may appoint a successor to DTC or any
successor depositary in the event DTC or such successor depositary is unable or
unwilling to continue as a depositary for the global securities. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Capital Securities--Book-Entry Only Issuance-- The
Depository Trust Company."
None of Citigroup, Citigroup Capital, the indenture trustee, any paying
agent and any other agent of Citigroup or the indenture trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global security
for such junior subordinated debt securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A global security shall be exchangeable for junior subordinated debt
securities registered in the names of persons other than the depositary or its
nominee only if:
- the depositary notifies Citigroup that it is unwilling or unable to
continue as a depositary for such global security and no successor
depositary shall have been appointed;
- the depositary, at any time, ceases to be a clearing agency registered
under the Exchange Act at which time the depositary is required to be so
registered to act as such depositary and no successor depositary shall
have been appointed;
- Citigroup, in its sole discretion, determines that such global security
shall be so exchangeable; or
- there shall have occurred an indenture event of default with respect to
such junior subordinated debt securities.
Any global security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for junior subordinated debt securities registered in such
names as the depositary shall direct. It is expected that such instructions will
be based upon directions received by the depositary from its participants with
respect to ownership of beneficial interests in such global security.
CERTAIN COVENANTS
If the junior subordinated debt securities are issued to Citigroup Capital
or a trustee of such trust in connection with the issuance of trust securities
by Citigroup Capital and
(1) there shall have occurred and be continuing an event of default,
(2)Citigroup shall be in default with respect to its payment of any
obligations under the guarantee, or
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(3)Citigroup shall have given notice of its election to defer payments
of interest on the junior subordinated debt securities by extending
the interest payment period as provided in the indenture and such
period, or any extension thereof, shall be continuing,
then
(a) Citigroup shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto other than
- repurchases, redemptions or other acquisitions of shares of capital
stock of Citigroup in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of employees,
officers, directors or consultants,
- as a result of an exchange or conversion of any class or series of
Citigroup's capital stock for any other class or series of Citigroup's
capital stock, or
- the purchase of fractional interests in shares of Citigroup's capital
stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and
(b) Citigroup shall not make any payment of interest, principal or premium,
if any, on, or repay, repurchase or redeem any debt securities issued by
Citigroup which rank equally with or junior to the junior subordinated
debt securities.
The above restriction, however, will not apply to any stock dividends paid by
Citigroup where the dividend stock is the same stock as that on which the
dividend is being paid. (Section 13.3)
So long as the trust securities remain outstanding, Citigroup will covenant
to:
- directly or indirectly maintain 100% ownership of the common securities of
Citigroup Capital; however, any permitted successor of Citigroup under the
indenture may succeed to Citigroup's ownership of such common securities;
- not voluntarily dissolve, wind-up or terminate Citigroup Capital, except
in connection with a distribution of junior subordinated debt securities
as described above and in connection with certain mergers, consolidations
or amalgamations permitted by the declaration;
- timely perform its duties as sponsor of Citigroup Capital; and
- use its reasonable efforts to cause Citigroup Capital (a) to remain a
statutory business trust, except in connection with the distribution of
junior subordinated debt securities to the holders of trust securities in
liquidation of Citigroup Capital, the redemption of all of the trust
securities of Citigroup Capital, or certain mergers, consolidations or
amalgamations, each as permitted by the declaration of Citigroup Capital,
and (b) to otherwise continue to be classified as a grantor trust for
United States federal income tax purposes. (Section 10.5)
MISCELLANEOUS
The indenture provides that Citigroup will pay all fees and expenses related
to:
- the offering of the trust securities and the junior subordinated debt
securities;
- the organization, maintenance and dissolution of Citigroup Capital;
- the retention of the Citigroup trustees; and
- the enforcement by the institutional trustee of the rights of the holders
of the capital securities.
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DESCRIPTION OF GUARANTEE
Set forth below is a summary of information concerning the guarantee that
will be executed and delivered by Citigroup for the benefit of the holders of
capital securities. The guarantee will be qualified as an indenture under the
Trust Indenture Act. The Chase Manhattan Bank will act as the "guarantee
trustee." The terms of the guarantee will be those set forth in the guarantee
and those made part of the guarantee by the Trust Indenture Act. The summary
does not purport to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by reference to, the form of guarantee,
which is filed as an exhibit to the registration statement of which this
prospectus forms a part, and the Trust Indenture Act. The guarantee will be held
by the guarantee trustee for the benefit of the holders of the capital
securities.
GENERAL
Pursuant to and to the extent set forth in the guarantee, Citigroup will
irrevocably and unconditionally agree to pay in full to the holders of the
capital securities, except to the extent paid by Citigroup Capital, as and when
due, regardless of any defense, right of set-off or counterclaim which Citigroup
Capital may have or assert, the following payments, which are referred to as
"guarantee payments," without duplication:
- any accrued and unpaid distributions that are required to be paid on the
capital securities, to the extent Citigroup Capital has funds available
for such distributions;
- the redemption price of $ per capital security, plus all accrued and
unpaid distributions (the "redemption price"), to the extent Citigroup
Capital has funds available for such redemptions, with respect to any
capital securities called for redemption by Citigroup Capital; and
- upon a voluntary or involuntary dissolution, winding-up or termination of
Citigroup Capital, other than in connection with the distribution of
junior subordinated debt securities to the holders of capital securities
or the redemption of all of the capital securities, the lesser of
- the aggregate of the liquidation amount and all accrued and unpaid
distributions on the capital securities to the date of payment, or
- the amount of assets of Citigroup Capital remaining for distribution to
holders of the capital securities in liquidation of Citigroup Capital.
Citigroup's obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by Citigroup to the holders of capital
securities or by causing Citigroup Capital to pay such amounts to such holders.
The guarantee will be on a subordinated basis with respect to the capital
securities from the time of issuance of the capital securities but will not
apply to any payment of distributions or redemption price, or to payments upon
the dissolution, winding-up or termination of Citigroup Capital, except to the
extent Citigroup Capital shall have funds available therefor. If Citigroup does
not make interest payments on the junior subordinated debt securities, Citigroup
Capital will not pay distributions on the capital securities and will not have
funds available therefor. The guarantee, when taken together with Citigroup's
obligations under the junior subordinated debt securities, the indenture and the
declaration, including its obligations to pay costs, expenses, debts and
liabilities of Citigroup Capital, other than with respect to trust securities,
will provide a full and unconditional guarantee on a subordinated basis by
Citigroup of payments due on the capital securities. See "Description of Junior
Subordinated Debt Securities."
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CERTAIN COVENANTS OF CITIGROUP
In the guarantee, Citigroup will covenant that, so long as any capital
securities remain outstanding, if there shall have occurred any event that would
constitute an event of default under such guarantee or the declaration, then:
- Citigroup shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock or make any guarantee
payment with respect thereto other than
- repurchases, redemptions or other acquisitions of shares of capital
stock of Citigroup in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of employees,
officers, directors or consultants,
- as a result of an exchange or conversion of any class or series of
Citigroup's capital stock for any other class or series of Citigroup's
capital stock, or
- the purchase of fractional interests in shares of Citigroup's capital
stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and
- Citigroup shall not make any payment of interest, principal or premium, if
any, on, or repay, repurchase or redeem, any debt securities issued by
Citigroup which rank equally with or junior to the junior subordinated
debt securities.
The guarantee, however, will except from the foregoing any stock dividends paid
by Citigroup where the dividend stock is the same stock as that on which the
dividend is being paid.
MODIFICATION OF GUARANTEE; ASSIGNMENT
The guarantee may be amended only with the prior approval of the holders of
not less than a majority in aggregate liquidation amount of the outstanding
capital securities. No vote will be required, however, with respect to any
changes that do not adversely affect the rights of holders of capital
securities. All guarantees and agreements contained in the guarantee shall bind
the successors, assignees, receivers, trustees and representatives of Citigroup
and shall inure to the benefit of the holders of the capital securities then
outstanding.
EVENTS OF DEFAULT
An event of default under the guarantee will occur upon the failure of
Citigroup to perform any of its payment or other obligations required by the
guarantee. The holders of a majority in aggregate liquidation amount of the
capital securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the guarantee trustee in
respect of the guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under the guarantee. If the guarantee
trustee fails to enforce the guarantee trustee's rights under the guarantee, any
holder of related capital securities may directly institute a legal proceeding
against Citigroup to enforce the guarantee trustee's rights under the guarantee
without first instituting a legal proceeding against Citigroup Capital, the
guarantee trustee or any other person or entity. A holder of capital securities
may also directly institute a legal proceeding against Citigroup to enforce such
holder's right to receive payment under the guarantee without first (1)
directing the guarantee trustee to enforce the terms of the guarantee or (2)
instituting a legal proceeding against Citigroup Capital or any other person or
entity.
Citigroup will be required to provide to the guarantee trustee such
documents, reports and information as required by the Trust Indenture Act.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE
Prior to the occurrence of a default with respect to the guarantee, the
guarantee trustee undertakes to perform only such duties as are specifically set
forth in the guarantee. After such default, the guarantee trustee will exercise
the same degree of care as a prudent individual would exercise in the conduct of
his or her own affairs. Subject to such provision, the guarantee trustee is
under no obligation to exercise any of the powers vested in it by the guarantee
at the request of any holder of capital securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The guarantee will terminate as to the capital securities upon full payment
of the redemption price of all capital securities, upon distribution of the
junior subordinated debt securities to the holders of the capital securities or
upon full payment of the amounts payable in accordance with the declaration upon
liquidation of Citigroup Capital. The guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of capital
securities must restore payment of any sums paid under the capital securities or
the guarantee.
STATUS OF THE GUARANTEE
The guarantee will constitute an unsecured obligation of Citigroup and will
rank:
- subordinate and junior in right of payment to all other liabilities of
Citigroup;
- equally with the most senior preferred or preference stock now or
hereafter issued by Citigroup and with any guarantee now or hereafter
entered into by Citigroup in respect of any preferred or preference stock
of any subsidiary of Citigroup; and
- senior to Citigroup's common stock. The terms of the capital securities
provide that each holder of capital securities by acceptance of such
securities agrees to the subordination provisions and other terms of the
guarantee.
The guarantee will constitute a guarantee of payment and not of collection.
This means that the guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the guarantee without
instituting a legal proceeding against any other person or entity.
GOVERNING LAW
The guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
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EFFECT OF OBLIGATIONS UNDER THE
JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
As set forth in the declaration, the sole purpose of Citigroup Capital is to
issue the trust securities evidencing undivided beneficial interests in the
assets of Citigroup Capital, and to invest the proceeds from such issuance and
sale in the junior subordinated debt securities.
As long as payments of interest and other payments are made when due on the
junior subordinated debt securities, such payments will be sufficient to cover
the distributions and payments due on the trust securities. This is due to the
following factors:
- the aggregate principal amount of junior subordinated debt securities will
be equal to the sum of the aggregate stated liquidation amount of the
trust securities;
- the interest rate and the interest and other payment dates on the junior
subordinated debt securities will match the distribution rate and
distribution and other payment dates for the capital securities;
- pursuant to the indenture, Citigroup shall pay, and Citigroup Capital
shall not be obligated to pay, directly or indirectly, all costs,
expenses, debt and obligations of Citigroup Capital other than with
respect to the trust securities; and
- the declaration further provides that the Citigroup trustees shall not
cause or permit Citigroup Capital to, among other things, engage in any
activity that is not consistent with the purposes of Citigroup Capital.
Payments of distributions, to the extent there are available funds, and
other payments due on the capital securities, to the extent there are available
funds, are guaranteed by Citigroup as and to the extent set forth in this
prospectus. If Citigroup does not make interest payments on the junior
subordinated debt securities purchased by Citigroup Capital, it is expected that
Citigroup Capital will not have sufficient funds to pay distributions on the
capital securities. The guarantee is a guarantee on a subordinated basis with
respect to the capital securities from the time of its issuance, but does not
apply to any payment of distributions unless and until Citigroup Capital has
sufficient funds for the payment of such distributions. See "Description of
Guarantee."
The guarantee covers the payment of distributions and other payments on the
capital securities only if and to the extent that Citigroup has made a payment
of interest or principal or other payments on the junior subordinated debt
securities held by Citigroup Capital as its sole asset. The guarantee, when
taken together with Citigroup's obligations under the junior subordinated debt
securities and the indenture and its obligations under the declaration,
including its obligations to pay costs, expenses, debts and liabilities of
Citigroup Capital, other than with respect to the trust securities, will provide
a full and unconditional guarantee of distributions, redemption payments and
liquidation payments on the capital securities.
If Citigroup fails to make interest or other payments on the junior
subordinated debt securities when due, taking account of any extension period,
the declaration provides a mechanism whereby the holders of the capital
securities may direct the institutional trustee to enforce its rights under the
junior subordinated debt securities. If the institutional trustee fails to
enforce its rights under the junior subordinated debt securities, any holder of
capital securities may directly institute a legal proceeding against Citigroup
to enforce the institutional trustee's rights under the junior subordinated debt
securities without first instituting any legal proceeding against the
institutional trustee or any other person or entity. See "Description of the
Capital Securities--Book Entry Only Issuance--The Depository Trust Company" and
"--Voting Rights."
If a declaration event of default has occurred and is continuing and such
event is attributable to the failure of Citigroup to pay interest or principal
on the junior subordinated debt securities on the
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date such interest or principal is otherwise payable, or in the case of
redemption, on the redemption date, then a holder of capital securities may also
institute a direct action for payment on or after the respective due date
specified in the junior subordinated debt securities without first (1) directing
the institutional trustee to enforce the terms of the junior subordinated debt
securities or (2) instituting a legal proceeding against Citigroup to enforce
the institutional trustee's rights under the junior subordinated debt
securities. In connection with such direct action, Citigroup will be subrogated
to the rights of such holder of capital securities under the declaration to the
extent of any payment made by Citigroup to such holder of capital securities in
such direct action. Consequently, Citigroup will be entitled to payment of
amounts that a holder of capital securities receives in respect of an unpaid
distribution that resulted in the bringing of a direct action to the extent that
such holder receives or has already received full payment with respect to such
unpaid distribution from Citigroup Capital.
Citigroup, under the guarantee, acknowledges that the guarantee trustee
shall enforce the guarantee on behalf of the holders of the capital securities.
If Citigroup fails to make payments under the guarantee, the guarantee provides
a mechanism whereby the holders of the capital securities may direct the
guarantee trustee to enforce its rights thereunder. If the guarantee trustee
fails to enforce the guarantee, any holder of capital securities may directly
institute a legal proceeding against Citigroup to enforce the guarantee
trustee's rights under the guarantee without first instituting a legal
proceeding against Citigroup Capital, the guarantee trustee, or any other person
or entity. A holder of capital securities may also directly institute a legal
proceeding against Citigroup to enforce such holder's right to receive payment
under the guarantee without first (1) directing the guarantee trustee to enforce
the terms of the guarantee or (2) instituting a legal proceeding against
Citigroup Capital or any other person or entity.
Citigroup and Citigroup Capital believe that the above mechanisms and
obligations, taken together, are equivalent to a full and unconditional
guarantee by Citigroup of payments due on the capital securities. See
"Description of Guarantee--General."
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of capital securities.
Unless otherwise stated, this summary deals only with capital securities held as
capital assets by holders who purchase the capital securities upon original
issuance. It does not deal with special classes of holders such as banks,
thrifts, real estate investment trusts, regulated investment companies, common
trust funds, insurance companies, dealers in securities or currencies,
tax-exempt investors, persons that have a functional currency other than the
United States Dollar or persons that will hold the capital securities as a
position in a "straddle," as part of a "synthetic security" or "hedge," as part
of a "conversion transaction" or other integrated investment, or as other than a
capital asset. Further, it does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may be applicable to the capital securities. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury regulations thereunder and administrative and judicial interpretations
thereof, as of the date of this prospectus, all of which are subject to change,
possibly with retroactive effect.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
In connection with the issuance of the junior subordinated debt securities,
Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden, Arps"), tax counsel to
Citigroup and Citigroup Capital, will render its opinion generally to the effect
that, under then current law and assuming full compliance with the
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terms of the indenture and other relevant documents, and based on the facts and
assumptions contained in such opinion, the junior subordinated debt securities
held by Citigroup Capital will be classified for United States federal income
tax purposes as indebtedness of Citigroup.
CLASSIFICATION OF CITIGROUP CAPITAL
In connection with the issuance of the capital securities, Skadden, Arps
will render its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the declaration, the indenture and
other relevant documents, and based on the facts and assumptions contained in
such opinion, Citigroup Capital will be classified for United States federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation. Accordingly, for United States federal income tax purposes, each
holder of capital securities generally will be considered the owner of an
undivided interest in the junior subordinated debt securities. Each holder will
be required to include in its gross income all interest or original issue
discount ("OID") and any gain recognized with respect to its allocable share of
those junior subordinated debt securities.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under Treasury regulations applicable to debt instruments issued on or after
August 13, 1996 (the "regulations"), a "remote" contingency that stated interest
will not be timely paid will be ignored in determining whether a debt instrument
is issued with OID. Citigroup believes that the likelihood of its exercising its
option to defer payments is remote within the meaning of the regulations. Based
on the foregoing, Citigroup believes that, although the matter is not free from
doubt, the junior subordinated debt securities will not be considered to be
issued with OID at the time of their original issuance. Accordingly, each holder
of capital securities should include in gross income such holder's allocable
share of interest on the junior subordinated debt securities in accordance with
such holder's method of tax accounting.
Under the regulations, if the option to defer any payment of interest was
determined not to be "remote," or if Citigroup exercised such option, the junior
subordinated debt securities would be treated as issued with OID at the time of
issuance or at the time of such exercise, as the case may be. Then, all stated
interest on the junior subordinated debt securities would thereafter be treated
as OID as long as the junior subordinated debt securities remained outstanding.
In such event, all of a holder's taxable interest income with respect to the
junior subordinated debt securities would constitute OID that would have to be
included in income on an economic accrual basis before the receipt of the cash
attributable to the interest, regardless of such holder's method of tax
accounting, and actual distributions of stated interest would not be reported as
taxable income. Consequently, a holder of capital securities would be required
to include in gross income OID even though Citigroup would not make any actual
cash payments during an extension period.
No rulings or other interpretations have been issued by the IRS which have
addressed the meaning of the term "remote" as used in the regulations, and it is
possible that the IRS could take a position contrary to the interpretation in
this prospectus.
Because income on the capital securities will constitute interest or OID,
corporate holders of capital securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the capital securities.
RECEIPT OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF
CITIGROUP CAPITAL
Under the circumstances described in this prospectus, junior subordinated
debt securities may be distributed to holders in exchange for capital securities
upon the liquidation of Citigroup Capital. Under current law, such a
distribution, for United States federal income tax purposes, would be treated as
a non-taxable event to each holder, and each holder would receive an aggregate
tax basis in the junior subordinated debt securities equal to such holder's
aggregate tax basis in its capital securities. A
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holder's holding period in the junior subordinated debt securities received in
liquidation of Citigroup Capital would include the period during which the
capital securities were held by such holder. See "Description of the Capital
Securities--Special Event Redemption or Distribution."
Under the circumstances described in this prospectus, the junior
subordinated debt securities may be redeemed by Citigroup for cash and the
proceeds of such redemption distributed by Citigroup Capital to holders in
redemption of their capital securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition of the redeemed capital securities. Accordingly, a holder could
recognize gain or loss as if it had sold such redeemed capital securities for
cash. See "Description of the Capital Securities" and "United States Federal
Income Taxation--Sales of Capital Securities."
SALES OF CAPITAL SECURITIES
A holder that sells capital securities will be considered to have disposed
of all or part of its ratable share of the junior subordinated debt securities
and will recognize gain or loss equal to the difference between its adjusted tax
basis in the capital securities and the amount realized on the sale of such
capital securities. Assuming that Citigroup does not exercise its option to
defer payment of interest on the junior subordinated debt securities and that
the junior subordinated debt securities are not deemed to be issued with OID, a
holder's adjusted tax basis in the capital securities generally will be its
initial purchase price. If the junior subordinated debt securities are deemed to
be issued with OID, a holder's tax basis in the capital securities generally
will be its initial purchase price, increased by OID previously includible in
such holder's gross income to the date of disposition and decreased by
distributions or other payments received on the capital securities since and
including the date that the junior subordinated debt securities were deemed to
be issued with OID. Such gain or loss generally will be a capital gain or loss,
except to the extent of any accrued interest with respect to such holder's
ratable share of the junior subordinated debt securities required to be included
in income, and generally will be a long-term capital gain or loss if the capital
securities have been held for more than one year.
Should Citigroup exercise its option to defer payment of interest on the
junior subordinated debt securities, the capital securities may trade at a price
that does not accurately reflect the value of accrued but unpaid interest with
respect to the underlying junior subordinated debt securities. In the event of
such a deferral, a holder who disposes of its capital securities between record
dates for payments of distributions will be required to include in income as
ordinary income accrued but unpaid interest on the junior subordinated debt
securities to the date of disposition and to add such amount to its adjusted tax
basis in its ratable share of the underlying junior subordinated debt securities
deemed disposed of. To the extent the selling price is less than the holder's
adjusted tax basis, such holder will recognize a capital loss. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes.
NON-UNITED STATES HOLDERS
For purposes of this discussion, a "Non-United States Holder" is any person
other than:
- a citizen or a resident of the United States;
- a corporation, partnership, or other entity created or organized in or
under the laws of the United States or any political subdivision thereof;
- an estate the income of which is subject to United States federal income
tax regardless of its source; or
- a trust if (a) a U.S. court is able to exercise primary supervision over
the trust's administration and (b) one or more United States persons have
the authority to control all of the trust's substantial decisions.
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The term "United States" means the United States of America, including the
States and the District of Columbia.
Under present United States federal income tax law: (1) payments by
Citigroup Capital or any of its paying agents to any holder of a capital
security who or which is a Non-United States Holder will not be subject to
United States federal withholding tax; provided that:
(a) the beneficial owner of the capital security does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of Citigroup entitled to vote,
(b) the beneficial owner of the capital security is not a controlled foreign
corporation that is related to Citigroup through stock ownership, and
(c) either
(A) the beneficial owner of the capital security certifies to Citigroup
Capital or its agent, under penalties of perjury, that it is not a United
States holder and provides its name and address, or
(B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of
its trade or business (a "financial institution"), and holds the capital
security in such capacity, certifies to Citigroup Capital or its agent,
under penalties of perjury, that such statement has been received from
the beneficial owner by it or by a financial institution holding such
security for the beneficial owner and furnishes Citigroup Capital or its
agent with a copy thereof; and
(2) a Non-United States Holder of a capital security will not be subject to
United States federal withholding tax on any gain realized upon the sale or
other disposition of a capital security.
INFORMATION REPORTING TO HOLDERS
Generally, income on the capital securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of capital securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the capital securities may
be subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification requirements. Any withheld amounts will be allowed as a
credit against the holder's United States federal income tax, provided the
required information is provided to the IRS on a timely basis.
The United States Treasury Department recently issued final regulations
governing information reporting and the certification procedures regarding
withholding and backup withholding on certain amounts paid to Non-United States
Holders after December 31, 1999. The new Treasury regulations would alter the
procedures for claiming the benefits of an income tax treaty and may change the
certification procedures relating to the receipt by intermediaries of payments
on behalf of a beneficial owner of a junior subordinated debt security. Holders
of capital securities should consult their tax advisors concerning the effect,
if any, of such new Treasury regulations on an investment in the capital
securities.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
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ERISA CONSIDERATIONS
A fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), (an "ERISA Plan") should consider the fiduciary standards of ERISA in
the context of the ERISA Plan's particular circumstances before authorizing an
investment in the capital securities of Citigroup Capital. Among other factors,
the fiduciary should consider whether such an investment is in accordance with
the documents governing the ERISA Plan and whether the investment is appropriate
for the ERISA Plan in view of its overall investment policy and diversification
of its portfolio.
Certain provisions of ERISA and the Code prohibit ERISA Plans, as well as
individual retirement accounts and Keogh plans subject to section 4975 of the
Code (collectively, "Plans"), from engaging in certain transactions involving
"plan assets" with parties that are "parties in interest" under ERISA or
"disqualified persons" under the Code with respect to the Plan. The U.S.
Department of Labor has issued a final regulation (the "Regulation") with regard
to whether the underlying assets of an entity in which employee benefit plans
acquire equity interests are deemed to be plan assets.
Under such Regulation, for purposes of ERISA and section 4975 of the Code,
the assets of Citigroup Capital would be deemed to be "plan assets" of a Plan
whose assets were used to purchase capital securities of Citigroup Capital if
the capital securities of Citigroup Capital were considered to be equity
interests in Citigroup Capital and no exception to plan asset status were
applicable under the Regulation.
If the assets of Citigroup Capital were deemed to be plan assets of Plans
that are holders of the capital securities of Citigroup Capital, a Plan's
investment in the capital securities of Citigroup Capital might be deemed to
constitute a delegation under ERISA of the duty to manage plan assets by a
fiduciary investing in capital securities of Citigroup Capital. Also, Citigroup
might be considered a "party in interest" or "disqualified person" with respect
to Plans whose assets were used to purchase capital securities of Citigroup
Capital. If this were the case, an investment in capital securities of Citigroup
Capital by a Plan might constitute, or in the course of the operation of
Citigroup Capital give rise to, a prohibited transaction under ERISA or the
Code. In particular, it is likely that under such circumstances a prohibited
extension of credit to Citigroup would be considered to occur under ERISA and
the Code.
In addition, Citigroup might be considered a "party in interest" or
"disqualified person" with respect to certain Plans for reasons unrelated to the
operation of Citigroup Capital, E.G., because of the provision of services by
Citigroup or an affiliate to the Plan. A purchase of capital securities of
Citigroup Capital by any such Plan would be likely to result in a prohibited
extension of credit to Citigroup, without regard to whether the assets of
Citigroup Capital constituted plan assets.
Because of the possibility that a prohibited extension of credit could occur
as a result of the purchase or holding of the capital securities of Citigroup
Capital by a Plan, the capital securities of Citigroup Capital may be not
purchased or held by any Plan or any person investing "plan assets" of any Plan,
unless such purchaser or holder is eligible for the exemptive relief available
under Prohibited Transaction Class Exemption ("PTCE") 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transaction involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company separate accounts), or PTCE
84-14 (for certain transactions determined by independent qualified asset
managers). Any purchaser of the capital securities of Citigroup Capital or any
interest therein will be deemed to have represented to Citigroup Capital that
either (a) it is not a Plan and is not purchasing such securities (or interest
therein) on behalf of or with "plan assets" of any Plan or (b) its purchase and
holding of the capital securities of Citigroup Capital (or interest therein) is
eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1
or 84-14.
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Due to the complexity of these rules and the penalties imposed upon persons
involved in prohibited transactions, it is important that any person considering
the purchase of capital securities of Citigroup Capital with Plan assets consult
with its counsel regarding the consequences under ERISA and the Code of the
acquisition and ownership of capital securities of Citigroup Capital and the
availability of exemptive relief under the class exemptions listed above. In
JOHN HANCOCK MUTUAL LIFE INSURANCE CO. V. HARRIS TRUST AND SAVINGS BANK, 114
S.Ct. 517 (1993), the Supreme Court ruled that assets held in an insurance
company's general account may be deemed to be "plan assets" for ERISA purposes
under certain circumstances. The issues raised in HARRIS TRUST have also been
the subject of legislative action, and have been addressed in proposed
regulations issued by the U.S. Department of Labor in December 1997.
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UNDERWRITING
Under the terms and subject to the conditions of the underwriting agreement
dated , each underwriter named below has severally agreed to
purchase from Citigroup Capital, and Citigroup Capital has agreed to sell to
such underwriter, the number of capital securities set forth opposite the name
of such underwriter below.
<TABLE>
<CAPTION>
NUMBER OF
CAPITAL
UNDERWRITERS SECURITIES
- -------------------------------------------------------------------------------- ------------
<S> <C>
------------
Total
------------
------------
</TABLE>
The underwriters are obligated to take and pay for the total number of
capital securities offered hereby if any such capital securities are purchased.
In the event of default by any underwriter, the underwriting agreement provides
that, in certain circumstances, purchase commitments of the non-defaulting
underwriters may be increased or the underwriting agreement may be terminated.
Underwriters, dealers and agents may be entitled, under agreements with
Citigroup Capital and Citigroup, to indemnification by Citigroup 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, Citigroup Capital and Citigroup and affiliates of Citigroup
Capital and Citigroup in the ordinary course of business.
Citigroup Capital and Citigroup have agreed, during the period beginning on
the date of the underwriting agreement and continuing to and including the date
that is days after the closing date for the purchase of the capital
securities, not to offer, sell, contract to sell or otherwise dispose of any
preferred securities, any preferred stock or any other securities, including any
backup undertakings of such preferred stock or other securities, of Citigroup or
of Citigroup Capital, in each case that are substantially similar to the capital
securities, or any securities convertible into or exchangeable for the capital
securities or such substantially similar securities of either Citigroup Capital
or Citigroup, except securities in the offering or with the prior written
consent of .
In view of the fact that the proceeds of the sale of the capital securities
will ultimately be used to purchase the junior subordinated debt securities of
Citigroup, the underwriting agreement provides that Citigroup will pay as
compensation to the underwriters $ per capital security for the accounts of
the several underwriters ($ in the aggregate). However, such compensation
will be $ per capital security for sales of 10,000 or more capital
securities to a single purchaser. Therefore, to the extent of such sales, the
actual amount of underwriters' compensation will be less than the aggregate
amount specified in the preceding sentence.
The underwriters propose to offer the capital securities, in part, directly
to the public at the initial public offering price set forth on the cover page
of this prospectus. The underwriters may also offer the capital securities to
certain dealers at a price that represents a concession not in excess of
$ , provided that such concession for sales of 10,000 or more capital
securities to a single purchaser will not be in excess of $ per capital
security. The underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per capital security to certain brokers and dealers.
After the capital securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
representatives of the underwriters.
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Application will be made to list the capital securities on the NYSE. If
approved for listing, Citigroup expects the capital securities will begin
trading on the NYSE within 30 days after they are first issued.
The broker-dealer subsidiaries of Citigroup are members of the National
Association of Securities Dealers, Inc. (the "NASD") and may participate in
distributions of the capital securities. Accordingly, offerings of capital
securities in which Citigroup's broker-dealer subsidiaries participate will
conform with the requirements set forth in Rule 2720 of the Conduct Rules of the
NASD.
In connection with this offering and in accordance with applicable law and
industry practice, the underwriters may over-allot or effect transactions that
stabilize, maintain or otherwise affect the market price of the capital
securities at levels above those that might otherwise 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 capital 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. The underwriters are
not required to engage in any of these activities, or continue such activities
if commenced.
If any broker-dealer subsidiary makes an offering of the capital securities,
such offering will be conducted pursuant to the applicable sections of Rule 2810
of the Conduct Rules of the NASD. The underwriters may not confirm sales to any
discretionary account without the prior specific written approval of a customer.
This prospectus may also be used by any broker-dealer subsidiary of
Citigroup in connection with offers and sales of the capital securities in
market-making transactions at negotiated prices related to prevailing market
prices at the time of sale. Any of Citigroup's broker-dealer subsidiaries may
act as principal or agent in such transactions. None of Citigroup's
broker-dealer subsidiaries have any obligation to make a market in any of the
capital securities and may discontinue any market-making activities at any time
without notice, at their sole discretion.
LEGAL MATTERS
The validity of the capital securities, the junior subordinated debt
securities, the guarantee and certain matters relating thereto and certain
United States federal income tax matters will be passed upon for Citigroup and
Citigroup Capital by Skadden, Arps, New York, New York. Certain legal matters
will be passed upon for the underwriters by Dewey Ballantine LLP, New York, New
York. Kenneth J. Bialkin, a partner of Skadden, Arps, is a director of Citigroup
and he and other attorneys in such firm beneficially own an aggregate of less
than 1% of the common stock of Citigroup. Dewey Ballantine LLP has from time to
time acted as counsel for Citigroup 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 an aggregate of less than 1% of Citigroup's common
stock.
EXPERTS
The consolidated financial statements and schedules of Travelers Group Inc.
("Travelers") as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997, incorporated by reference or included
in Travelers' Annual Report on Form 10-K, as amended, for the year ended
December 31, 1997, and incorporated by reference herein, have been audited by
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KPMG LLP, independent certified public accountants, as set forth in their
reports thereon (also incorporated by reference herein). Those reports state
that KPMG 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 Travelers referred to above are incorporated by
reference herein in reliance upon such reports and upon the authority of said
firms as experts in accounting and auditing.
The consolidated financial statements of Citicorp and its 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 1997 Citicorp Annual Report and Form 10-K, have been incorporated by
reference herein, in reliance upon the report (also incorporated by reference
herein) of KPMG LLP, independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing.
The supplemental consolidated financial statements and schedule of Citigroup
as of December 31, 1997 and 1996, and for each of the years in the three-year
period ended December 31, 1997, included in Citigroup's Current Report on Form
8-K dated October 26, 1998, have been audited by KPMG LLP, independent certified
public accountants, as set forth in their report thereon, included therein and
incorporated herein by reference. This report states that KPMG LLP did not audit
the Salomon Financials and that their opinion with respect to any amounts
derived from the Salomon Financials is based on the report of Arthur Andersen
LLP. Generally accepted accounting principles proscribe giving effect to a
consummated business combination accounted for by the pooling of interests
method in financial statements that do not include the date of consummation. The
supplemental consolidated financial statements do not extend through the date of
consummation. However, they will become the historical consolidated financial
statements of Citigroup after financial statements covering the date of
consummation of the business combination are issued. The supplemental
consolidated financial statements referred to above are incorporated by
reference herein in reliance upon such reports and upon the authority of said
firms as experts in accounting and auditing. To the extent that KPMG LLP audits
and reports on consolidated financial statements of Citigroup issued at future
dates, and consents to the use of their report thereon, such consolidated
financial statements also will be incorporated by reference in the registration
statement in reliance upon their report and said authority.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
As required by the Securities Act of 1933, Citigroup filed a registration
statement relating to the securities offered by this prospectus with the SEC.
This prospectus is a part of that registration statement, which includes
additional information.
Citigroup files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document Citigroup
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can also request copies of the documents, upon
payment of a duplicating fee, by writing the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. These SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov.
The SEC allows Citigroup to "incorporate by reference" the information it
files with the SEC, which means that Citigroup can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus.
Information that Citigroup files later with the SEC will automatically update
information in this prospectus. In all cases you should rely on the later
information over different information included in this prospectus.
47
<PAGE>
Citigroup incorporates by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the
Exchange Act:
(a) Annual Report on Form 10-K for the year ended December 31, 1997, as amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998, June
30, 1998 and September 30, 1998; and
(c) Current Reports on Form 8-K dated January 6, 1998, January 26, 1998,
February 17, 1998, April 6, 1998, April 8, 1998, April 20, 1998, June 1,
1998, July 20, 1998, August 18, 1998, August 31, 1998, October 8, 1998,
October 21, 1998, October 26, 1998, October 29, 1998, November 1, 1998,
November 13, 1998 and December 15, 1998.
All documents Citigroup files pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the later of
(1) the completion of the offering of the securities described in this
prospectus and (2) the date the broker-dealer subsidiaries of Citigroup stop
offering securities pursuant to this prospectus shall be incorporated by
reference in this prospectus from the date of filing of such documents.
You may request a copy of these filings, at no cost, by writing or
telephoning Citigroup at the following address: Treasurer
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
212-559-1000
You should rely only on the information provided in this prospectus, as well
as the information incorporated by reference. Citigroup has not authorized
anyone to provide you with different information. Citigroup is not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any documents
incorporated by reference is accurate as of any date other than the date on the
front of the applicable document.
48
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securities
CITIGROUP CAPITAL
% CAPITAL SECURITIES
$ LIQUIDATION AMOUNT
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CITIGROUP INC.
[LOGO]
-------
PROSPECTUS
---------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the
Registrants in connection with the Securities being registered hereby. All of
the fees set forth below are estimates except for the Commission Registration
fee and the NASD fee.
<TABLE>
<S> <C>
Commission Registration Fee...................................... $1,153,700.00
Accounting Fees.................................................. 150,000.00
Trustees' Fees and Expenses...................................... 75,000.00
Blue Sky Fees and Expenses....................................... 40,000.00
Printing and Engraving Fees...................................... 500,000.00
Rating Agency Fees............................................... 2,000,000.00
NASD Fee......................................................... 30,500.00
Legal Fees and Expenses.......................................... 500,000.00
Stock Exchange Listing Fees...................................... 254,300.00
Miscellaneous.................................................... 6,500.00
-------------
Total........................................................ $4,710,000.00
-------------
-------------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL") empowers a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and (b)
of Section 145, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification
II-1
<PAGE>
provided for by Section 145 shall, unless otherwise provided when authorized and
ratified, continue as to such person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of such person's heirs,
executors and administrators; and empowers the corporation to purchase and
maintain insurance on behalf of a director or officer of the corporation against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145. Section Four
of Article IV of Citigroup's By-Laws provides that Citigroup shall indemnify its
directors and officers to the fullest extent permitted by the DGCL.
Citigroup also provides liability insurance for its directors and officers
which provides for coverage against loss from claims made against directors and
officers in their capacity as such, including, subject to certain exceptions,
liabilities under the federal securities laws.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from
which the director derived an improper personal benefit. Article Tenth of
Citigroup's Restated Certificate of Incorporation limits the liability of
directors to the fullest extent permitted by Section 102(b)(7).
The Declaration of each of the Citigroup Trusts provides that no
Institutional Trustee or any of its affiliates, Delaware Trustee or any of its
affiliates, or officer, director, shareholder, member, partner, employee,
representative custodian, nominee or agent of the Institutional Trustee or the
Delaware Trustee (each a "Fiduciary Indemnified Person"), and no Regular
Trustee, affiliate of any Regular Trustee, or any officer, director,
shareholder, member, partner, employee, representative or agent of any Regular
Trustee, or any employee or agent of such Citigroup Trust or its affiliates
(each a "Company Indemnified Person") shall be liable, responsible or
accountable in damages or otherwise to such Citigroup Trust, any affiliate of
such Citigroup Trust or any holder of securities issued by such Citigroup Trust,
or to any officer, director, shareholder, partner, member, representative,
employee or agent of such Citigroup Trust or its Affiliates for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Fiduciary Indemnified Person or Company Indemnified Person in good faith on
behalf of such Citigroup Trust and in a manner such Fiduciary Indemnified Person
or Company Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Fiduciary Indemnified Person or Company Indemnified
Person by such Declaration or by law, except that a Fiduciary Indemnified Person
or Company Indemnified Person shall be liable for any loss, damage, or claim
incurred by reason of such Fiduciary Indemnified Person's or Company Indemnified
Person's gross negligence (or in the case of a Fiduciary Indemnified Person,
negligence) or willful misconduct with respect to such acts or omissions. The
Declaration of each Citigroup Trust also provides that, to the full extent
permitted by law, Citigroup shall indemnify any Company Indemnified Person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in right of such Citigroup Trust)
by reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Citigroup Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Declaration of each
Citigroup Trust also provides that to the full extent permitted by law,
Citigroup shall indemnify any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in right of such Citigroup Trust to procure a judgment in
its favor by reason of the
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<PAGE>
fact that he is or was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Citigroup Trust and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Citigroup Trust unless and only to the
extent that the Court of Chancery of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem proper. The Declaration of
each Citigroup Trust further provides that expenses (including attorneys' fees)
incurred by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to in the
immediately preceding two sentences shall be paid by Citigroup in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by Citigroup as authorized in the Declaration.
The directors and officers of Citigroup and the Regular Trustee are covered
by insurance policies indemnifying them against certain liabilities, including
certain liabilities arising under the Securities Act, which might be incurred by
them in such capacities and against which they cannot be indemnified by
Citigroup or the Citigroup Trusts. Any agents, dealers or underwriters who
execute any underwriting or distribution agreement relating to securities
offered pursuant to this Registration Statement will agree to indemnify
Citigroup's directors and their officers and the Citigroup Trustees who signed
the Registration Statement against certain liabilities that may arise under the
Securities Act with respect to information furnished to Citigroup or any of the
Citigroup Trusts by or on behalf of such indemnifying party.
For the undertaking with respect to indemnification, see Item 17 herein.
See the forms of Underwriting Agreements and the form of Distribution
Agreement filed or to be filed as Exhibits 1.01, 1.02, 1.03, 1.04, 1.05 and 1.06
for certain indemnification provisions.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
1.01 -- Underwriting Agreement Basic Provisions, dated January 12, 1993 relating to Debt Securities
(incorporated by reference to Exhibit 1.01 to Amendment No. 1 to Citigroup's Registration
Statement on Form S-3 (No. 33-55542)).
1.02 -- Form of Underwriting Agreement for Index Warrants will be filed as an Exhibit to a Current Report
on Form 8-K and incorporated herein by reference.
1.03 -- Form of Underwriting Agreement for Preferred Stock (incorporated by reference to Exhibit 1.2 to
Citigroup's Registration Statement on Form S-3 (No. 333-27155)).
1.04 -- Form of Distribution Agreement relating to Citigroup's Medium-Term Senior Notes, Series A, and
Medium-Term Subordinated Notes, Series A.+
1.05 -- Form of Underwriting Agreement for Capital Securities.+
1.06 -- Form of Underwriting Agreement for Common Stock will be filed as an Exhibit to a Current Report
on Form 8-K and incorporated herein by reference.
4.01 -- Restated Certificate of Incorporation of Citigroup.+
4.02 -- By-Laws of Citigroup effective October 8, 1998 (incorporated by reference to Exhibit 3.02 to
Citigroup's Quarterly Report on Form 10-Q dated September 30, 1998).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
4.03 -- Indenture, dated as of March 15, 1987, between Primerica Corporation, a New Jersey corporation,
and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.01 to Citigroup's
Registration Statement on Form S-3 (No. 33-55542)).
4.04 -- First Supplemental Indenture, dated as of December 15, 1988, among Primerica Corporation,
Primerica Holdings, Inc. and The Bank of New York, as trustee (incorporated by reference to
Exhibit 4.02 to Citigroup's Registration Statement on Form S-3 (No. 33-55542)).
4.05 -- Second Supplemental Indenture, dated as of January 31, 1991, between Primerica Holdings, Inc. and
The Bank of New York, as trustee (incorporated by reference to Exhibit 4.03 to Citigroup's
Registration Statement on Form S-3 (No. 33-55542)).
4.06 -- Third Supplemental Indenture, dated as of December 9, 1992, among Primerica Holdings, Inc.,
Primerica Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit
5 to Citigroup's Form 8-A dated December 21, 1992, with respect to Citigroup's 7 3/4% Notes Due
June 15, 1999 (No. 1-9924)).
4.07 -- Fourth Supplemental Indenture, dated as of November 2, 1998, between Citigroup and The Bank of
New York, as trustee (incorporated by reference to Exhibit 4.01 to Citigroup's Quarterly Report
on Form 10-Q dated September 30, 1998).
4.08 -- Indenture, dated as of July 17, 1998, between Citigroup and The First National Bank of Chicago,
as trustee (incorporated by reference to Exhibit 4.05 to Citigroup's Registration Statement on
Form S-3 (No. 333-51201)).
4.09 -- First Supplemental Indenture, dated as of December 15, 1998 between Citigroup and The First
National Bank of Chicago, as trustee.+
4.10 -- Form of proposed Index Warrant Agreement for Index Warrants, with form of proposed Index Warrant
Certificate attached as an exhibit thereto, will be filed as an Exhibit to a Current Report on
Form 8-K and incorporated herein by reference.
4.11 -- Form of Certificate for Preferred Stock will be filed as an exhibit to a Current Report on Form
8-K and incorporated herein by reference.
4.12 -- Form of Deposit Agreement (incorporated by reference to Exhibit 4.17 to Citigroup's Registration
Statement on Form S-3 (No. 333-27155)).
4.13 -- Form of Depositary Receipt (included in Exhibit 4.12).
4.14 -- Forms of Medium-Term Senior Notes, Series A and Medium-Term Subordinated Notes, Series A.+
4.15 -- Certificate of Trust of Citigroup Capital VI, as amended.+
4.16 -- Certificate of Trust of Citigroup Capital VII, as amended.+
4.17 -- Certificate of Trust of Citigroup Capital VIII, as amended.+
4.18 -- Certificate of Trust of Citigroup Capital IX.+
4.19 -- Certificate of Trust of Citigroup Capital X.+
4.20 -- Certificate of Trust of Citigroup Capital XI.+
4.21 -- Certificate of Trust of Citigroup Capital XII.+
4.22 -- Certificate of Trust of Citigroup Capital XIII.+
4.23 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VI.+
4.24 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VII.+
4.25 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VIII.+
4.26 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital IX.+
4.27 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital X.+
4.28 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XI.+
4.29 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XII.+
4.30 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XIII.+
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
4.31 -- Form of Indenture between the Company and The Chase Manhattan Bank, as trustee (incorporated by
reference to Exhibit 4.11 to Citigroup's Registration Statement on Form S-3 (No. 333-12439)).
4.32 -- First Supplemental Indenture, dated as of December 15, 1998, between Citigroup and The Chase
Manhattan Bank, as trustee.+
4.33 -- Forms of Capital Security for each of the Trusts (included in Exhibits 4.23-4.30).
4.34 -- Forms of Common Security for each of the Trusts (included in Exhibits 4.23-4.30).
4.35 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital VI (incorporated by
reference to Exhibit 4.14 to Citigroup's Registration Statement on Form S-3 (No. 333-27155)).
4.36 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital VII (incorporated
by reference to Exhibit 4.15 to Citigroup's Registration Statement on Form S-3 (No. 333-27155)).
4.37 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital VIII.+
4.38 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital IX.+
4.39 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital X.+
4.40 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XI.+
4.41 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XII.+
4.42 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XIII.+
4.43 -- Form of Junior Subordinated Debt Securities (included in Exhibit 4.31).
4.44 -- Second Supplemental Indenture, dated as of January 21, 1999, between Citigroup and The First
National Bank of Chicago, as trustee.*
4.45 -- Certificate of Designation of 5.321% Cumulative Preferred Stock, Series YY, of Citigroup.*
5.01 -- Opinion of Stephanie B. Mudick, Esq.+
5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with respect to the Capital Securities and
Preferred Stock.+
12.01 -- Supplemental Calculation of Ratio of Income to Fixed Charges and Supplemental Calculation of
Ratio of Income to Combined Fixed Charges Including Preferred Stock Dividends (incorporated by
reference to Exhibit 12.01 to Citigroup's Current Report on Form 8-K dated November 13, 1998).
23.01 -- Consent of KPMG LLP, independent public accountants.*
23.02 -- Consent of KPMG LLP, independent public accountants.*
23.03 -- Consent of KPMG LLP, independent public accountants.*
23.04 -- Consent of Arthur Andersen LLP, independent public accountants.*
23.05 -- Consent of Stephanie B. Mudick, Esq. (included in Exhibit 5.01).
23.06 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.02).
24.01 -- Powers of Attorney of certain Directors.+
25.01 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Indenture dated as of March 15, 1987, as
supplemented.+
25.02 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee under the Indenture dated as of July
17, 1998, as supplemented.+
25.03 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital VI.+
25.04 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital VII.+
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
25.05 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital VIII.+
25.06 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital IX.+
25.07 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital X.+
25.08 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Citigroup Capital XI.+
25.09 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Citigroup Capital XII.+
25.10 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Citigroup Capital XIII.+
25.11 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Indenture dated as of October 7, 1996, as supplemented.+
25.12 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital VI.+
25.13 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Preferred Capital Securities of Citigroup Capital VII.+
25.14 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital VIII.+
25.15 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital IX.+
25.16 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital X.+
25.17 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XI.+
25.18 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XII.+
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
25.19 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XIII.+
</TABLE>
- ------------------------
* Filed herewith.
+ Filed previously.
ITEM 17. UNDERTAKINGS.
Each of Citigroup Inc., Citigroup Capital VI, Citigroup Capital VII,
Citigroup Capital VIII, Citigroup Capital IX, Citigroup Capital X, Citigroup
Capital XI, Citigroup Capital XII and Citigroup Capital XIII hereby undertakes:
(A)(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment hereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
PROVIDED, HOWEVER, that the undertakings set forth in clauses (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic
reports filed with or furnished to the Securities and Exchange Commission
by Citigroup Inc. pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(B) That, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing of Citigroup Inc.'s annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934, as amended, that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers
and controlling persons of any such registrants pursuant to the provisions
described under Item 15 above, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is
II-7
<PAGE>
against public policy as expressed in such Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the registrants in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered hereby, the registrants will, unless in the
opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such issue.
(D)(1) For purposes of determining any liability under the Securities
Act of 1933, as amended, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended,
shall be deemed to be part of this registration statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Citigroup Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement or Amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of New York, State of New
York, this 22nd day of January, 1999.
<TABLE>
<S> <C> <C>
CITIGROUP INC.
By: /s/ HEIDI G. MILLER
-----------------------------------------
Heidi G. Miller
Chief Financial Officer
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED THIS 22ND DAY OF JANUARY, 1999.
<TABLE>
<CAPTION>
SIGNATURES
- --------------------------------------------------------
<C> <S>
/s/ JOHN S. REED Chairman of the Board, Co-Chief Executive Officer
-------------------------------------------- (Principal Executive Officer) and Director
John S. Reed
/s/ SANFORD I. WEILL Chairman of the Board, Co-Chief Executive Officer
-------------------------------------------- (Principal Executive Officer) and Director
Sanford I. Weill
/s/ HEIDI G. MILLER Chief Financial Officer
-------------------------------------------- (Principal Financial Officer)
Heidi G. Miller
/s/ IRWIN ETTINGER Chief Accounting Officer
-------------------------------------------- (Principal Accounting Officer)
Irwin Ettinger
/s/ ROGER W. TRUPIN Controller (Principal Accounting Officer)
--------------------------------------------
Roger W. Trupin
* Director
--------------------------------------------
C. Michael Armstrong
* Director
--------------------------------------------
Alain J.P. Belda
* Director
--------------------------------------------
Kenneth J. Bialkin
* Director
--------------------------------------------
Kenneth T. Derr
* Director
--------------------------------------------
John M. Deutch
* Director
--------------------------------------------
Ann Dibble Jordan
</TABLE>
II-9
<PAGE>
<TABLE>
<C> <S>
* Director
--------------------------------------------
Reuben Mark
* Director
--------------------------------------------
Michael T. Masin
* Director
--------------------------------------------
Dudley C. Mecum
* Director
--------------------------------------------
Richard D. Parsons
* Director
--------------------------------------------
Andrall E. Pearson
* Director
--------------------------------------------
Robert B. Shapiro
* Director
--------------------------------------------
Franklin A. Thomas
* Director
--------------------------------------------
Edgar S. Woolard
* Director
--------------------------------------------
Arthur Zankel
</TABLE>
<TABLE>
<S> <C>
*By: /s/ HEIDI G. MILLER
----------------------------------------
Heidi G. Miller
Attorney-in-Fact
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, each
of Citigroup Capital VI, Citigroup Capital VII, Citigroup Capital VIII,
Citigroup Capital IX, Citigroup Capital X, Citigroup Capital XI, Citigroup
Capital XII and Citigroup Capital XIII certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement or Amendment thereto to be signed on its
behalf by the undersigned, thereunto duly authorized, in The City of New York,
State of New York, this 22nd day of January, 1999.
<TABLE>
<S> <C> <C>
CITIGROUP CAPITAL VI
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL VII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL VIII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL IX
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
</TABLE>
II-11
<PAGE>
<TABLE>
<S> <C> <C>
CITIGROUP CAPITAL X
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL XI
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL XII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
CITIGROUP CAPITAL XIII
By: /s/ ROBERT MATZA
-----------------------------------------
Robert Matza, as Trustee
By: /s/ IRWIN ETTINGER
-----------------------------------------
Irwin Ettinger, as Trustee
</TABLE>
II-12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
1.01 -- Underwriting Agreement Basic Provisions, dated January 12, 1993 relating to Debt Securities
(incorporated by reference to Exhibit 1.01 to Amendment No. 1 to Citigroup's Registration
Statement on Form S-3 (No. 33-55542)).
1.02 -- Form of Underwriting Agreement for Index Warrants will be filed as an Exhibit to a Current Report
on Form 8-K and incorporated herein by reference.
1.03 -- Form of Underwriting Agreement for Preferred Stock (incorporated by reference to Exhibit 1.2 to
Citigroup's Registration Statement on Form S-3 (No. 333-27155)).
1.04 -- Form of Distribution Agreement relating to Citigroup's Medium-Term Senior Notes, Series A, and
Medium-Term Subordinated Notes, Series A.+
1.05 -- Form of Underwriting Agreement for Capital Securities.+
1.06 -- Form of Underwriting Agreement for Common Stock will be filed as an Exhibit to a Current Report
on Form 8-K and incorporated herein by reference.
4.01 -- Restated Certificate of Incorporation of Citigroup.+
4.02 -- By-Laws of Citigroup effective October 8, 1998 (incorporated by reference to Exhibit 3.02 to
Citigroup's Quarterly Report on Form 10-Q dated September 30, 1998).
4.03 -- Indenture, dated as of March 15, 1987, between Primerica Corporation, a New Jersey corporation,
and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.01 to Citigroup's
Registration Statement on Form S-3 (No. 33-55542)).
4.04 -- First Supplemental Indenture, dated as of December 15, 1988, among Primerica Corporation,
Primerica Holdings, Inc. and The Bank of New York, as trustee (incorporated by reference to
Exhibit 4.02 to Citigroup's Registration Statement on Form S-3 (No. 33-55542)).
4.05 -- Second Supplemental Indenture, dated as of January 31, 1991, between Primerica Holdings, Inc. and
The Bank of New York, as trustee (incorporated by reference to Exhibit 4.03 to Citigroup's
Registration Statement on Form S-3 (No. 33-55542)).
4.06 -- Third Supplemental Indenture, dated as of December 9, 1992, among Primerica Holdings, Inc.,
Primerica Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit
5 to Citigroup's Form 8-A dated December 21, 1992, with respect to Citigroup's 7 3/4% Notes Due
June 15, 1999 (No. 1-9924)).
4.07 -- Fourth Supplemental Indenture, dated as of November 2, 1998, between Citigroup and The Bank of
New York, as trustee (incorporated by reference to Exhibit 4.01 to Citigroup's Quarterly Report
on Form 10-Q dated September 30, 1998).
4.08 -- Indenture, dated as of July 17, 1998, between Citigroup and The First National Bank of Chicago,
as trustee (incorporated by reference to Exhibit 4.05 to Citigroup's Registration Statement on
Form S-3 (No. 333-51201)).
4.09 -- First Supplemental Indenture, dated as of December 15, 1998 between Citigroup and The First
National Bank of Chicago, as trustee.+
4.10 -- Form of proposed Index Warrant Agreement for Index Warrants, with form of proposed Index Warrant
Certificate attached as an exhibit thereto, will be filed as an Exhibit to a Current Report on
Form 8-K and incorporated herein by reference.
4.11 -- Form of Certificate for Preferred Stock will be filed as an exhibit to a Current Report on Form
8-K and incorporated herein by reference.
4.12 -- Form of Deposit Agreement (incorporated by reference to Exhibit 4.17 to Citigroup's Registration
Statement on Form S-3 (No. 333-27155)).
4.13 -- Form of Depositary Receipt (included in Exhibit 4.12).
4.14 -- Forms of Medium-Term Senior Notes, Series A and Medium-Term Subordinated Notes, Series A.+
4.15 -- Certificate of Trust of Citigroup Capital VI, as amended.+
4.16 -- Certificate of Trust of Citigroup Capital VII, as amended.+
4.17 -- Certificate of Trust of Citigroup Capital VIII, as amended.+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
4.18 -- Certificate of Trust of Citigroup Capital IX.+
4.19 -- Certificate of Trust of Citigroup Capital X.+
4.20 -- Certificate of Trust of Citigroup Capital XI.+
4.21 -- Certificate of Trust of Citigroup Capital XII.+
4.22 -- Certificate of Trust of Citigroup Capital XIII.+
4.23 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VI.+
4.24 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VII.+
4.25 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital VIII.+
4.26 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital IX.+
4.27 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital X.+
4.28 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XI.+
4.29 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XII.+
4.30 -- Form of Amended and Restated Declaration of Trust for Citigroup Capital XIII.+
4.31 -- Form of Indenture between the Company and The Chase Manhattan Bank, as trustee (incorporated by
reference to Exhibit 4.11 to Citigroup's Registration Statement on Form S-3 (No. 333-12439)).
4.32 -- First Supplemental Indenture, dated as of December 15, 1998, between Citigroup and The Chase
Manhattan Bank, as trustee.+
4.33 -- Forms of Capital Security for each of the Trusts (included in Exhibits 4.23-4.30).
4.34 -- Forms of Common Security for each of the Trusts (included in Exhibits 4.23-4.30).
4.35 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital VI (incorporated by
reference to Exhibit 4.14 to Citigroup's Registration Statement on Form S-3 (No. 333-27155)).
4.36 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital VII (incorporated
by reference to Exhibit 4.15 to Citigroup's Registration Statement on Form S-3 (No. 333-27155)).
4.37 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital VIII.+
4.38 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital IX.+
4.39 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital X.+
4.40 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XI.+
4.41 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XII.+
4.42 -- Form of Guarantee with respect to the Capital Securities of Citigroup Capital XIII.+
4.43 -- Form of Junior Subordinated Debt Securities (included in Exhibit 4.31).
4.44 -- Second Supplemental Indenture, dated as of January 21, 1999, between Citigroup and The First
National Bank of Chicago, as trustee.*
4.45 -- Certificate of Designation of 5.321% Cumulative Preferred Stock, Series YY, of Citigroup.*
5.01 -- Opinion of Stephanie B. Mudick, Esq.+
5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with respect to the Capital Securities and
Preferred Stock.+
12.01 -- Supplemental Calculation of Ratio of Income to Fixed Charges and Supplemental Calculation of
Ratio of Income to Combined Fixed Charges Including Preferred Stock Dividends (incorporated by
reference to Exhibit 12.01 to Citigroup's Current Report on Form 8-K dated November 13, 1998).
23.01 -- Consent of KPMG LLP, independent public accountants.*
23.02 -- Consent of KPMG LLP, independent public accountants.*
23.03 -- Consent of KPMG LLP, independent public accountants.*
23.04 -- Consent of Arthur Andersen LLP, independent public accountants.*
23.05 -- Consent of Stephanie B. Mudick, Esq. (included in Exhibit 5.01).
23.06 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.02).
24.01 -- Powers of Attorney of certain Directors.+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
25.01 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Indenture dated as of March 15, 1987, as
supplemented.+
25.02 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee under the Indenture dated as of July
17, 1998, as supplemented.+
25.03 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital VI.+
25.04 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital VII.+
25.05 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital VIII.+
25.06 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital IX.+
25.07 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as trustee under the Declaration of Trust of Citigroup Capital X.+
25.08 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Citigroup Capital XI.+
25.09 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Citigroup Capital XII.+
25.10 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Citigroup Capital XIII.+
25.11 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Indenture dated as of October 7, 1996, as supplemented.+
25.12 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital VI.+
25.13 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Preferred Capital Securities of Citigroup Capital VII.+
25.14 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital VIII.+
25.15 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital IX.+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
25.16 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital X.+
25.17 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XI.+
25.18 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XII.+
25.19 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Capital Securities Guarantee of Citigroup Inc. for
the benefit of holders of Capital Securities of Citigroup Capital XIII.+
</TABLE>
- ------------------------
* Filed herewith.
+ Filed previously.
<PAGE>
Exhibit 4.44
CITIGROUP INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
SECOND SUPPLEMENTAL INDENTURE
Dated as of January 21, 1999
Supplemental to Indenture dated as of July 17, 1998
providing for the issuance of
Subordinated Debt Securities
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of January 21, 1999 (the
"Second Supplemental Indenture"), between Citigroup Inc. (formerly Travelers
Group Inc.), a Delaware corporation (the "Company"), and The First National Bank
of Chicago, a banking association organized and existing under the laws of the
United States, as trustee (the "Trustee"), under the Indenture dated as of July
17, 1998, as supplemented by the First Supplemental Indenture, dated as of
December 15, 1998 (as supplemented, the "Indenture").
WHEREAS, pursuant to Section 13.01(h) of the Indenture, the Company and
the Trustee may enter into a supplemental indenture to cure any ambiguity, to
correct or supplement any provision in the Indenture which may be inconsistent
with any other provision therein, or to make any other provisions with respect
to matters or questions arising under the Indenture, provided such action shall
not adversely affect the interests of the holders of Securities of any series in
any material respect;
WHEREAS, the Company and the Trustee desire to enter into this Second
Supplemental Indenture;
NOW, THEREFORE, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of all of the present and future holders of
the Securities as follows:
ARTICLE ONE
MODIFICATIONS
Section 1.1. The definition of Officers' Certificate contained in
Section 1.02 of the Indenture shall be amended by deleting "the Chairman, any
Vice Chairman, the President or any Vice President" and substituting therefor:
"either Chairman, the Vice Chairman, the Chief Financial Officer, the Chief
Accounting Officer, either Co-General Counsel or any Vice President".
Section 1.2. Section 2.03 shall be amended by deleting "its Chairman,
any Vice Chairman, its President or any Vice President" in the second and third
line and substituting therefor: "either Chairman, the Vice Chairman, the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, or any Vice
President".
Section 1.3. Section 3.01 shall be amended by deleting "its Chairman,
any Vice Chairman, its President or any Vice President" in the first paragraph
and substituting therefor: "either Chairman, the Chief Financial Officer, the
Chief Accounting Officer, the Treasurer, any Deputy Treasurer, any Assistant
Treasurer, either Co-General Counsel or any Vice President".
Section 1.4. Section 4.04 shall be amended by deleting "its Chairman,
any Vice Chairman, its President" and substituting therefor: "either Chairman,
the Chief Financial Officer, the Chief Accounting Officer".
Section 1.5. Section 4.05 shall be amended by deleting "its Chairman,
any Vice Chairman, its President and substituting therefor: "either Chairman,
the Chief Financial Officer, the Chief Accounting Officer".
2
<PAGE>
ARTICLE TWO
MISCELLANEOUS
Section 2.1. The Trustee accepts the trusts created by this Second
Supplemental Indenture upon the terms and conditions set forth in the Indenture.
The Trustee shall not be responsible or accountable in any manner whatsoever for
or in respect of, and makes no representation with respect to, the validity or
sufficiency of this Second Supplemental Indenture or the due execution hereof by
the Company and shall not be responsible in any manner whatsoever for or in
respect of the correctness of the recitals and statements contained herein, all
of which recitals and statements are made solely by the Company.
Section 2.2. Except as hereby expressly modified, the Indenture is in
all respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect.
Section 2.3. This Second Supplemental Indenture may be executed in any
number of counterparts, each of which shall be deemed to be an original for all
purposes; but such counterparts shall together be deemed to constitute but one
and the same instrument.
The First National Bank of Chicago hereby accepts the trusts in this
Second Supplemental Indenture declared and provided, upon the terms and
conditions herein set forth.
3
<PAGE>
IN WITNESS WHEREOF, each of CITIGROUP INC. and THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee, has caused this Second Supplemental Indenture to be
signed and acknowledged by one of its officers thereunto duly authorized, and
its corporate seal to be affixed hereto, and the same to be attested by the
signature of its Secretary or one of its Assistant Secretaries, all as of
January 21, 1999.
CITIGROUP INC.
By: /S/ ROBERT MATZA
----------------------------------
Name: Robert Matza
Title: Deputy Treasurer
Attest:
By: /S/ STEPHANIE B. MUDICK
--------------------------------
Corporate Seal
THE FIRST NATIONAL BANK
OF CHICAGO
By: /S/ MARY R. FONTI
----------------------------------
Name: Mary R. Fonti
Title: Assistant Vice President
Attest:
By: /S/ MICHAEL D. PINZON
--------------------------------
Corporate Seal
4
<PAGE>
Exhibit 4.45
CERTIFICATE OF DESIGNATION
of
5.321% CUMULATIVE PREFERRED STOCK, SERIES YY
of
CITIGROUP INC.
pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
CITIGROUP INC., a Delaware corporation (the "Company"), hereby
certifies that:
1. The Restated Certificate of Incorporation of the Company
(the "Certificate of Incorporation") fixes the total number of shares of all
classes of capital stock that the Company shall have the authority to issue at
six billion (6,000,000,000) shares of common stock, par value $.01 per share
("Common Stock") and thirty million (30,000,000) shares of preferred stock, par
value $1.00 per share ("Preferred Stock").
2. The Certificate of Incorporation expressly grants to the
Board of Directors of the Company (the "Board of Directors") authority to
provide for the issuance of the shares of Preferred Stock in series, and to
establish from time to time the number of shares to be included in each such
series and to fix the designation, powers, preferences and rights of the shares
of each such series and the qualifications, limitations or restrictions thereof.
3. Pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation, the Executive Committee of the
Board of Directors, by action duly taken on September 15, 1998, and the Notes
Committee, by action duly taken on December 15, 1998, adopted resolutions that
provide for a series of Preferred Stock as follows:
RESOLVED, that an issue of a series of Preferred Stock is
hereby provided for, and the number of shares to be included in such series is
established, and the designation, powers, preference and rights, and
qualifications, limitations or restrictions thereof, of such series are fixed,
hereby as follows:
1. DESIGNATION AND NUMBER OF SHARES. The
designation of such series shall be 5.321% Cumulative Preferred
<PAGE>
Stock, Series YY (the "Series YY Preferred Stock"), and the number of
shares constituting such series shall be 987. The number of authorized
shares of Series YY Preferred Stock may be reduced (but not below the
number of shares thereof then outstanding) by further resolution duly
adopted by the Board of Directors or the Executive Committee of the
Board of Directors (the "Executive Committee") and by the filing of a
certificate pursuant to the provisions of the General Corporation Law
of the State of Delaware stating that such reduction has been so
authorized, but the number of authorized shares of Series YY Preferred
Stock shall not be increased.
2. DIVIDENDS. Dividends on each share of
Series YY Preferred Stock shall be cumulative from the date of original
issue of such share and shall be payable, when and as declared by the
Board of Directors out of funds legally available therefor, in cash on
January 31, April 30, July 31 and October 31 of each year, commencing
January 31, 1999 (the "First Dividend Payment Date"), provided that if
any such day is not a Business Day (as hereinafter defined), such
dividend shall be paid on the next succeeding Business Day. "Business
Day" means any day that is not a Saturday, Sunday or a legal holiday in
New York.
Each quarterly period beginning on January
31, April 30, July 31 and October 31 in each year and ending on and
including the day next preceding the first day of the next such
quarterly period shall be a "Dividend Period." The amount of dividends
payable for each Dividend Period other than the initial Dividend Period
for each share of Series YY Preferred Stock shall be $13,302.50 (or
one-fourth of 5.321% of the Liquidation Preference (as defined in
Section 7) for such share); provided, however, that with respect to the
initial Dividend Period, the dividend payable on such share on the
First Dividend Payment Date shall be $5,783.70. If a share of Series YY
Preferred Stock is outstanding for less than an entire Dividend Period,
the dividend payable on such share on the dividend payment date related
to such Dividend Period shall be the product of $13,302.50 multiplied
by the ratio (which shall not exceed one) that the number of days that
such share was outstanding during such Dividend Period bears to the
number of days in such Dividend Period.
Each dividend on the shares of Series YY
Preferred Stock shall be paid to the holders of record of shares of
Series YY
<PAGE>
Preferred Stock as they appear on the stock register of the Company on
such record date, not more than 60 days nor less than 10 days preceding
the payment date of such dividend, as shall be fixed in advance by the
Board of Directors. Dividends on account of arrears for any past
Dividend Periods may be declared and paid at any time, without
reference to any regular dividend payment date, to holders of record on
such date, not exceeding 45 days preceding the payment date thereof, as
may be fixed in advance by the Board of Directors.
If there shall be outstanding shares of any
other class or series of preferred stock of the Company ranking on a
parity as to dividends with the Series YY Preferred Stock, the Company,
in making any dividend payment on account of arrears on the Series YY
Preferred Stock or such other class or series of preferred stock, shall
make payments ratably upon all outstanding shares of Series YY
Preferred Stock and such other class or series of preferred stock in
proportion to the respective amounts of dividends in arrears upon all
such outstanding shares of Series YY Preferred Stock and such other
class or series of preferred stock to the date of such dividend
payment.
Holders of shares of Series YY Preferred
Stock shall not be entitled to any dividend, whether payable in cash,
property or stock, in excess of full cumulative dividends on such
shares. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment that is in arrears.
3. REDEMPTION. The Series YY Preferred Stock
is not subject to any mandatory redemption pursuant to a sinking fund
or otherwise. The Company, at its option, may redeem shares of Series
YY Preferred Stock, as a whole or in part, at any time or from time to
time on or after December 22, 2018, at a price of $1,000,000 per share,
plus accrued and accumulated but unpaid dividends thereon to but
excluding the date fixed for redemption (the "Redemption Price").
If the Company shall redeem shares of Series
YY Preferred Stock pursuant to this Section 3, notice of such
redemption shall be given by first class mail, postage prepaid, not
less than 30 or more than 90 days prior to the redemption date, to each
holder of record of the shares to be redeemed, at such holder's address
as shown on the stock register of the Company. Each such notice shall
state: (a) the redemption date; (b) the number of shares of Series YY
<PAGE>
Preferred Stock to be redeemed and, if less than all such shares held
by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (c) the Redemption Price; (d) the place or
places where certificates for such shares are to be surrendered for
payment of the Redemption Price; and (e) that dividends on the shares
to be redeemed will cease to accrue on such redemption date. Notice
having been mailed as aforesaid, from and after the redemption date
(unless default shall be made by the Company in providing money for the
payment of the Redemption Price) dividends on the shares of Series YY
Preferred Stock so called for redemption shall cease to accrue, and
such shares shall no longer be deemed to be outstanding, and all rights
of the holders thereof as stockholders of the Company (except the right
to receive from the Company the Redemption Price) shall cease. Upon
surrender in accordance with such notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the
Board of Directors shall so require and the notice shall so state), the
Company shall redeem such shares at the Redemption Price. If less than
all the outstanding shares of Series YY Preferred Stock are to be
redeemed, the Company shall select those shares to be redeemed from
outstanding shares of Series YY Preferred Stock not previously called
for redemption by lot or pro rata (as nearly as may be) or by any other
method determined by the Board of Directors to be equitable.
The Company shall not redeem less than all
the outstanding shares of Series YY Preferred Stock pursuant to this
Section 3, or purchase or acquire any shares of Series YY Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of shares of Series YY Preferred Stock,
unless full cumulative dividends shall have been paid or declared and
set apart for payment upon all outstanding shares of Series YY
Preferred Stock for all past Dividend Periods, and unless all matured
obligations of the Company with respect to all sinking funds,
retirement funds or purchase funds for all series of Preferred Stock
then outstanding have been met.
4. SHARES TO BE RETIRED. All shares of
Series YY Preferred Stock redeemed or repurchased by the Company shall
be retired and canceled and shall be restored to the status of
authorized but unissued shares of Preferred Stock, without designation
as to series, and may thereafter be reissued.
<PAGE>
5. CONVERSION OR EXCHANGE. The holders of
shares of Series YY Preferred Stock shall not have any rights to
convert any such shares into or exchange any such shares for shares of
any other class or series of capital stock of the Company.
6. VOTING. Except as otherwise provided in
this Section 6 or as otherwise required by law, the Series YY Preferred
Stock shall have no voting rights.
If six quarterly dividends (whether or not
consecutive) payable on shares of Series YY Preferred Stock are in
arrears at the time of the record date to determine stockholders for
any annual meeting of stockholders of the Company, the number of
directors of the Company shall be increased by two, and the holders of
shares of Series YY Preferred Stock (voting separately as a class with
the holders of shares of any one or more other series of Preferred
Stock upon which like voting rights have been conferred and are
exercisable) shall be entitled at such annual meeting of stockholders
to elect two directors of the Company, with the remaining directors of
the Company to be elected by the holders of shares of any other class
or classes or series of stock entitled to vote therefor. In any such
election, holders of shares of Series YY Preferred Stock shall have one
vote for each share held.
At all meetings of stockholders at which
holders of Preferred Stock shall be entitled to vote for directors as a
single class, the holders of a majority of the outstanding shares of
all classes and series of capital stock of the Company having the right
to vote as a single class shall be necessary to constitute a quorum,
whether present in person or by proxy, for the election by such single
class of its designated directors. In any election of directors by
stockholders voting as a class, such directors shall be elected by the
vote of at least a plurality of shares held by such stockholders
present or represented at the meeting. At any such meeting, the
election of directors by stockholders voting as a class shall be valid
notwithstanding that a quorum of other stockholders voting as one or
more classes may not be present or represented at such meeting.
Any director who has been elected by the
holders of shares of Series YY Preferred Stock (voting separately as a
class with the holders of shares of any one or more other series of
Preferred Stock upon which like voting rights have been conferred and
are exercisable) may be removed at any time, with or without
<PAGE>
cause, only by the affirmative vote of the holders of the shares at the
time entitled to cast a majority of the votes entitled to be cast for
the election of any such director at a special meeting of such holders
called for that purpose, and any vacancy thereby created may be filled
by the vote of such holders. If a vacancy occurs among the directors
elected by such stockholders voting as a class, other than by removal
from office as set forth in the preceding sentence, such vacancy may be
filled by the remaining director so elected, or his successor then in
office, and the director so elected to fill such vacancy shall serve
until the next meeting of stockholders for the election of directors.
The voting rights of the holders of the
Series YY Preferred Stock to elect directors as set forth above shall
continue until all dividend arrearages on the Series YY Preferred Stock
have been paid or declared and set apart for payment. Upon the
termination of such voting rights, the terms of office of all persons
who may have been elected pursuant to such voting rights shall
immediately terminate, and the number of directors of the Company shall
be decreased by two.
Without the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock then
outstanding, voting separately as a class without regard to series,
with the holders of shares of Series YY Preferred Stock being entitled
to cast one vote per share, the Company may not:
(i) create any class of stock that shall
have preference as to dividends or distributions of assets over the
Series YY Preferred Stock; or
(ii) alter or change the provisions of the
Certificate of Incorporation (including any Certificate of Amendment or
Certificate of Designation relating to the Series YY Preferred Stock)
so as to adversely affect the powers, preferences or rights of the
holders of shares of Series YY Preferred Stock;
PROVIDED, however, that if such creation or such alteration or change
would adversely affect the powers, preferences or rights of one or
more, but not all, series of Preferred Stock at the time outstanding,
such alteration or change shall require consent of the holders of
shares entitled to cast at least two-thirds of the votes entitled to be
<PAGE>
cast by the holders of all of the shares of all such series so
affected, voting as a class.
7. LIQUIDATION PREFERENCE. In the event of
any liquidation, dissolution or winding up of the Company, voluntary or
involuntary, the holders of Series YY Preferred Stock shall be entitled
to receive out of the assets of the Company available for distribution
to stockholders, before any distribution of assets shall be made to the
holders of the Common Stock or of any other shares of stock of the
Company ranking as to such distribution junior to the Series YY
Preferred Stock, a liquidating distribution in an amount equal to
$1,000,000 per share (the "Liquidation Preference") plus an amount
equal to any accrued and accumulated but unpaid dividends thereon to
the date of final distribution. The holders of the Series YY Preferred
Stock shall not be entitled to receive the Liquidation Preference and
such accrued dividends, however, until the liquidation preference of
any other class of stock of the Company ranking senior to the Series YY
Preferred Stock as to rights upon liquidation, dissolution or winding
up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full.
If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the assets
available for distribution are insufficient to pay in full the amounts
payable with respect to the Series YY Preferred Stock and any other
shares of stock of the Company ranking as to any such distribution on a
parity with the Series YY Preferred Stock, the holders of the Series YY
Preferred Stock and of such other shares shall share ratably in any
distribution of assets of the Company in proportion to the full
respective preferential amounts to which they are entitled.
After payment to the holders of the Series
YY Preferred Stock of the full preferential amounts provided for in
this Section 7, the holders of the Series YY Preferred Stock shall be
entitled to no further participation in any distribution of assets by
the Company.
Consolidation or merger of the Company with
or into one or more other corporations, or a sale, whether for cash,
shares of stock, securities or properties, of all or substantially all
of the assets of the Company, shall not be deemed or construed to be a
liquidation, dissolution or winding up of the Company within the
meaning of this Section 7 if the preferences or special voting rights
<PAGE>
of the holders of shares of Series YY Preferred Stock are not
impaired thereby.
8. LIMITATION ON DIVIDENDS ON JUNIOR STOCK.
So long as any Series YY Preferred Stock shall be outstanding the
Company shall not declare any dividends on the Common Stock or any
other stock of the Company ranking as to dividends or distributions of
assets junior to the Series YY Preferred Stock (the Common Stock and
any such other stock being herein referred to as "Junior Stock"), or
make any payment on account of, or set apart money for, a sinking fund
or other similar fund or agreement for the purchase, redemption or
other retirement of any shares of Junior Stock, or make any
distribution in respect thereof, whether in cash or property or in
obligations or stock of the Company, other than a distribution of
Junior Stock (such dividends, payments, setting apart and distributions
being herein called "Junior Stock Payments"), unless the following
conditions shall be satisfied at the date of such declaration in the
case of any such dividend, or the date of such setting apart in the
case of any such fund, or the date of such payment or distribution in
the case of any other Junior Stock Payment:
(i) full cumulative dividends shall have
been paid or declared and set apart for payment on all outstanding
shares of Preferred Stock other than Junior Stock; and
(ii) the Company shall not be in default or
in arrears with respect to any sinking fund or other similar fund or
agreement for the purchase, redemption or other retirement of any
shares of Preferred Stock other than Junior Stock;
PROVIDED, however, that any funds theretofore deposited in any sinking
fund or other similar fund with respect to any Preferred Stock in
compliance with the provisions of such sinking fund or other similar
fund may thereafter be applied to the purchase or redemption of such
Preferred Stock in accordance with the terms of such sinking fund or
other similar fund regardless of whether at the time of such
application full cumulative dividends upon shares of Series YY
Preferred Stock outstanding to the last dividend payment date shall
have been paid or declared and set apart for payment by the Company.
<PAGE>
9. RANKING OF STOCK OF THE COMPANY. In
respect of the Series YY Preferred Stock, any stock of any class or
classes of the Company shall be deemed to rank:
(a) prior to the shares of Series YY
Preferred Stock, either as to dividends or upon liquidation, if the
holders of such stock shall be entitled to either the receipt of
dividends or of amounts distributable upon dissolution, liquidation or
winding up of the Company, whether voluntary or involuntary, as the
case may be, in preference or priority to the holders of shares of the
Series YY Preferred Stock;
(b) on a parity with shares of the Series YY
Preferred Stock, either as to dividends or upon liquidation, whether or
not the dividend rates, dividend payment dates, redemption amounts per
share or liquidation values per share or sinking fund provisions, if
any, are different from those of the Series YY Preferred Stock, if the
holders of such stock shall be entitled to either the receipt of
dividends or of amounts distributable upon dissolution, liquidation or
winding up of the Company, whether voluntary or involuntary, as the
case may be, in proportion to their respective dividend rates or
liquidation values, without preference or priority, one over the other,
as between the holders of such stock and the holders of shares of the
Series YY Preferred Stock, provided in any such case such stock does
not rank prior to the Series YY Preferred Stock; and
(c) junior to shares of the Series YY
Preferred Stock, as to dividends and upon liquidation, if such stock
shall be Common Stock or if the holders of shares of the Series YY
Preferred Stock shall be entitled to receipt of dividends and of
amounts distributable upon dissolution, liquidation or winding up of
the Company, whether voluntary or involuntary, as the case may be, in
preference or priority to the holders of such stock.
The Series YY Preferred Stock is on a parity with the 6.365% Cumulative
Preferred Stock, Series F, 6.213% Cumulative Preferred Stock, Series G,
6.231% Cumulative Preferred Stock, Series H, Cumulative Convertible
Preferred Stock, Series I, 8.08% Cumulative Preferred Stock, Series J,
8.40% Cumulative Preferred Stock, Series K, 9.50% Cumulative Preferred
Stock, Series L, 5.864% Cumulative Preferred Stock, Series M, Graduated
Rate Cumulative Preferred Stock, Series O, Adjustable Rate Cumulative
<PAGE>
Preferred Stock, Series Q, Adjustable Rate Cumulative Preferred Stock,
Series R, 8.30% Noncumulative Preferred Stock, Series S, 8- 1/2%
Noncumulative Preferred Stock, Series T, 7 3/4% Cumulative Preferred
Stock, Series U, Fixed/Adjustable Rate Cumulative Preferred Stock,
Series V and Cumulative Adjustable Rate Preferred Stock, Series Y of
the Company, heretofore authorized for issuance by the Company.
10. WAIVER, MODIFICATION AND AMENDMENT.
Notwithstanding any other provisions relating to the Series YY
Preferred Stock, any of the rights or benefits of the holders of the
Series YY Preferred Stock may be waived, modified or amended with the
consent of the holders of all of the then outstanding shares of the
Series YY Preferred Stock. Any such waiver, modification or amendment
shall be deemed to have the same effect as satisfaction in full of any
such right or benefit as though actually received by such holders.
Citigroup Inc. has caused this Certificate to be duly executed by its
Deputy Treasurer this 18th day of December, 1998.
CITIGROUP INC.
By: /S/ ROBERT MATZA
--------------------------------------------
Robert Matza
Deputy Treasurer
<PAGE>
Exhibit 23.01
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Citigroup Inc.:
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 ("Registration Statement") of Citigroup
Inc. (formed as a result of the merger between Travelers Group Inc. and
Citicorp which has been accounted for as a pooling of interests), Citigroup
Capital VI, Citigroup Capital VII, Citigroup Capital VIII, Citigroup Capital
IX, Citigroup Capital X, Citigroup Capital XI, Citigroup Capital XII, and
Citigroup Capital XIII, of our reports dated January 26, 1998, with respect
to the consolidated statement of financial position of Travelers Group Inc.
and subsidiaries ("Travelers") as of December 31, 1997 and 1996, and the
related consolidated statements of income, changes in stockholders' equity
and cash flows for each of the years in the three-year period ended December
31, 1997, and the related financial statement schedules, which reports are
incorporated by reference or included in the 1997 Annual Report on Form 10-K,
as amended, of Travelers and to the reference to our firm under the heading
"Experts" in the Registration Statement.
/s/ KPMG LLP
- -----------------------------
New York, New York
January 22, 1999
<PAGE>
Exhibit 23.02
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Citicorp:
We consent to the incorporation by reference of our report dated January 20,
1998 relating to the consolidated balance sheets of Citicorp and subsidiaries
as of December 31, 1997 and 1996, the related consolidated statements of
income, changes in stockholders' equity, and cash flows 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, in Amendment No. 1 to the Registration Statement dated
January 22, 1999 on Form S-3 ("Registration Statement") of Citigroup Inc.
(formed as a result of the merger between Travelers Group Inc. and Citicorp
which has been accounted for as a pooling of interests), Citigroup Capital
VI, Citigroup Capital VII, Citigroup Capital VIII, Citigroup Capital IX,
Citigroup Capital X, Citigroup Capital XI, Citigroup Capital XII, and
Citigroup Capital XIII, and to the reference to our firm under the heading
"Experts" in the Registration Statement. Our report with respect to these
consolidated financial statements is included in the 1997 Citicorp Annual
Report and Form 10-K.
/s/ KPMG LLP
- --------------------------------
New York, New York
January 22, 1999
<PAGE>
Exhibit 23.03
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Citigroup Inc.:
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 ("Registration Statement") of Citigroup
Inc. (formed as a result of the merger between Travelers Group Inc. and
Citicorp which has been accounted for as a pooling of interests), Citigroup
Capital VI, Citigroup Capital VII, Citigroup Capital VIII, Citigroup Capital
IX, Citigroup Capital X, Citigroup Capital XI, Citigroup Capital XII, and
Citigroup Capital XIII, of our report dated October 8, 1998, with respect to
the supple mental consolidated statement of financial position of Citigroup
Inc. and subsidiaries ("Citigroup") as of December 31, 1997 and 1996, and the
related supplemental consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1997, and the related supplemental financial
statement schedule, which report appears in the Current Report on Form 8-K
dated October 26, 1998 of Citigroup and to the reference to our firm under
the heading "Experts" in the Registration Statement.
/s/ KPMG LLP
- --------------------------------
New York, New York
January 22, 1999
<PAGE>
Exhibit 23.04
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Citigroup Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in Amendment No. 1 to Form S-3 Registration Statement of Citigroup
Inc., Citigroup Capital VI, Citigroup Capital VII, Citigroup Capital VIII,
Citigroup Capital IX, Citigroup Capital X, Citigroup Capital XI, Citigroup
Capital XII and Citigroup Capital XIII (the "Registration Statement"), of our
report dated March 13, 1997, relating to the consolidated statement of
financial condition of Salomon Inc and subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1996, which report is incorporated by reference or
included in the annual report on Form 10-K of Travelers Group Inc. for the
year ended December 31, 1997, as amended by Form 10-K/A-1 and to the
reference to our firm under the heading "Experts" in the Registration
Statement.
/s/ Arthur Andersen LLP
- -----------------------------
New York, New York
January 22, 1999
