<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registsration No. 333-37992
PROSPECTUS SUPPLEMENT
(to prospectus dated November 21, 2000)
$1,250,000,000
[CITIGROUP LOGO]
7.250% SUBORDINATED NOTES DUE 2010
------------------------
The subordinated notes offered by this prospectus supplement will mature on
October 1, 2010. The notes will bear interest at a fixed rate of 7.250% per
annum. Interest on the notes is payable semiannually on April 1 and October 1 of
each year, beginning April 1, 2001. The notes may not be redeemed prior to
maturity, unless changes involving United States taxation occur which could
require Citigroup to pay additional amounts as described under "Description of
Notes." The subordinated notes will rank junior to Citigroup's senior
indebtedness and will rank pari passu among themselves.
The subordinated notes offered by this prospectus supplement form a part of
the same series as, and are fungible with, our outstanding 7.250% Subordinated
Notes due 2010 issued on October 11, 2000. Upon completion of this offering, the
aggregate principal amount of outstanding notes of this series will be
$4,250,000,000.
The subordinated notes are being offered globally for sale in the United
States, Europe, Asia and elsewhere where it is lawful to make such offers.
Application has been made to list the notes on the Luxembourg Stock Exchange.
Neither the Securities and Exchange Commission nor any state securities or
insurance commission nor the Luxembourg Stock Exchange has approved or
disapproved of these notes or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
------------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- -----
<S> <C> <C>
Public Offering Price....................................... 99.216% $1,240,200,000
Underwriting Discount....................................... .450% $ 5,625,000
Proceeds to Citigroup (before expenses)..................... 98.766% $1,234,575,000
</TABLE>
Interest on the notes will accrue from October 11, 2000 to the date of
delivery. Net proceeds to Citigroup (after expenses and including accrued
interest) are expected to be approximately $1,247,993,750.
------------------------
The underwriters are offering the notes subject to various conditions. The
underwriters expect that the notes will be ready for delivery in book-entry form
only through The Depository Trust Company, Clearstream or the Euroclear System
on or about December 5, 2000.
The notes are not deposits or savings accounts but are unsecured debt
obligations of Citigroup and are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency or instrumentality.
------------------------
SALOMON SMITH BARNEY
<TABLE>
<S> <C>
ABN AMRO INCORPORATED BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC. CHASE SECURITIES INC.
MURIEL SIEBERT & CO., INC. THE WILLIAMS CAPITAL GROUP, L.P.
</TABLE>
November 30, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company................................................. S-4
Selected Historical Financial Data.......................... S-4
Capitalization.............................................. S-5
Ratio of Income to Fixed Charges and Ratio of Income to
Combined Fixed Charges Including Preferred Stock
Dividends................................................. S-6
Use of Proceeds............................................. S-6
Description of Subordinated Notes........................... S-7
United States Tax Documentation Requirements................ S-16
United States Federal Income Tax Considerations for
Non-United States Holders................................. S-18
Underwriting................................................ S-20
Directors and Executive Officers of Citigroup Inc........... S-22
Legal Opinions.............................................. S-22
General Information......................................... S-23
PROSPECTUS
Prospectus Summary.......................................... 1
Forward-Looking Statements.................................. 6
Citigroup Inc............................................... 7
Use of Proceeds and Hedging................................. 8
European Monetary Union..................................... 9
Description of Debt Securities.............................. 10
Description of Index Warrants............................... 17
Description of Capital Stock................................ 20
Description of Preferred Stock.............................. 23
Description of Depositary Shares............................ 26
Book-Entry Procedures and Settlement........................ 29
Plan of Distribution........................................ 30
ERISA Matters............................................... 32
Legal Matters............................................... 32
Experts..................................................... 32
</TABLE>
------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus.
Citigroup 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 making an offer to sell the notes in
any jurisdiction where their offer and sale is not permitted. You should assume
that the information appearing in this prospectus supplement and the
accompanying prospectus, as well as information Citigroup previously filed with
the Securities and Exchange Commission and incorporated by reference, is
accurate only as of the date of the applicable document.
------------------------
This prospectus supplement and the accompanying prospectus include
information provided in order to comply with the rules governing the listing of
securities on the Luxembourg Stock Exchange. Citigroup is responsible for the
accuracy of the information contained or incorporated by reference in this
prospectus supplement and the accompanying prospectus. Citigroup confirms, after
reasonable inquiry, that to the best of its knowledge and belief it has not
omitted any other fact that would make any statement contained or incorporated
by reference in this prospectus supplement misleading in any material respect.
S-2
<PAGE> 3
THE LUXEMBOURG STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF
THIS DOCUMENT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM
OR IN RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
The distribution of this prospectus supplement and the accompanying
prospectus and the offering of the notes in certain jurisdictions may be
restricted by law. If you possess this prospectus supplement and the
accompanying prospectus, you should find out about and observe these
restrictions. This prospectus supplement and the accompanying prospectus are not
an offer to sell these securities and are not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted or where
the person making the offer or sale is not qualified to do so or to any person
to whom it is not permitted to make such offer or sale. See "Underwriting."
S-3
<PAGE> 4
THE COMPANY
Citigroup Inc. is a diversified holding company whose businesses provide a
broad range of financial services to consumer and corporate customers in more
than 100 countries and territories. Citigroup's activities are conducted through
Global Consumer, Global Corporate and Investment Bank, Global Investment
Management and Private Banking, and Investment Activities. Citigroup was
incorporated in 1988 under the laws of the State of Delaware as a corporation
with perpetual duration.
The principal office of Citigroup is located at 399 Park Avenue, New York,
New York 10043, and its telephone number is (212) 559-1000.
SELECTED HISTORICAL FINANCIAL DATA
We are providing or incorporating by reference in this prospectus
supplement selected historical financial information of Citigroup. All periods
have been restated where appropriate to reflect the merger of Citicorp into a
subsidiary of Travelers Group Inc. on October 8, 1998 and the merger of Salomon
Inc with a subsidiary of Travelers Group Inc. on November 28, 1997, each of
which was accounted for as a pooling of interests. The results of the property
casualty business acquired from subsidiaries of Aetna Service, Inc. are included
from the date of acquisition, April 2, 1996. We derived this information from
the consolidated financial statements of Citigroup, after giving effect to the
Citicorp and Salomon Inc mergers, for each of the periods presented. The
information is only a summary and should be read together with the financial
information incorporated by reference in this prospectus supplement, copies of
which can be obtained free of charge. See "Where You Can Find More Information"
on page 5 of the accompanying prospectus.
In addition, you may receive copies of all of Citigroup's filings with the
SEC that are incorporated by reference in this prospectus supplement free of
charge at the office of Citigroup's listing agent, Banque Internationale a
Luxembourg S.A., located at 69, route d'Esch, L-2953 Luxembourg.
The consolidated audited annual financial statements of Citigroup for the
fiscal years ended December 31, 1998 and 1999, and its consolidated unaudited
financial statements for the periods ending September 30, 1999 and 2000, are
incorporated herein by reference. These statements are obtainable free of charge
at the office of Citigroup's listing agent, at the address set forth in the
preceding paragraph.
The following table does not reflect the acquisition by Citigroup of
Associates First Capital Corporation. The acquisition was consummated via a
merger of a subsidiary of Citigroup with and into Associates First Capital
Corporation on November 30, 2000.
<TABLE>
<CAPTION>
AT OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues............. $ 72,477 $ 61,054 $ 82,005 $ 76,431 $ 72,306 $ 65,101 $ 58,957
Total revenues, net of
interest expense......... 49,225 42,471 57,237 48,936 47,782 43,765 36,567
Income from continuing
operations............... 9,683 7,372 9,994 5,807 6,705 7,073 5,610
Net income................. 9,683 7,245 9,867 5,807 6,705 6,739 5,760
Dividends declared per
common share............. 0.380 0.300 0.405 0.278 0.200(1) 0.150(1) 0.134(1)
BALANCE SHEET DATA:
Total assets............... $804,286 $686,813(2) $715,690(2) $668,782(2) $697,384 $626,906 $559,146
Total liabilities.......... 750,645 640,536(2) 666,800(2) 625,991(2) 655,533 588,490 523,963
Total deposits............. 293,251 247,714 261,091 228,649 199,121 184,955 167,131
Long-term debt............. 58,801 48,542 47,092 48,671 47,387 43,246 40,723
Total stockholders'
equity................... 53,641 46,277(2) 48,890(2) 42,791(2) 41,851 38,416 35,183
</TABLE>
---------------
(1) Amounts represent Travelers Group's historical dividends per common share
and have been adjusted to reflect stock splits.
(2) Restated to reflect the 2000 conversion of a portion of the convertible debt
of Nikko Securities Co., Ltd. into common stock.
S-4
<PAGE> 5
CAPITALIZATION
The following table sets forth the consolidated capitalization of Citigroup
at September 30, 2000, and as adjusted to give effect to the issuance and sale
of the notes and the application of the proceeds therefrom to the repayment of
short-term borrowings. No other change in the consolidated capitalization of
Citigroup since September 30, 2000 is reflected in the table. The information is
only a summary and should be read together with the financial information
incorporated by reference in this prospectus supplement and the accompanying
prospectus and which can be obtained free of charge. See "Where You Can Find
More Information" on page 5 of the accompanying prospectus.
As of the date of this prospectus supplement, there has been no material
change in the consolidated capitalization of Citigroup since September 30, 2000.
The following table does not reflect the acquisition by Citigroup of
Associates First Capital Corporation. The acquisition was consummated via a
merger of a subsidiary of Citigroup with and into Associates First Capital
Corporation on November 30, 2000.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 2000
--------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Debt:
Investment banking and brokerage borrowings............... $ 20,687 $ 20,687
Short-term borrowings..................................... 19,485 18,235
Long-term debt............................................ 58,801 60,051
-------- --------
Total debt(1).......................................... 98,973 98,973
-------- --------
Company or subsidiary obligated mandatorily redeemable
securities of subsidiary trusts holding solely junior
subordinated debt securities of --
Company................................................... 2,300 2,300
Subsidiaries.............................................. 2,620 2,620
Stockholders' equity:
Preferred stock at aggregate liquidation value(2)......... 1,775 1,775
Common stock and additional paid-in capital (net of
treasury stock)(3)..................................... 1,320 1,320
Retained earnings......................................... 51,744 51,744
Accumulated other changes in equity from nonowner
sources................................................ (182) (182)
Unearned compensation..................................... (1,016) (1,016)
-------- --------
Total stockholders' equity............................. 53,641 53,641
-------- --------
Total capitalization...................................... $157,534 $157,534
======== ========
</TABLE>
----------------
(1) Does not reflect the issuance by Citigroup (a) on October 11, 2000 of
$3,000,000,000 of its 7.250% subordinated notes and (b) of $3,000,000,000 of
its senior notes, expected to be issued on December 6, 2000.
(2) Preferred stock, par value U.S. $1.00 per share, 30 million shares
authorized, outstanding: 5,600,000 shares with a liquidation value of U.S.
$250; and 750,000 shares with a liquidation value of U.S. $500. See
"Description of Preferred Stock" and "Description of Capital
Stock -- Preferred Stock" in the accompanying prospectus.
(3) Common stock, par value U.S. $0.01 per share, 10 billion shares authorized,
4,491,904,562 shares outstanding. See "Description of Capital Stock" in the
accompanying prospectus.
S-5
<PAGE> 6
RATIO OF INCOME TO FIXED CHARGES AND
RATIO OF INCOME TO COMBINED FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
The following table shows (1) the consolidated ratio of income to fixed
charges and (2) the consolidated ratio of income to combined fixed charges
including preferred stock dividends of Citigroup for the nine months ended
September 30, 2000 and each of the five most recent fiscal years.
The following table does not reflect the acquisition by Citigroup of
Associates First Capital Corporation. The acquisition was consummated via a
merger of a subsidiary of Citigroup with and into Associates First Capital
Corporation on November 30, 2000.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
2000 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of income to fixed charges (excluding
interest on deposits)..................... 2.09 2.13 1.57 1.71 1.88 1.65
Ratio of income to fixed charges (including
interest on deposits)..................... 1.64 1.64 1.33 1.43 1.51 1.39
Ratio of income to combined fixed charges
including preferred stock dividends
(excluding interest on deposits).......... 2.07 2.09 1.54 1.66 1.80 1.56
Ratio of income to combined fixed charges
including preferred stock dividends
(including interest on deposits).......... 1.63 1.62 1.32 1.41 1.48 1.35
</TABLE>
USE OF PROCEEDS
Citigroup will use the net proceeds it receives from the sale of the notes
for general corporate purposes, which may include (1) capital contributions to
subsidiaries of Citigroup and/or (2) the reduction or refinancing of borrowings
of Citigroup or its subsidiaries. Citigroup expects to incur additional
indebtedness in the future.
S-6
<PAGE> 7
DESCRIPTION OF SUBORDINATED NOTES
The following description of the particular terms of the notes supplements
the description of the general terms set forth in the accompanying prospectus.
It is important for you to consider the information contained in the
accompanying prospectus and this prospectus supplement before making your
decision to invest in the notes. If any specific information regarding the notes
in this prospectus supplement is inconsistent with the more general terms of the
notes described in the prospectus, you should rely on the information contained
in this prospectus supplement.
GENERAL
The notes offered by this prospectus supplement have the same terms as our
outstanding 7.250% Subordinated Notes due 2010 issued on October 11, 2000, other
than the issue date and the issue price. The notes form a part of the same
series as those outstanding notes and will also be issued under Citigroup's
subordinated debt indenture. The notes will have the same ISIN, Common Code and
CUSIP number as, and upon closing will trade interchangeably with, the other
outstanding notes in the series. Upon completion of this offering, the aggregate
principal amount of outstanding notes of this series will be $4,250,000,000.
The notes will be issued only in fully registered form without coupons, in
denominations of $1,000 and whole multiples of $1,000. The notes are unsecured
obligations of Citigroup and will rank equally with all other unsecured and
subordinated indebtedness of Citigroup, whether currently existing or
hereinafter created, other than subordinated indebtedness which is designated as
junior to the notes.
As of the date of this prospectus supplement, Citigroup may offer an
aggregate principal amount of $20,750,000,000 of additional debt securities
under the registration statement of which this prospectus supplement and the
accompanying prospectus form a part. Citigroup may, without notice to or consent
of the holders or beneficial owners of the notes, issue additional notes having
the same ranking, interest rate, maturity and other terms as the notes. Any such
additional notes issued could be considered part of the same series of notes
under the indenture as the notes.
The notes are not redeemable prior to maturity, except upon the occurrence
of the tax events described below. See "-- Redemption for Tax Purposes." The
redemption price for the notes will be 100% of the principal amount thereof plus
accrued interest to the date of the redemption. The notes are not subject to any
sinking fund.
The notes will bear interest at a fixed rate per year of 7.250%, starting
on October 11, 2000 and ending on their maturity date, which is October 1, 2010.
Interest on the notes will be payable semiannually on April 1 and October 1 of
each year, starting on April 1, 2001. All payments of interest will be made to
the persons in whose names the notes are registered on the March 15 or September
15 preceding the interest payment date.
Interest will be calculated on the basis of a 360-day year comprised of
twelve 30-day months. All dollar amounts resulting from this calculation will be
rounded to the nearest cent.
Payments of principal and interest on the notes issued in book-entry form
will be made as described below under "-- Book-Entry Notes." Payments of
principal and interest on notes issued in definitive form, if any, will be made
as described below under "-- Definitive Notes and Paying Agents."
The notes are subject to the defeasance provisions explained in the
accompanying prospectus under "Description of Debt Securities -- Defeasance."
The subordinated notes will rank subordinate and junior in right of payment
to Citigroup's senior indebtedness, as described in "Description of Debt
Securities" in the accompanying prospectus. On a consolidated basis, the
aggregate principal amount of senior indebtedness of Citigroup outstanding as of
September 30, 2000 was approximately $91.6 billion. This senior indebtedness
consisted of approximately $51.4 billion of term debt, approximately $26.6
billion of commercial paper and approximately $13.6 billion of other short-term
borrowings.
If either a date for payment of principal or interest on the notes or the
maturity date of the notes falls on a day that is not a Business Day, the
related payment of principal or interest will be made on the next
S-7
<PAGE> 8
succeeding Business Day as if made on the date the payment was due. No interest
will accrue on any amounts payable for the period from and after the date for
payment of principal or interest on the notes or the maturity date of the notes.
For these purposes, "Business Day" means any day which is a day on which
commercial banks settle payments and are open for general business in The City
of New York.
BOOK-ENTRY NOTES
Book-Entry Notes; The Depository Trust Company
Except under the limited circumstances described below, all notes will be
book-entry notes. This means that the actual purchasers of the notes will not be
entitled to have the notes registered in their names and will not be entitled to
receive physical delivery of the notes in definitive (paper) form. Instead, upon
issuance, all the notes will be represented by one or more fully registered
global notes.
Each global note will be deposited with The Depository Trust Company, a
securities depositary, and will be registered in the name of DTC's nominee, Cede
& Co. No global note representing book-entry notes may be transferred except as
a whole by DTC to a nominee of DTC, or by a nominee of DTC to another nominee of
DTC. Thus, DTC will be the only registered holder of the notes and will be
considered the sole representative of the beneficial owners of the notes for
purposes of the indenture.
The registration of the global notes in the name of Cede & Co. will not
affect beneficial ownership and is performed merely to facilitate subsequent
transfers. The book-entry system, which is also the system through which most
publicly traded common stock is held in the United States, is used because it
eliminates the need for physical movement of securities certificates. The laws
of some jurisdictions, however, may require some purchasers to take physical
delivery of their notes in definitive form. These laws may impair the ability of
holders to transfer book-entry notes.
Purchasers of notes in the United States may hold interests in the global
notes only through DTC, if they are participants in such system. Purchasers may
also hold interests indirectly through securities intermediaries -- such as
banks, brokerage houses and other institutions that maintain securities accounts
for customers -- that have accounts with DTC or its nominee ("participants").
Purchasers of notes in Europe can hold interests in the global notes only
through Clearstream Banking, societe anonyme, or through Morgan Guaranty Trust
Company of New York, Brussels Office, as operator of the Euroclear System, if
they are participants in these systems or indirectly through organizations that
are participants in these systems.
Because DTC will be the only registered owner of the global notes,
Clearstream Banking and Euroclear will hold positions through their respective
U.S. depositaries, which in turn will hold positions on the books of DTC.
Citibank, N.A. will act as U.S. depositary for Clearstream Banking, and The
Chase Manhattan Bank will act as U.S. depositary for Euroclear. For information
on how accounts of ownership of notes held through DTC are recorded, please
refer to "Book-Entry Procedures and Settlement" beginning on page 29 of the
accompanying prospectus.
Citigroup, the trustee and all of their agents will not be liable for the
accuracy of, or responsible for maintaining, supervising or reviewing, DTC's
records or any participant's records relating to book-entry notes. Citigroup,
the trustee and all of their agents also will not be responsible or liable for
payments made on account of the book-entry notes.
In this prospectus supplement, unless and until definitive (paper) notes
are issued to the beneficial owners as described below, all references to
"holders" of notes shall mean DTC. Citigroup, the trustee and any paying agent,
transfer agent or registrar may treat DTC as the absolute owner of the notes for
all purposes.
Citigroup will make all distributions of principal and interest on their
notes to DTC. Citigroup will send all required reports and notices solely to DTC
as long as DTC is the registered holder of the notes. DTC and its participants
are generally required by law to receive and transmit all distributions, notices
and directions from Citigroup and the trustee to the beneficial owners through a
chain of intermediaries.
S-8
<PAGE> 9
Purchasers of the notes will not receive written confirmation from DTC of their
purchases. However, beneficial owners of book-entry notes are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the participants or indirect
participants through which they entered into the transaction.
Similarly, Citigroup and the trustee will accept notices and directions
solely from DTC. Therefore, in order to exercise any rights of a holder of notes
under the indenture, each person owning a beneficial interest in the notes must
rely on the procedures of DTC and, in some cases, Clearstream Banking or
Euroclear. If the beneficial owner is not a participant in the applicable
system, then it must rely on the procedures of the participant through which
that person owns its interest. DTC has advised Citigroup that it will take
actions under the indenture only at the direction of its participants, which in
turn will act only at the direction of the beneficial owners. Some of these
actions, however, may conflict with actions DTC takes at the direction of other
participants and beneficial owners.
Notices and other communications by DTC to participants, by participants to
indirect participants, and by participants and indirect participants to
beneficial owners will be governed by arrangements among them.
Book-entry notes may be more difficult to pledge because of the lack of
physical note. Beneficial owners may experience delays in receiving
distributions on their notes since distributions will initially be made to DTC
and must then be transferred through the chain of intermediaries to the
beneficial owner's account.
For background information on DTC, please refer to "Book-Entry Procedures
and Settlement" beginning on page 29 of the accompanying prospectus.
Clearstream
Clearstream Banking, societe anonyme, was incorporated as a limited
liability company under Luxembourg law. Clearstream is owned by Cedel
International, societe anonyme, and Deutsche Borse AG. The shareholders of these
two entities are banks, securities dealers and financial institutions.
Clearstream holds securities for its customers and facilitates the
clearance and settlement of securities transactions between Clearstream
customers through electronic book-entry changes in accounts of Clearstream
customers, thus eliminating the need for physical movement of certificates.
Clearstream provides to its customers, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Clearstream interfaces with
domestic markets in a number of countries. Clearstream has established an
electronic bridge with Morgan Guaranty Trust Company of New York, the operator
of the Euroclear System, to facilitate settlement of trades between Clearstream
and Euroclear.
As a registered bank in Luxembourg, Clearstream is subject to regulation by
the Luxembourg Commission for the Supervision of the Financial Sector.
Clearstream customers are recognized financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies
and clearing corporations. In the United States, Clearstream customers are
limited to securities brokers and dealers and banks. Clearstream customers may
include the underwriters. Other institutions that maintain a custodial
relationship with a Clearstream customer may obtain indirect access to
Clearstream. Clearstream is an indirect participant in DTC.
Distributions with respect to the notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream customers in
accordance with its rules and procedures, to the extent received by Clearstream.
The Euroclear System
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System and to clear and settle transactions
between Euroclear participants through simultaneous electronic book-
S-9
<PAGE> 10
entry delivery against payment, thus eliminating the need for physical movement
of certificates and risk from lack of simultaneous transfers of securities and
cash. Transactions may now be settled in many currencies, including United
States dollars and Japanese Yen. The Euroclear System provides various other
services, including securities lending and borrowing and interfaces with
domestic markets in several countries generally similar to the arrangements for
cross-market transfers with DTC described below.
The Euroclear System is operated by Morgan Guaranty Trust Company of New
York through its Brussels, Belgium office (the "Euroclear Operator"), under
contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). The Euroclear Operator conducts all operations,
and all Euroclear securities clearance accounts and Euroclear cash accounts are
accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for the Euroclear System on behalf of Euroclear participants.
Euroclear participants include banks (including central banks), securities
brokers and dealers and other professional financial intermediaries and may
include the underwriters. Indirect access to the Euroclear System is also
available to other firms that clear through or maintain a custodial relationship
with a Euroclear participant, either directly or indirectly. Euroclear is an
indirect participant in DTC.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. The Board of
Governors of the Federal Reserve System, the New York State Banking Department
and the Belgian Banking Commission regulate and examine the Euroclear Operator.
The Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear System and applicable Belgian law govern
securities clearance accounts and cash accounts with the Euroclear Operator.
Specifically, these terms and conditions govern:
- transfers of securities and cash within the Euroclear System,
- withdrawal of securities and cash from the Euroclear System and
- receipts of payments with respect to securities in the Euroclear System.
All securities in the Euroclear System are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the terms and conditions only on behalf of
Euroclear participants and has no record of or relationship with persons holding
securities through Euroclear participants.
Distributions with respect to notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear participants in accordance
with the Euroclear Terms and Conditions, to the extent received by the Euroclear
Operator and by Euroclear.
The foregoing information about DTC, Clearstream Banking and Euroclear has
been provided by each of them for informational purposes only and is not
intended to serve as a representation, warranty, or contract modification of any
kind.
Global Clearance and Settlement Procedures
Initial settlement for the notes will be made in immediately available
funds. Secondary market trading between DTC participants will occur in the
ordinary way, in accordance with DTC's rules, and will be settled in immediately
available funds using DTC's same-day funds settlement system. Secondary market
trading between Clearstream Banking participants and/or Euroclear participants
will occur in the ordinary way, in accordance with the applicable rules and
operating procedures of Clearstream Banking and Euroclear, and will be settled
using the procedures applicable to conventional eurobonds in immediately
available funds.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
Banking or Euroclear participants, on the other, will be effected through DTC,
in accordance with DTC's rules, on behalf of the relevant European international
S-10
<PAGE> 11
clearing system by the U.S. depositaries. However, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in this system in accordance
with its rules and procedures and within its established deadlines, European
time. The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its U.S.
depositary to take action to effect final settlement on its behalf by delivering
or receiving notes in DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC. Clearstream
Banking participants and Euroclear participants may not deliver instructions
directly to DTC.
Because of time-zone differences, credits of notes received in Clearstream
Banking or Euroclear as a result of a transaction with a DTC participant will be
made during subsequent securities settlement processing and will be credited the
business day following the DTC settlement date. These credits or any
transactions in such notes settled during such processing will be reported to
the relevant Euroclear or Clearstream Banking participants on that business day.
Cash received in Clearstream Banking or Euroclear as a result of sales of notes
by or through a Clearstream Banking participant or a Euroclear participant to a
DTC participant will be received with value on the DTC settlement date, but will
be available in the relevant Clearstream Banking or Euroclear cash account only
as of the business day following settlement in DTC.
Although DTC, Clearstream Banking and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of notes among
participants of DTC, Clearstream Banking and Euroclear, they are under no
obligation to perform or continue to perform these procedures, and these
procedures may be discontinued at any time.
Distributions on Book-Entry Notes
Citigroup will make all distributions of principal and interest on
book-entry notes to DTC. Upon receipt of any payment of principal or interest,
DTC will immediately credit the accounts of its participants on its book-entry
registration and transfer system. DTC will credit those accounts in proportion
to the participants' respective beneficial interests in the principal amount of
the global note as shown on the records of DTC. Payments by participants to
beneficial owners of book-entry notes will be governed by standing instructions
and customary practices, as is now the case with securities held for the
accounts of customers in bearer form or registered in "street name," and will be
the responsibility of those participants.
Distributions on the book-entry notes held beneficially through Clearstream
Banking will be credited to Clearstream Banking participants, in accordance with
Clearstream Banking's rules and procedures, to the extent received by its U.S.
depositary.
Distributions on book-entry notes held beneficially through Euroclear will
be credited to Euroclear participants, in accordance with the Euroclear Terms
and Conditions, to the extent received by its U.S. depositary.
DEFINITIVE NOTES AND PAYING AGENTS
If any of the events described under "Book-Entry Procedures and Settlement"
on page 29 of the accompanying prospectus occurs, then the beneficial owners
will be notified through the chain of intermediaries that definitive notes are
available. Beneficial owners of book-entry notes will then be entitled (1) to
receive physical delivery in certificated form of definitive notes equal in
principal amount to their beneficial interest and (2) to have the definitive
notes registered in their names. The definitive notes will be issued in
denominations of $1,000 and whole multiples of $1,000 in excess of that amount.
Definitive notes will be registered in the name or names of the person or
persons DTC specifies in a written instruction to the registrar of the notes.
DTC may base its written instruction upon directions it receives from its
participants. Thereafter, the holders of the definitive notes will be recognized
as the "holders" of the notes under the indenture.
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The indenture provides for the replacement of a mutilated, lost, stolen or
destroyed definitive note, so long as the applicant furnishes to Citigroup and
the trustee such security or indemnity and such evidence of ownership as they
may require.
In the event definitive notes are issued, the holders of definitive notes
will be able to receive payments of principal and interest on their notes at the
office of Citigroup's paying agent maintained in the Borough of Manhattan, and,
if the notes are listed on the Luxembourg Stock Exchange, at the offices of the
paying agent in Luxembourg. Payment of principal and a definitive note may be
made only against surrender of the note to one of Citigroup's paying agents.
Citigroup has the option, however, of making payments of interest by mailing
checks to the address of the holder appearing in the register of note holders
maintained by the registrar.
Citigroup's paying agent in the Borough of Manhattan is currently the
corporate trust office of Bank One Trust Company, N.A., located at 14 Wall
Street, 8th Floor, New York, New York. Citigroup's paying agent and transfer
agent in Luxembourg is Banque Internationale a Luxembourg S.A., currently
located at 69, route d'Esch, L-2953 Luxembourg. As long as the notes are listed
on the Luxembourg Stock Exchange, Citigroup will maintain a paying agent and
transfer agent in Luxembourg. Any change in the Luxembourg paying agent and
transfer agent will be published in London and Luxembourg. See "-- Notices."
In the event definitive notes are issued, the holders of definitive notes
will be able to transfer their notes, in whole or in part, by surrendering the
notes for registration of transfer at the office of Bank One Trust Company, N.A.
and, so long as notes are listed on the Luxembourg Stock Exchange, at the
offices of the paying agent in Luxembourg, duly endorsed by or accompanied by a
written instrument of transfer in form satisfactory to Citigroup and the
securities registrar. Upon surrender, Citigroup will execute, and the trustee
will authenticate and deliver new notes to the designated transferee in the
amount being transferred, and a new note for any amount not being transferred
will be issued to the transferor. Citigroup will not charge any fee for the
registration of transfer or exchange, except that Citigroup may require the
payment of a sum sufficient to cover any applicable tax or other governmental
charge payable in connection with the transfer.
NOTICES
Notices to holders of the notes will be made by first class mail, postage
prepaid, to the addresses that appear on the register of Citigroup. So long as
the notes are listed on the Luxembourg Stock Exchange, notices will also be made
by publication in an authorized newspaper in Luxembourg, which is expected to be
the Luxemburger Wort. Any notice will be deemed to have been given on the date
of publication or, if published more than once, on the date of the first
publication.
PAYMENT OF ADDITIONAL AMOUNTS
Obligation to Pay Additional Amounts
Citigroup will pay additional amounts to the beneficial owner of any note
that is a non-United States person in order to ensure that every net payment on
such note will not be less, due to payment of U.S. withholding tax, than the
amount then due and payable. For this purpose, a "net payment" on a note means a
payment by Citigroup or a paying agent, including payment of principal and
interest, after deduction for any present or future tax, assessment or other
governmental charge of the United States. These additional amounts will
constitute additional interest on the note.
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Exceptions
Citigroup will not be required to pay additional amounts, however, in any
of the circumstances described in items (1) through (12) below.
(1) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is imposed or withheld solely by reason of the beneficial
owner:
- having a relationship with the United States as a citizen, resident
or otherwise;
- having had such a relationship in the past or
- being considered as having had such a relationship.
(2) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is imposed or withheld solely by reason of the beneficial
owner:
- being treated as present in or engaged in a trade or business in
the United States;
- being treated as having been present in or engaged in a trade or
business in the United States in the past or
- having or having had a permanent establishment in the United
States.
(3) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is imposed or withheld solely by reason of the beneficial
owner being or having been a:
- personal holding company;
- foreign personal holding company;
- foreign private foundation or other foreign tax-exempt
organization;
- passive foreign investment company;
- controlled foreign corporation or
- corporation which has accumulated earnings to avoid United States
federal income tax.
(4) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is imposed or withheld solely by reason of the beneficial
owner owning or having owned, actually or constructively, 10 percent
or more of the total combined voting power of all classes of stock of
Citigroup entitled to vote.
For purposes of items (1) through (4) above, "beneficial owner" means a
fiduciary, settlor, beneficiary, member or shareholder of the holder if the
holder is an estate, trust, partnership, limited liability company, corporation
or other entity, or a person holding a power over an estate or trust
administered by a fiduciary holder.
(5) Additional amounts will not be payable to any beneficial owner of a
note that is a:
- fiduciary;
- partnership;
- limited liability company or
- other fiscally transparent entity
or that is not the sole beneficial owner of the note, or any portion
of the note. However, this exception to the obligation to pay
additional amounts will only apply to the extent that a beneficiary or
settlor in relation to the fiduciary, or a beneficial owner or member
of the
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partnership, limited liability company or other fiscally transparent
entity, would not have been entitled to the payment of an additional
amount had the beneficiary, settlor, beneficial owner or member
received directly its beneficial or distributive share of the payment.
(6) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is imposed or withheld solely by reason of the failure of
the beneficial owner or any other person to comply with applicable
certification, identification, documentation or other information
reporting requirements. This exception to the obligation to pay
additional amounts will only apply if compliance with such reporting
requirements is required by statute or regulation of the United States
or by an applicable income tax treaty to which the United States is a
party as a precondition to exemption from such tax, assessment or
other governmental charge.
(7) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is collected or imposed by any method other than by
withholding from a payment on a note by Citigroup or a paying agent.
(8) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is imposed or withheld by reason of a change in law,
regulation, or administrative or judicial interpretation that becomes
effective more than 15 days after the payment becomes due or is duly
provided for, whichever occurs later.
(9) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment or other governmental
charge that is imposed or withheld by reason of the presentation by
the beneficial owner of a note for payment more than 30 days after the
date on which such payment becomes due or is duly provided for,
whichever occurs later.
(10) Additional amounts will not be payable if a payment on a note is
reduced as a result of any:
- estate tax;
- inheritance tax;
- gift tax;
- sales tax;
- excise tax;
- transfer tax;
- wealth tax;
- personal property tax or
- any similar tax, assessment or other governmental charge.
(11) Additional amounts will not be payable if a payment on a note is
reduced as a result of any tax, assessment, or other governmental
charge required to be withheld by any paying agent from a payment of
principal or interest on a note if such payment can be made without
such withholding by any other paying agent.
(12) Additional amounts will not be payable if a payment on a note is
reduced as a result of any combination of items (1) through (11)
above.
Except as specifically provided under "Payment of Additional Amounts" and
under "Redemption for Tax Purposes" below, Citigroup will not be required to
make any payment of any tax, assessment or other governmental charge imposed by
any government or a political subdivision or taxing authority of such
government.
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Relevant Definitions
As used in this prospectus supplement, "United States person" means:
- any individual who is a citizen or resident of the United States;
- any corporation, partnership or other entity created or organized in or
under the laws of the United States;
- any estate if the income of such estate falls within the federal income
tax jurisdiction of the United States regardless of the source of such
income and
- any trust if a United States court is able to exercise primary
supervision over its administration and one or more United States persons
have the authority to control all of the substantial decisions of the
trust.
Additionally, "non-United States person" means a person who is not a United
States person, and "United States" means the United States of America, including
the States and the District of Columbia, its territories, its possessions and
other areas within its jurisdiction.
REDEMPTION FOR TAX PURPOSES
Redemption Procedure
Citigroup may, at its option, redeem the notes as a whole, but not in part,
on not less than 30 nor more than 60 days' prior notice, only in the
circumstances described in items (1) or (2) below under "Redemption
Circumstances." To redeem, Citigroup must pay a redemption price equal to 100%
of the principal amount of the notes, together with accrued interest to the
redemption date.
Redemption Circumstances
There are two sets of circumstances in which Citigroup may redeem the notes
in the manner described above under "Redemption Procedure:"
(1) Citigroup may redeem the notes if:
- Citigroup becomes or will become obligated to pay additional amounts
as described under "Payment of Additional Amounts" above;
- the obligation to pay additional amounts arises as a result of any
change in the laws, regulations or rulings of the United States, or an
official position regarding the application or interpretation of such
laws, regulations or rulings, which change is announced or becomes
effective on or after the date of this prospectus supplement and
- Citigroup determines, in its business judgment, that the obligation to
pay such additional amounts cannot be avoided by the use of reasonable
measures available to it, other than substituting the obligor under
the notes or taking any action that would entail a material cost to
Citigroup.
(2) Citigroup may also redeem the notes if:
- any act is taken by a taxing authority of the United States on or
after the date of this prospectus supplement, whether or not such act
is taken in relation to Citigroup or any affiliate, that results in a
substantial probability that Citigroup will or may be required to pay
additional amounts as described under "Payment of Additional Amounts"
above;
- Citigroup determines, in its business judgment, that the obligation to
pay such additional amounts cannot be avoided by the use of reasonable
measures available to it, other than substituting the obligor under
the notes or taking any action that would entail a material cost to
Citigroup and
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<PAGE> 16
- Citigroup receives an opinion of independent counsel to the effect
that an act taken by a taxing authority of the United States results
in a substantial probability that Citigroup will or may be required to
pay the additional amounts described under "Payment of Additional
Amounts" above, and delivers to the trustee a certificate, signed by a
duly authorized officer, stating that based on such opinion Citigroup
is entitled to redeem the notes pursuant to their terms.
GOVERNING LAW
The subordinated debt indenture and the notes for all purposes shall be
governed by and construed in accordance with the laws of the State of New York.
UNITED STATES TAX DOCUMENTATION REQUIREMENTS
INTRODUCTION
The following discussion of United States tax documentation requirements
does not deal with all aspects of United States federal income tax withholding
or reporting that may be relevant to a beneficial owner of the notes that is a
non-United States person. Investors should consult their tax advisors for
specific advice concerning the acquisition, ownership and disposition of the
notes.
DOCUMENTATION REQUIRED IN ORDER TO OBTAIN AN EXEMPTION FROM WITHHOLDING TAX
A 30% United States federal withholding tax will generally apply to
payments of interest on the notes, unless the beneficial owner of a note takes
one of the following steps to obtain an exemption from or reduction of the tax.
The 30% tax, however, may be allowed as a refund or credit against the
beneficial owner's United States federal income tax liability. In addition, if a
beneficial owner of a note does not properly provide the required documentation,
or if such documentation is not properly transmitted to and received by the
United States person required to withhold United States federal income tax, the
beneficial owner will not be entitled to any additional amounts from Citigroup
described under "Description of Notes -- Payment of Additional Amounts" above.
(1) Non-United States Persons. A beneficial owner of a note that is a
non-United States person can obtain an exemption from the withholding tax by
providing a properly completed IRS Form W-8BEN or IRS Form W-8. Pursuant to
Treasury regulations, the Internal Revenue Service has issued new Form
W-8BEN to replace Form W-8. Existing Forms W-8 which were valid on or after
January 1, 1999 will continue to be valid until they expire, or December 31,
2000, whichever date is earlier. After December 31, 2000, a beneficial owner
must use Form W-8BEN to obtain an exemption from U.S. withholding tax.
Although Form W-8BEN is not required to be used until December 31, 2000,
beneficial owners may be asked to provide Form W-8BEN in addition to, or
instead of, the existing Form W-8 prior to such effective date. This
exemption is not available to:
- a controlled foreign corporation that is directly or indirectly related
to Citigroup through stock ownership;
- a person that actually or constructively owns 10 percent or more of the
total combined voting power of all classes of stock of Citigroup that are
entitled to vote; or
- a bank that has invested in the note as an extension of credit in the
ordinary course of its trade or business.
(2) Non-United States Persons with Effectively Connected Income. A beneficial
owner of a note that is a non-United States person, including a non-United
States corporation or bank with a United States branch, that conducts a
trade or business in the United States with which the interest income on a
note is effectively connected, can obtain an exemption from the withholding
tax by providing a properly completed IRS Form W-8ECI or IRS Form 4224.
Pursuant to Treasury regulations, the Internal Revenue Service has issued
new Form W-8ECI to replace Form 4224. Existing Forms 4224
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which were valid on or after January 1, 1999 will continue to be valid until
they expire, or December 31, 2000, whichever date is earlier. After December
31, 2000, a beneficial owner conducting a trade or business in the United
States must use Form W-8ECI to obtain an exemption from U.S. withholding
tax. Although Form W-8ECI is not required to be used until December 31,
2000, beneficial owners may be asked to provide Form W-8ECI in addition to,
or instead of, the existing Form 4224 prior to such effective date.
(3) Non-United States Persons Entitled to Income Tax Treaty Benefits. A
beneficial owner of a note that is a non-United States person entitled to
the benefits of an income tax treaty to which the United States is a party
can obtain an exemption from or reduction of the withholding tax by
providing a properly completed IRS Form W-8BEN or IRS Form 1001. Pursuant to
Treasury regulations, the Internal Revenue Service has issued new Form
W-8BEN to replace Form 1001. Existing Forms 1001 which were valid on or
after January 1, 1999 will continue to be valid until they expire, or
December 31, 2000, whichever date is earlier. After December 31, 2000, a
beneficial owner relying on a treaty exemption must use Form W-8BEN to
obtain an exemption from U.S. withholding tax. Although Form W-8BEN is not
required until December 31, 2000, beneficial owners may be asked to provide
Form W-8BEN in addition to, or instead of, the existing Form 1001 prior to
such effective date. The availability and extent of such exemption, however,
will depend upon the terms of the particular income tax treaty.
(4) United States Persons: IRS Form W-9. A beneficial owner of a note that is a
United States person can obtain an exemption from the withholding tax by
providing a properly completed IRS Form W-9, titled "Request for Taxpayer
Identification Number and Certification."
UNITED STATES FEDERAL INCOME TAX REPORTING PROCEDURE
Beneficial Owners. A beneficial owner of a note is required to submit the
appropriate IRS form under applicable procedures to the person through which the
owner directly holds the note. For example, if the beneficial owner is listed
directly on the books of Euroclear or Clearstream as the owner of the note, the
IRS form must be provided to Euroclear or Clearstream, as the case may be.
Other Persons Through Which a Note is Held. Each other person through
which a note is held must submit, on behalf of the beneficial owner, the IRS
form, or in some cases a copy of such form, under applicable procedures through
the chain of intermediaries, until the IRS form is received by the United States
person that would be required to withhold United States federal income tax from
interest on the note. For example, in the case of a note held through Euroclear
or Clearstream, the IRS form, or a copy of such form, must be received by the
U.S. depositary of such clearing agency. Applicable procedures include
additional certification requirements if a beneficial owner of the note provides
an IRS Form W-8 or IRS Form W-8BEN to any person who is a securities clearing
organization, bank, financial institution, custodian, broker, nominee or
otherwise acting as an agent for a beneficial noteholder that holds the note on
its behalf. In addition, after December 31, 2000, any person who is a securities
clearing organization, bank, financial institution, custodian, broker, nominee
or otherwise acting as an agent for a beneficial owner must submit Form W-8IMY,
or other substitute form deemed acceptable, to provide certification of the
validity of the beneficial owner's Form W-8BEN. Further, although Form W-8IMY is
not required until December 31, 2000, such persons may be asked to provide Form
W-8IMY prior to such effective date.
Special Rules may apply if the notes are held by a foreign partnership. In
the event that the notes are held by a foreign partnership, special rules may
apply in order that payments made on the notes not be subject to United States
federal withholding tax. Holders should consult their tax advisors with respect
to the tax consequences to them of the ownership and disposition of the notes
through a foreign partnership.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
FOR NON-UNITED STATES HOLDERS
The following is a general summary of United States federal income tax
considerations that may be relevant to a beneficial owner of notes that is not a
United States person (a "non-United States holder"). The summary is based on
laws, regulations, rulings and decisions now in effect, all of which may change,
possibly with retroactive effect. This summary deals only with beneficial owners
that will hold notes as capital assets.
This summary does not address all of the United States federal income tax
considerations that may be relevant to non-United States holders. For example,
this summary does not address tax considerations applicable to investors to whom
special tax rules may apply, including:
- banks;
- tax-exempt entities;
- insurance companies;
- regulated investment companies;
- common trust funds;
- dealers in securities or currencies; or
- persons that will hold the notes as a hedge or hedged against currency
risk or as a part of an integrated investment, including a "straddle" or
"conversion transaction," comprised of a note and one or more other
positions.
Prospective investors should consult their tax advisors in determining the
particular United States federal income tax consequences to them of the
acquisition, ownership and disposition of the notes, as well as the application
of state, local, foreign or other tax laws.
Under current United States federal income tax law:
- withholding of United States federal income tax will not apply to a
payment on a note to a non-United States holder, provided that,
(1) the holder does not actually or constructively own 10 percent or
more of the total combined voting power of all classes of stock of
Citigroup entitled to vote 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
a non-United States holder in compliance with applicable
requirements and, with respect to payments made after December 31,
2000, satisfies documentary evidence requirements for establishing
that it is a non-United States holder; and
- a non-United States holder will not be subject to United States federal
income tax on gain realized on the sale, exchange, retirement or other
taxable disposition of a note, unless, in the case of an individual, such
holder is present in the United States for 183 days or more in the
taxable year of the retirement or disposition and certain other
conditions are met.
Despite the above, a non-United States holder that is subject to United
States federal income taxation on a net income basis generally will be taxable
under the same rules that govern the taxation of a United States holder
receiving or accruing interest on a note or realizing or recognizing gain or
loss on the sale, exchange, retirement or other taxable 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.
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United States information reporting requirements and backup withholding tax
will not apply to payments on a note if the beneficial owner (1) certifies its
non-U.S. status under penalties of perjury and, for payments made after December
31, 2000, also satisfies documentary evidence requirements for establishing that
it is a non-United States person, or (2) 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, provided that such broker
- derives less than 50% of its gross income for particular periods from the
conduct of a trade or business in the United States;
- is not a controlled foreign corporation for United States federal income
tax purposes; and
- for payments made after December 31, 2000, 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.
Backup withholding tax will also not apply to the payment of the proceeds
of the sale of a note effected outside the United States by a foreign office of
any other foreign or U.S. broker. However, information reporting requirements
will be applicable to such payment unless (1) such broker has documentary
evidence in its records that the beneficial owner is a non-United States person
and other conditions are met or (2) the beneficial owner otherwise establishes
an exemption.
Information reporting requirements and backup withholding tax will apply to
the payment of the proceeds of a sale of a note by the U.S. office of a broker,
unless the beneficial owner certifies its non-U.S. person status under penalties
of perjury or otherwise establishes an exemption.
For payments made after December 31, 2000, for purposes of applying the
above rules for non-United States holders to an entity that is treated as
fiscally transparent, e.g., a partnership or trust, the beneficial owner means
each of the ultimate beneficial owners of the entity.
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UNDERWRITING
The terms and conditions set forth in the terms agreement, which
incorporates by reference the underwriting agreement basic provisions dated
January 12, 1993, govern the sale and purchase of the notes. The terms agreement
and underwriting agreement basic provisions are referred to together as the
underwriting agreement. Each underwriter named below has severally agreed to
purchase from Citigroup, and Citigroup has agreed to sell to each underwriter,
the principal amount of notes set forth opposite the name of each underwriter.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Salomon Smith Barney Inc.................................... $1,100,000,000
ABN AMRO Incorporated....................................... 25,000,000
Banc of America Securities LLC.............................. 25,000,000
Banc One Capital Markets, Inc. ............................. 25,000,000
Chase Securities Inc. ...................................... 25,000,000
Muriel Siebert & Co., Inc. ................................. 25,000,000
The Williams Capital Group, L.P............................. 25,000,000
--------------
Total.................................................. $1,250,000,000
==============
</TABLE>
The underwriting agreement provides that the obligations of the
underwriters to pay for and accept delivery of the notes are subject to the
approval of legal matters by their counsel and to other conditions. The
underwriters are committed to take and pay for all of the notes if any are
taken.
The underwriters propose to offer part of the notes directly to the public
at the public offering prices set forth on the cover page of this prospectus
supplement and to certain dealers at the public offering price less a concession
not in excess of 0.350% of the principal amount. The underwriters may allow, and
such dealers may reallow, a concession to certain other dealers not in excess of
0.250% of the principal amount.
After the public offering, the public offering prices and the concessions
to dealers may be changed by the underwriters.
The underwriters are offering the notes subject to prior sale and their
acceptance of the notes from Citigroup. The underwriters may reject any order in
whole or in part.
Citigroup has agreed to indemnify the underwriters against liabilities
relating to material misstatements and omissions.
In accordance with Regulation M of the United States Securities Exchange
Act of 1934, the underwriters may over-allot or effect transactions that
stabilize or cover, each of which is described below.
- Over-allotment involves sales in excess of the offering size, which
creates a short position for the underwriters.
- Stabilizing transactions involve bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Covering transactions involve purchases of the notes in the open market
after the distribution has been completed in order to cover short
positions.
These transactions may cause the price of the notes to be higher that it
would otherwise be in the absence of such transactions. The underwriters are not
required to engage in any of these activities and may end any of these
activities at any time. The underwriters may also impose a penalty bid. Penalty
bids permit an underwriter to reclaim a selling concession from a syndicate
member when that underwriter, in covering syndicate short positions or making
stabilizing purchases, purchases notes originally sold by that syndicate member.
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We estimate that the total expenses of this offering will be $175,000.
The notes will have the same ISIN, Common Code and CUSIP number as, and
upon closing will trade interchangeably with, the other outstanding notes in the
same series. Citigroup has applied for listing of the notes on the Luxembourg
Stock Exchange. The prior series of subordinated notes, with which the notes
offered by this prospectus supplement will be a part upon issuance, have been
listed on such exchange. Citigroup has been advised by the underwriters that
they presently intend to make a market in the notes, as permitted by applicable
laws and regulations. The underwriters are not obligated, however, to make a
market in the notes and may discontinue any market making at any time at their
sole discretion. Accordingly, Citigroup can make no assurance as to the
liquidity of, or trading markets for, the notes.
The underwriters and their affiliates may engage in transactions (which may
include commercial banking transactions) with, and perform services for,
Citigroup or one or more of its affiliates in the ordinary course of business.
Salomon Smith Barney Inc., the lead manager for this offering, is a
subsidiary of Citigroup. Accordingly, the offering of the notes will conform
with the requirements set forth in Rule 2720 of the Conduct Rules of the NASD.
This prospectus supplement, together with the accompanying prospectus, may
also be used by Citigroup's broker-dealer subsidiaries or other subsidiaries or
affiliates of Citigroup in connection with offers and sales of the notes in
market-making transactions at negotiated prices related to prevailing market
prices at the time of sale. Any of these subsidiaries may act as principal or
agent in such transactions.
The notes are being offered globally for sale in the United States, Europe,
Asia and elsewhere where it is lawful to make such offers.
Purchasers of the notes may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase in
addition to the issue price set forth on the cover page of this document.
The underwriters have agreed that they will not offer, sell or deliver any
of the notes, directly or indirectly, or distribute this prospectus supplement
or the accompanying prospectus or any other offering material relating to the
notes, in or from any jurisdiction, except when to the best knowledge and belief
of the underwriters it is permitted under applicable laws and regulations. In so
doing, the underwriters will not impose any obligations on Citigroup, except as
set forth in the underwriting agreement.
Each underwriter has represented and agreed that:
- it has not offered or sold, and, prior to the expiration of the period of
six months from the closing date for the issuance of the notes, will not
offer or sell any notes to persons in the United Kingdom, except to those
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments, as principal or agent, for the
purposes of their businesses or otherwise in circumstances that have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995, as amended;
- it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the notes in, from or otherwise involving the United Kingdom.
- it has only issued or passed on, and will only issue or pass on, in the
United Kingdom any document received by it in connection with the issue
or sale of the notes to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996, as amended, or is a person to whom the document
may otherwise lawfully be issued or passed on;
- it will not offer or sell any notes directly or indirectly in Japan or
to, or for the benefit of, any Japanese person or to others, for
re-offering or re-sale directly or indirectly in Japan or to any
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<PAGE> 22
Japanese person except under circumstances which will result in
compliance with all applicable laws, regulations and guidelines
promulgated by the relevant governmental and regulatory authorities in
effect at the relevant time. For purposes of this paragraph, "Japanese
person" means any person resident in Japan, including any corporation or
other entity organized under the laws of Japan;
- it is aware of the fact that no German selling prospectus
(Verkaufsprospekt) has been or will be published in respect to the sale
of the notes and that it will comply with the Securities Selling
Prospectus Act (the "SSPA") of the Federal Republic of Germany
(Wertpapier-Verkaufsprospektgesetz). In particular, each underwriter has
undertaken not to engage in a public offering (offentliche Anbieten) in
the Federal Republic of Germany with respect to any notes otherwise than
in accordance with the SSPA and any other act replacing or supplementing
the SSPA and all other applicable laws and regulations;
- the notes are being issued and sold outside the Republic of France and
that, in connection with their initial distribution, it has not offered
or sold and will not offer or sell, directly or indirectly, any notes to
the public in the Republic of France, and that it has not distributed and
will not distribute or cause to be distributed to the public in the
Republic of France this prospectus supplement, the accompanying
prospectus or any other offering material relating to the notes; and
- it and each of its affiliates have not offered or sold, and will not
offer or sell, the notes by means of any document to persons in Hong Kong
other than persons whose ordinary business it is to buy or sell shares or
debentures, whether as principal or agent or otherwise in circumstances
which do not constitute an offer to the public within the meaning of the
Hong Kong Companies Ordinance (Chapter 32 of the Laws of Hong Kong).
DIRECTORS AND EXECUTIVE OFFICERS OF CITIGROUP INC.
The members of the board of directors of Citigroup are: C. Michael
Armstrong, Alain J.P. Belda, Kenneth J. Bialkin, Kenneth T. Derr, John M.
Deutch, Ann Dibble Jordan, Robert I. Lipp, Reuben Mark, Michael T. Masin, Dudley
C. Mecum, Richard D. Parsons, Andrall E. Pearson, Robert E. Rubin, Franklin A.
Thomas, Sanford I. Weill, and Arthur Zankel. The Honorable Gerald R. Ford is an
honorary director of Citigroup. The executive officers of Citigroup are: Sanford
I. Weill, Winifried F.W. Bischoff, Michael A. Carpenter, Paul J. Collins,
Michael D'Ambrose, Robert Druskin, Jay S. Fishman, Michael B.G. Froman, Thomas
W. Jones, Robert I. Lipp, Marjorie Magner, Deryck C. Maughan, Victor J. Menezes,
Charles O. Prince, III, William R. Rhodes, Robert E. Rubin, Petros K.
Sabatacakis, Todd S. Thomson, Robert B. Willumstad and Barbara A. Yastine. The
business address of each director and executive officer of Citigroup in such
capacities is 399 Park Avenue, New York, New York 10043.
LEGAL OPINIONS
The validity of the notes will be passed upon for Citigroup by John R. Dye,
an Associate General Counsel of Citigroup, and for the underwriters by Dewey
Ballantine LLP, New York, New York. Skadden, Arps, Slate, Meagher & Flom LLP,
New York, New York, has acted as special tax counsel to Citigroup in connection
with tax matters related to the issuance of the notes. Mr. Dye beneficially
owns, or has rights to acquire under Citigroup's employee benefit plans, an
aggregate of less than 1% of Citigroup's common stock. Dewey Ballantine LLP has
from time to time acted as counsel for Citigroup and 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. Kenneth J. Bialkin, a partner of Skadden, Arps, Slate, Meagher & Flom
LLP, is a director of Citigroup and he and other attorneys in his firm
beneficially own an aggregate of less than 1% of the common stock of Citigroup.
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<PAGE> 23
GENERAL INFORMATION
Application has been made to list the notes on the Luxembourg Stock
Exchange. The prior series of subordinated notes, with which the notes offered
by this prospectus supplement will be a part upon issuance, have been listed on
such exchange. In connection with the listing application, the certificate of
incorporation and the by-laws of Citigroup and a legal notice relating to the
issuance of the notes will be deposited prior to listing with Greffier en Chef
du Tribunal d'Arrondissement de et a Luxembourg where copies thereof may be
obtained. You may request copies of these documents together with this
prospectus supplement, the accompanying prospectus, the underwriting agreement,
the indenture, the fiscal agency agreement and Citigroup's current annual and
quarterly reports, as well as all other documents incorporated by reference in
this prospectus supplement, including future annual and quarterly reports, so
long as any of the notes are outstanding.
You can also request copies (free of charge) of (1) this prospectus
supplement, the accompanying prospectus, the fiscal agency agreement and the
indenture, and (2) Citigroup's annual, quarterly and current reports, as well as
other documents incorporated by reference in this prospectus supplement,
including future annual, quarterly and current reports, by following the
directions under "Where You Can Find More Information" on page 5 of the
accompanying prospectus. These documents will also be made available (free of
charge) at the main office of Banque Internationale a Luxembourg S.A. in
Luxembourg. Banque Internationale a Luxembourg S.A. will act as intermediary
between the Luxembourg Stock Exchange and Citigroup and the holders of the
notes.
As of the date of this Prospectus Supplement, there has been no material
adverse change in the consolidated financial condition of Citigroup since
September 30, 2000.
Neither Citigroup nor any of its subsidiaries is involved in litigation,
arbitration or administrative proceedings relating to claims or amounts that are
material in the context of the issue of the notes. Citigroup is not aware of any
such litigation, arbitration or administrative proceedings pending or
threatened.
Citigroup accepts responsibility for the information contained in this
prospectus supplement and the accompanying prospectus.
Resolutions relating to the issue and sale of the notes were adopted by the
board of directors of Citigroup on October 19, 1999, April 18, 2000 and October
17, 2000 and by the Funding Committee of the board of directors dated as of
November 30, 2000.
The notes have been accepted for clearance through Euroclear and
Clearstream and have been assigned Common Code No. 011888305, International
Security Identification Number (ISIN) US172967AZ49 and CUSIP No. 172967AZ4.
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<PAGE> 24
PROSPECTUS
[CITIGROUP LOGO]
May Offer --
$25,000,000,000
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. These securities are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency or
instrumentality.
------------------------
November 21, 2000
<PAGE> 25
PROSPECTUS SUMMARY
This summary provides a brief overview of the key aspects of Citigroup and
all material terms of the offered securities which are known as of the date of
this prospectus. For a more complete understanding of the terms of the offered
securities, before making your investment decision, you should carefully read:
- this prospectus, which explains the general terms of the securities that
Citigroup may offer;
- the accompanying prospectus supplement, which (1) explains the specific
terms of the securities being offered and (2) updates and changes
information in this prospectus; and
- the documents referred to in "Where You Can Find More Information" on
page 5 for information on Citigroup, including its financial statements.
CITIGROUP INC.
Citigroup is a diversified holding company whose businesses provide a broad
range of financial services to consumer and corporate customers in more than 100
countries and territories. Citigroup's activities are conducted through Global
Consumer, Global Corporate and Investment Bank, Global Investment Management and
Private Banking, and Investment Activities.
Citigroup's principal executive office is at 399 Park Avenue, 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 $25,000,000,000 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 of these 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 interest and principal payments on the
senior debt were not made.
The senior and subordinated debt will be issued under separate indentures
between Citigroup and a trustee. 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 incorporated by reference in
Citigroup's registration statement No. 333-49442, Citigroup's most recent annual
report on Form 10-K, Citigroup's quarterly reports on Form 10-Q filed after the
Form 10-K and Citigroup's current reports on Form 8-K filed after the Form 10-K.
You can receive copies of these documents by following the directions on page 5.
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
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<PAGE> 26
indenture does limit Citigroup's ability to pledge the stock of any
subsidiary that meets the financial thresholds in the indenture. These
thresholds are described below under "Description of Debt Securities."
- 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 generally would
be required to assume Citigroup's responsibilities for the debt. Unless
the transaction resulted in an event of default, Citigroup would be
released from all liabilities and obligations under the debt securities
when the other company assumed its responsibilities.
- 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 Citigroup's obligations or your rights
concerning those securities. However, changes to the financial 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 satisfy its obligations under the debt securities 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 scheduled installment 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.
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. 333-49442. You can
receive copies of these documents by following the directions on page 5.
Index warrants are securities that, when properly exercised by the
purchaser, 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.
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<PAGE> 27
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, the Nasdaq Stock Market's
National Market or the Chicago Board Options Exchange.
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 their rights concerning those index
warrants. However, changes to fundamental terms such as the amount or manner of
payment on an index warrant or changes to the exercise times cannot be made
unless every holder affected 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 the important 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,
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 registration statement No. 333-49442.
You can receive copies of this document by following the directions on page 5.
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. 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.
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<PAGE> 28
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 also use a portion of the proceeds to finance
possible acquisitions or business expansion and to refinance or extend the
maturity of existing debt obligations. Citigroup may use a portion of the
proceeds from the sale of index warrants and indexed notes 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.
RATIO OF INCOME TO FIXED CHARGES AND
RATIO OF INCOME TO COMBINED FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
The following table shows (1) the consolidated ratio of income to fixed
charges and (2) the consolidated ratio of income to combined fixed charges
including preferred stock dividends of Citigroup for the nine months ended
September 30, 2000 and each of the five most recent fiscal years.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
2000 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of income to fixed charges
(excluding interest on deposits)........ 2.09 2.13 1.57 1.71 1.88 1.65
Ratio of income to fixed charges
(including interest on deposits)........ 1.64 1.64 1.33 1.43 1.51 1.39
Ratio of income to combined fixed charges
including preferred stock dividends
(excluding interest on deposits)........ 2.07 2.09 1.54 1.66 1.80 1.56
Ratio of income to combined fixed charges
including preferred stock dividends
(including interest on deposits)........ 1.63 1.62 1.32 1.41 1.48 1.35
</TABLE>
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<PAGE> 29
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, Citigroup filed a registration
statement (No. 333-49442) 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, 1999, as
amended;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000,
June 30, 2000 and September 30, 2000;
(c) Current Reports on Form 8-K filed on January 19, 2000, February 16,
2000, February 28, 2000, April 18, 2000, June 20, 2000, July 20, 2000,
July 20, 2000, July 25, 2000, September 6, 2000, October 11, 2000 and
October 19, 2000; 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:
Citigroup Document Services
140 58th Street, Suite 5I
Brooklyn, NY 11220
(877) 936-3737 (toll free)
(718) 765-6460 (outside the U.S.)
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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<PAGE> 30
FORWARD-LOOKING STATEMENTS
This prospectus, the accompanying prospectus supplement and the information
incorporated by reference in this prospectus include forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. These forward-looking statements are based on our management's
beliefs and assumptions and on information currently available to our
management. Forward-looking statements include information concerning our
possible or assumed future results of operations and statements preceded by,
followed by or that include the words "believes," "expects," "anticipates,"
"intends," "plans," "estimates" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. Factors that could cause actual results to differ
from these forward-looking statements include, but are not limited to, those
discussed elsewhere in this prospectus, the accompanying prospectus supplement
and the documents incorporated by reference in this prospectus. You should not
put undue reliance on any forward-looking statements. We do not have any
intention or obligation to update forward-looking statements after we distribute
this prospectus.
6
<PAGE> 31
CITIGROUP INC.
Citigroup is a diversified holding company whose businesses provide a broad
range of financial services to consumer and corporate customers in more than 100
countries and territories. Citigroup's activities are conducted through Global
Consumer, Global Corporate and Investment Bank, Global Investment Management and
Private Banking, and Investment Activities.
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 and state bank regulatory authorities,
state insurance departments and securities regulators. Citigroup's subsidiaries
may be party to 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.
The principal office of Citigroup is located at 399 Park Avenue, New York,
NY 10043, and its telephone number is (212) 559-1000.
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<PAGE> 32
USE OF PROCEEDS AND HEDGING
General. Citigroup will use the proceeds it receives from the sale of the
offered securities for general corporate purposes, which may include
- funding the business of its operating units;
- funding investments in, or extensions of credit or capital contributions
to, its subsidiaries;
- financing of possible acquisitions or business expansion; and
- lengthening 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 similar instruments relating
to the relevant index or underlying assets. Citigroup may also use the proceeds
to pay the costs and expenses of hedging any currency, interest rate or other
index-related risk relating 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 position over time using techniques which help
evaluate the size of any hedge based upon a variety of factors affecting the
value of the underlying instrument. These factors may include the history of
price changes in that underlying instrument and the time remaining to maturity.
Citigroup may take long or short positions in the index, the underlying assets,
options, futures contracts, forward contracts, swaps, or other derivative or
similar instruments related to the index and the 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 similar 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 the 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 similar 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 the general corporate purposes described above.
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<PAGE> 33
EUROPEAN MONETARY UNION
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 could be issued by countries participating
in Stage III of 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. It is
anticipated that Greece will become an additional participating member state on
January 1, 2001.
Stage III includes the introduction of the Euro, which, along with the
present national currency of each participating member state, is legal tender in
the participating member states. 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.
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DESCRIPTION OF DEBT SECURITIES
The debt securities offered by this prospectus will be unsecured
obligations of Citigroup and will be either senior or subordinated debt. Senior
debt will be issued under a senior debt indenture. 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
the registration statement on Form S-3 (No. 333-49442) under the Securities Act
of 1933 of which this prospectus forms a part.
The following briefly summarizes the material provisions of the indentures
and the debt securities, other than pricing and related terms disclosed in the
accompanying prospectus supplement. You should read the more detailed provisions
of the applicable indenture, including the defined terms, for provisions that
may be important to you. You should also read the particular terms of a series
of debt securities, which will be described in more detail in the applicable
prospectus supplement. Copies of the indentures may be obtained from Citigroup
or the applicable trustee. So that you may easily locate the more detailed
provisions, 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, and the statements in this prospectus are
qualified by that reference.
Unless otherwise provided in the applicable prospectus supplement, the
trustee under the senior debt indenture will be The Bank of New York, and the
trustee under the subordinated debt indenture will be Bank One Trust Company,
N.A. (formerly The First National Bank of Chicago). Citigroup may, at its
option, appoint Citibank, N.A. to act as paying agent.
GENERAL
The indentures provide that unsecured senior or subordinated debt
securities of Citigroup may be issued in one or more series, with different
terms, in each case as authorized from time to time by Citigroup. Citigroup also
has the right to "reopen" a previous issue of a series of debt securities by
issuing additional debt securities of such series.
Federal income tax consequences and other special considerations applicable
to any debt securities issued by Citigroup at a discount will be described in
the applicable prospectus supplement.
Because Citigroup is a holding company, the claims of creditors of
Citigroup's subsidiaries will have a priority over Citigroup's equity rights and
the rights of Citigroup's creditors, including the holders of debt securities,
to participate in the assets of the subsidiary upon the subsidiary's
liquidation.
The applicable prospectus supplement relating to any series of debt
securities will describe the following terms, where applicable:
- the title of the debt securities;
- whether the debt securities will be senior or subordinated debt;
- the total principal amount of the debt securities;
- the percentage of the principal amount at which the debt securities will
be sold and, if applicable, the method of determining the price;
- the maturity date or dates;
- the interest rate or the method of computing the interest rate;
- the date or dates from which any interest will accrue, or how such date
or dates will be determined, and the interest payment date or dates and
any related record dates;
- if other than in United States dollars, the currency or currency unit in
which payment will be made;
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- if the amount of any payment 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 payable, the manner in which the amounts will be
determined;
- if any payments may be made at the election of Citigroup or a holder of
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;
- the location where payments on the debt securities will be made;
- the terms and conditions on which the debt securities may be redeemed at
the option of Citigroup;
- any obligation of Citigroup to redeem, purchase or repay the debt
securities at the option of a holder upon the happening of any event and
the terms and conditions of redemption, purchase or repayment;
- if other than the principal amount, the portion of the principal amount
of the debt securities payable if the maturity is accelerated;
- any provisions for the discharge of Citigroup's obligations relating to
the debt securities by deposit of funds or United States government
obligations;
- whether the debt securities are to trade in book-entry form and the terms
and any conditions for exchanging the global security in whole or in part
for paper certificates;
- the date of any global security 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).
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. The terms 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 may be
adjusted.
The debt securities will be issued only in registered form. As currently
anticipated, debt securities of a series will trade in book-entry form, and
global notes will be issued in physical (paper) form, as described below under
"Book-Entry Procedures and Settlement." 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 whole 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
the 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 New York City.
Holders 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 of transfer. (Section 2.05)
PAYMENT AND PAYING AGENTS
Distributions on the debt securities other than those represented by global
notes will be made in the designated currency against surrender of the debt
securities at the principal corporate trust office of the relevant trustee in
New York City. Payment will be made to the registered holder 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 New York City,
or by a check mailed to the holder at his registered address (Sections 2.01 and
5.02). Payments in any other manner will be specified in the prospectus
supplement.
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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 the default is cured
or waived or ceases to exist, Citigroup cannot make a payment on account of or
redeem or otherwise acquire the subordinated debt securities. Nevertheless,
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 that are subordinate, at least to the
same extent that the subordinated debt securities are subordinated to
Senior Indebtedness; and
- payments made from a defeasance trust as described below.
If there is any insolvency, bankruptcy, liquidation or other similar
proceeding relating to Citigroup, its creditors or its property, then all Senior
Indebtedness must be paid in full before any payment may 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 as described below, directly to the
holders of Senior Indebtedness until all Senior Indebtedness is 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;
(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 (1) any Junior Subordinated Debt, (2) any Capital Securities
Guarantees and (3) 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
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issuance by such financing vehicle of capital 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:
- 6 7/8% Junior Subordinated Deferrable Interest Debentures due March 15,
2029;
- 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 6 7/8% Capital Securities of Citigroup Capital VI;
- 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 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 with such series of senior debt securities, is secured 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;
- 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.
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"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 (1) Citigroup is the continuing corporation, or (2) the successor
corporation, if other than Citigroup, expressly assumes by supplemental
indenture the obligations evidenced by the securities issued pursuant to
the indenture and
- immediately after the 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.
No such modification may, without the consent of the holder of each
security so affected:
- 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 any securities issued originally at
a discount,
- change the currency in which any such securities are payable, or
- impair the right to sue for the enforcement of any such payment on or
after the maturity of such securities.
In addition, no such modification may:
- reduce the percentage of securities referred to above whose holders need
to consent to the modification without the consent of such holders; or
- change, 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).
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DEFAULTS
Each indenture provides that events of default regarding 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 scheduled installment payment, or
premium, if any, on any debt security of such series when due;
- failure to make any required scheduled installment payment 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 regarding 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 regarding one series of debt securities issued under an
indenture is necessarily an event of default regarding 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 regarding 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 regarding 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, except payment on such holder's debt security when due, the holders
of not less than 25% in principal amount of the debt securities of that series
outstanding must request the trustee to take action. Holders must also offer and
give the satisfactory security and indemnity against liabilities incurred by the
trustee for taking such action (Section 6.07).
DEFEASANCE
Senior Debt Indenture. If so specified when the senior debt securities of
a particular series are created, after Citigroup has deposited with the trustee
cash or government 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:
- will be deemed to have paid and satisfied its obligations on all
outstanding senior debt securities of such series, which is known as
"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, relating to the senior debt securities of such series, which
is known as "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.
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When there is a defeasance and discharge, (1) the senior debt indenture
will no longer govern the senior debt securities of such series, (2) Citigroup
will no longer be liable for payment and (3) 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 make
payments when due if the deposited funds are not sufficient.
The obligations and rights under the senior debt indenture regarding
compensation, reimbursement and indemnification of the trustee, optional
redemption, mandatory and optional scheduled installment 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 should
probably 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 federal income tax on the deemed exchange would be imposed on
a holder, the holder would not receive any cash until the maturity or an earlier
redemption of the senior debt securities, except for any current interest
payments.
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 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 federal income tax would be imposed on the holders 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 the material terms and provisions of the
index warrants, other than pricing and related terms disclosed in the
accompanying prospectus supplement. 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 referring to an index calculated on the basis
of prices, yields, levels or other specified objective measures in respect of:
- specified securities or securities indices;
- specified foreign currencies or currency indices;
- 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 or the happening of any other event
described in the prospectus supplement.
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.
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 or exercised early or cancelled. The amount due after any such delay
or postponement, or early exercise or cancellation, will be described 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.
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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 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, at 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 tax
advisors before purchasing any index warrants.
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.
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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;
- 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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<PAGE> 44
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of the date of this prospectus, Citigroup's authorized capital stock
consists of 10 billion shares of common stock and 30 million shares of preferred
stock. The following briefly summarizes the material terms of Citigroup's common
stock and outstanding preferred stock. You should read the more detailed
provisions of Citigroup's certificate of incorporation and the certificate of
designation relating to any series of preferred stock for provisions that may be
important to you.
COMMON STOCK
As of September 30, 2000, Citigroup had outstanding approximately 4.5
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 holders of the
shares of the outstanding Series K Preferred Stock, which is described below.
Holders of common stock may not cumulate their votes in the election of
directors, and are entitled to share equally in the dividends that may be
declared by the board of directors, 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 scheduled installment payment provisions relating 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 and the
Pacific Exchange.
PREFERRED STOCK
The general terms of Citigroup's preferred stock are described below under
"Description of Preferred Stock."
As of the date of this prospectus, Citigroup had outstanding the following
series of preferred stock with the following terms:
<TABLE>
<CAPTION>
NUMBER REDEMPTION DATE NEXT
OF SHARES DIVIDENDS PRICE PER REDEEMABLE GENERAL
TITLE OF SERIES OUTSTANDING PER YEAR SHARE ($) BY CITIGROUP VOTING RIGHTS
--------------- ----------- ---------------- ---------- --------------------- -------------
<S> <C> <C> <C> <C> <C>
6.365% Cumulative Preferred
Stock, Series F........... 1,600,000 6.365% 250 June 16, 2007 No
6.213% Cumulative Preferred
Stock, Series G........... 800,000 6.213% 250 July 11, 2007 No
6.231% Cumulative Preferred
Stock, Series H........... 800,000 6.231% 250 September 8, 2007 No
8.40% Cumulative Preferred
Stock, Series K........... 500,000 $42.00 500 March 31, 2001 Yes (6)
9.50% Cumulative Preferred
Stock, Series L........... --(1) 9.50% 500 June 30, 2001 Yes (6)
5.864% Cumulative Preferred
Stock, Series M........... 800,000 5.864% 250 October 8, 2007 No
Adjustable Rate Cumulative
Preferred Stock, Series
Q......................... 700,000 Variable Rate(2) 250 On any date No
Adjustable Rate Cumulative
Preferred Stock, Series
R......................... 400,000 Variable Rate(2) 250 On any date No
7 3/4% Cumulative Preferred
Stock, Series U........... 500,000 7.75% 250 On any date No
</TABLE>
20
<PAGE> 45
<TABLE>
<CAPTION>
NUMBER REDEMPTION DATE NEXT
OF SHARES DIVIDENDS PRICE PER REDEEMABLE GENERAL
TITLE OF SERIES OUTSTANDING PER YEAR SHARE ($) BY CITIGROUP VOTING RIGHTS
--------------- ----------- ---------------- ---------- --------------------- -------------
<S> <C> <C> <C> <C> <C>
Fixed Adjustable Rate
Cumulative Preferred
Stock, Series V........... 250,000 Variable Rate(3) 500 February 15, 2006(5) No
Cumulative Adjustable Rate
Preferred Stock, Series
Y......................... 2,262 Variable Rate(4) 100,000 On any payment date No
5.321% Cumulative Preferred
Stock, Series YY.......... 987 5.321% 1,000,000 December 22, 2018 No
</TABLE>
Where the above table indicates that the holders of the preferred stock
have no general voting rights, this means that they do not vote on matters
submitted to a vote of the common stockholders. However, the holders of this
preferred stock do have other special voting rights (1) that are required by
law, (2) that apply if there is a default in paying dividends for the equivalent
of six calendar quarters, in some cases whether or not consecutive and (3) when
Citigroup wants to create any class of stock having a preference as to dividends
or distributions of assets over such series or 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. These special voting rights
apply to all series of preferred stock listed above.
---------------
(1) The Series L Preferred Stock will be issuable upon the settlement of
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. Holders must settle the purchase contracts on June 30, 2021; however,
SSBH has the option to accelerate settlement to June 30, 2001.
(2) For each dividend period the dividend rate will be equal to 84% of the
Effective Rate, 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.
(3) 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
specified changes in the Internal Revenue Code that would decrease the
dividends received deduction applicable to corporate stockholders.
(4) 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 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.
(5) Prior to February 15, 2006, in the event of specified changes in the
Internal Revenue Code that would decrease the dividends received deduction
applicable to corporate stockholders, 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.
(6) Holders of shares of Series K and L Preferred Stock are entitled to three
votes per share, when voting as a class with the common stock, subject to
anti-dilution adjustment. In addition, holders of Series K 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 to some types of liquidation, merger and asset sale
transactions. Finally, without obtaining the approval of a majority of the
outstanding shares of Series K 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.
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<PAGE> 46
IMPORTANT PROVISIONS OF CITIGROUP'S CERTIFICATE OF INCORPORATION AND BY-LAWS
Business Combinations. The certificate of incorporation generally 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, to approve any merger or other business combination between
Citigroup and any interested stockholder, unless (1) the transaction has been
approved by a majority of the continuing directors of Citigroup or (2) minimum
price, form of consideration and procedural requirements are satisfied. An
"interested stockholder" as defined in the certificate of incorporation
generally means a person who owns at least 25% of the voting stock of Citigroup.
Amendments to Certificate of Incorporation and By-Laws. 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 is required to amend the provisions of the
certificate of incorporation relating to the issuance of preferred stock or
common stock. Amendments of provisions of the certificate of incorporation
relating to business combinations generally require a vote of the holders of
66 2/3% of the then outstanding shares of voting stock, 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. A "continuing director" as defined in the
certificate of incorporation generally means a director who is not related to an
interested stockholder who held that position before an interested stockholder
became an interested stockholder.
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, so long as a quorum is present. 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. Any director elected to fill a vacancy that did not
result from increasing the size of the board of directors shall hold office for
a term coinciding with the predecessor director's remaining term.
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<PAGE> 47
DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes the material terms of Citigroup's
preferred stock, other than pricing and related terms disclosed in the
accompanying prospectus supplement. 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, together with the
more detailed provisions of Citigroup's restated certificate of incorporation
and the certificate of designation relating to each particular series of
preferred stock for provisions that may be important to you. The certificate of
incorporation, as amended, is incorporated by reference into the registration
statement of which this prospectus forms a part. The certificate of designation
relating to the particular series of preferred stock offered by the accompanying
prospectus supplement and this prospectus will be filed as an exhibit to a
document incorporated by reference in the registration statement. The prospectus
supplement will also state whether any of the terms summarized below do not
apply to the series of preferred stock being offered. For a description of
Citigroup's outstanding preferred stock, see "Description of Capital Stock."
Under Citigroup's 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 the series;
- the designation, powers, preferences and rights of the shares of the
series; and
- the qualifications, limitations or restrictions of such series.
Prior to the issuance of any series of preferred stock, the board of
directors of Citigroup will adopt resolutions creating and designating the
series as a series of preferred stock and the resolutions will be filed in a
certificate of designation as an amendment to the certificate of incorporation.
The term "board of directors of Citigroup" includes any duly authorized
committee.
The rights of holders of the preferred stock offered 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 for any proper corporate purpose.
Examples of proper corporate purposes include issuances to obtain additional
financing in connection with acquisitions or otherwise, and issuances 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 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, 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 regulated as a "bank holding
company" in accordance with the Bank Holding Company Act. 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;
and
- any person other than a bank holding company may be required to obtain
the approval of the Federal Reserve Board under the Change in Bank
Control Act to acquire or retain 10% or more 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 if then required by
applicable law.
The preferred stock will be, when issued, fully paid and nonassessable.
Holders of preferred stock will not have any preemptive or subscription rights
to acquire more stock of Citigroup.
23
<PAGE> 48
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 an equal basis
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 dividends. The rates and dates of payment of
dividends will be set forth in the prospectus supplement relating to each 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.
Citigroup may not declare, pay or set apart for payment dividends on the
preferred stock unless full dividends on other series of preferred stock that
rank on an equal or senior basis have been paid or sufficient funds have been
set apart for payment for
- all prior dividend periods of other series of preferred stock that pay
dividends on a cumulative basis; or
- the immediately preceding dividend period of other series of preferred
stock that pay dividends on a noncumulative basis.
Partial dividends declared on shares of preferred stock and any other
series of preferred stock ranking on an equal basis as to dividends will be
declared pro rata. A pro rata declaration means that the ratio of dividends
declared per share to accrued dividends per share will be the same for both
series of preferred stock.
Similarly, Citigroup may not declare, pay or set apart for payment
non-stock dividends or make other payments on the common stock or any other
stock of Citigroup ranking junior to the preferred stock until full dividends on
the preferred stock have been paid or set apart for payment for
- all prior dividend periods if the preferred stock pays dividends on a
cumulative basis; or
- the immediately preceding dividend period if the preferred stock pays
dividends on a noncumulative basis.
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.
REDEMPTION
If so specified in the applicable prospectus supplement, 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 mandatorily redeemed.
Any partial redemptions of preferred stock will be made in a way that the
board of directors decides is equitable.
Unless Citigroup defaults in the payment of the redemption price, dividends
will cease to accrue after the redemption date 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.
24
<PAGE> 49
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
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 relating to liquidation,
including common stock.
If the liquidation amounts payable relating to the preferred stock of any
series and any other securities ranking on a parity regarding 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 available assets of
Citigroup on a ratable basis in proportion to the full liquidation preferences.
Holders of such series of preferred stock will not be entitled to any other
amounts from Citigroup after they have received their full liquidation
preference.
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.
25
<PAGE> 50
DESCRIPTION OF DEPOSITARY SHARES
The following briefly summarizes the material provisions of the deposit
agreement and of the depositary shares and depositary receipts, other than
pricing and related terms disclosed in the accompanying prospectus supplement.
You should read the particular terms of any depositary shares and any depositary
receipts that are offered by Citigroup and any deposit agreement relating to a
particular series of preferred stock which will be described in more detail in a
prospectus supplement. The prospectus supplement will also state whether any of
the generalized provisions summarized below do not apply to the depositary
shares or depositary receipts being offered. 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. You should read the more detailed provisions of the deposit
agreement and the form of depositary receipt for provisions that may be
important to you.
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, as
preferred stock depositary. Each owner of a depositary share will be entitled to
all the rights and preferences of the underlying preferred stock, including
dividend, voting, redemption, conversion and liquidation rights, in proportion
to the applicable fraction of a share of preferred stock represented by such
depositary share.
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.
The preferred stock depositary will distribute any property received by it
other than cash 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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<PAGE> 51
WITHDRAWAL OF PREFERRED STOCK
Unless the related depositary shares have previously been called for
redemption, any holder of depositary shares may receive the number of whole
shares of the related series of preferred stock and any money or other property
represented by such depositary receipts after surrendering the depositary
receipts at the corporate trust office of the preferred stock depositary.
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, which has been
amended thereby. The deposit agreement automatically terminates if:
- all outstanding depositary shares have been redeemed;
- each share of preferred stock has been converted into or exchanged for
common stock; or
- a final distribution in respect of the preferred stock has been made to
the holders of depositary shares in connection with any liquidation,
dissolution or winding up of Citigroup.
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 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.
27
<PAGE> 52
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.
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 with honest intentions 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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<PAGE> 53
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Most series of debt securities and index warrants will be book-entry
securities. Upon issuance, all book-entry securities of the same issue will be
represented by one or more fully registered global securities, without interest
coupons. Each global security will be deposited with, or on behalf of, The
Depository Trust Company, a securities depository, and will be registered in the
name of DTC or a nominee of DTC. DTC will thus be the only registered holder of
these debt securities or index warrants and will be considered the sole owner of
the securities for purposes of the indenture or index warrant agreement.
Purchasers may only hold interests in the global notes or index warrants
through DTC if they are a participant in the DTC system. Purchasers may also
hold interests through a securities intermediary -- banks, brokerage houses and
other institutions that maintain securities accounts for customers -- that has
an account with DTC or its nominee. DTC will maintain accounts showing the
securities holdings of its participants, and these participants will in turn
maintain accounts showing the securities holdings of their customers. Some of
these customers may themselves be securities intermediaries holding debt
securities or index warrants for their customers. Thus, each beneficial owner of
a book-entry security will hold that security indirectly through a hierarchy of
intermediaries, with DTC at the "top" and the beneficial owner's own securities
intermediary at the "bottom."
The securities of each beneficial owner of a book-entry security will be
evidenced solely by entries on the books of the beneficial owner's securities
intermediary. The actual purchaser of the securities will generally not be
entitled to have the securities represented by the global securities registered
in its name and will not be considered the owner under the indenture or index
warrant agreement. In most cases, a beneficial owner will also not be able to
obtain a paper certificate evidencing the holder's ownership of securities. The
book-entry system for holding securities eliminates the need for physical
movement of certificates and is the system through which most publicly traded
common stock is held in the United States. However, the laws of some
jurisdictions require some purchasers of securities to take physical delivery of
their securities in definitive form. These laws may impair the ability to
transfer book-entry securities.
A beneficial owner of book-entry securities represented by a global
security may exchange the securities for definitive (paper) securities only if:
(a) DTC is unwilling or unable to continue as depositary for such global
security and Citigroup is unable to find a qualified replacement for
DTC within 90 days;
(b) at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934; or
(c) Citigroup in its sole discretion decides to allow some or all
book-entry securities to be exchangeable for definitive securities in
registered form.
Unless we indicate otherwise in the applicable prospectus supplement, any
global security that is exchangeable will be exchangeable in whole for
definitive securities in registered form, with the same terms and of an equal
aggregate principal amount, in denominations of $1,000 and whole multiples of
$1,000. Definitive notes or index warrants will be registered in the name or
names of the person or persons specified by DTC in a written instruction to the
registrar of the securities. DTC may base its written instruction upon
directions it receives from its participants.
In this prospectus and the accompanying prospectus supplement, for
book-entry securities, references to actions taken by security holders will mean
actions taken by DTC upon instructions from its participants, and references to
payments and notices of redemption to security holders and notices of redemption
to DTC as the registered holder of the securities for distribution to
participants in accordance with DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, 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 under section 17A of the Securities Exchange Act of 1934. The
rules applicable to DTC and its participants are on file with the SEC.
Citigroup 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 book-entry securities or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
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<PAGE> 54
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 relating 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 offered either 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 underwriters will not be obligated to purchase
offered securities unless specified conditions are satisfied, and if the
underwriters do purchase any offered securities, they will purchase all offered
securities.
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, each of
which is described below.
- 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.
These 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 prices to be
30
<PAGE> 55
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 to that transaction.
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 to that offering. 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, including Salomon Smith Barney
Inc., are members of the National Association of Securities Dealers, Inc. 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,
including block positioning and block trades, 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 relating to material misstatements
and omissions. 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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<PAGE> 56
ERISA MATTERS
Citigroup has subsidiaries, including insurance company subsidiaries and
broker-dealer subsidiaries, that provide services to many employee benefit
plans. 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, and a "disqualified person" under corresponding
provisions of the Internal Revenue Code of 1986, relating 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 as 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 to which such
provisions of ERISA or the Code apply proposing to acquire the offered
securities should consult with its legal counsel.
LEGAL MATTERS
Stephanie B. Mudick, Esq., Deputy General Counsel of Citigroup, 399 Park
Avenue, New York, New York 10043 and/or Skadden, Arps, Slate, Meagher & Flom
LLP, New York, New York, or counsel to be identified in the applicable
prospectus supplement, will act as legal counsel to Citigroup. Ms. Mudick
beneficially owns, or has rights to acquire under Citigroup's employee benefit
plans, an aggregate of less than 1% of Citigroup's common stock. Dewey
Ballantine LLP, New York, New York, or other counsel identified in the
applicable prospectus supplement, will act as legal counsel to the underwriters.
Dewey Ballantine LLP has from time to time acted as counsel for Citigroup and
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 of Citigroup Inc. as of December 31,
1999 and 1998, and for each of the years in the three-year period ended December
31, 1999, have been audited by KPMG LLP, independent certified public
accountants, as set forth in their report on the consolidated financial
statements. The consolidated financial statements are included in Citigroup's
annual report on Form 10-K for the year ended December 31, 1999, as amended, and
incorporated by reference in this prospectus. The report of KPMG LLP also is
incorporated by reference in this prospectus. The report of KPMG LLP covering
the December 31, 1999 consolidated financial statements refers to changes, in
1999, in Citigroup's methods of accounting for insurance-related assessments,
accounting for insurance and reinsurance contracts that do not transfer
insurance risk, and accounting for the costs of start-up activities. The
consolidated financial statements of Citigroup referred to above are
incorporated by reference in this prospectus in reliance upon such report and
upon the authority of that firm 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.
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<PAGE> 57
PRINCIPAL OFFICE OF
CITIGROUP INC.
399 PARK AVENUE
NEW YORK, NEW YORK 10043
TRUSTEE
BANK ONE TRUST COMPANY, N.A.
1 BANK ONE PLAZA
CHICAGO, ILLINOIS 60670
LUXEMBOURG STOCK EXCHANGE LISTING AGENT
AND LUXEMBOURG PAYING AGENT AND TRANSFER AGENT
BANQUE INTERNATIONALE A LUXEMBOURG S.A.
69, ROUTE D'ESCH
L-2953 LUXEMBOURG
LEGAL ADVISERS
TO CITIGROUP INC. AS TO
UNITED STATES LAW
STEPHANIE B. MUDICK, ESQ.
DEPUTY GENERAL COUNSEL
CITIGROUP INC.
399 PARK AVENUE
NEW YORK, NEW YORK 10043
SPECIAL UNITED STATES TAX COUNSEL TO
CITIGROUP INC.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036
TO THE UNDERWRITERS
AS TO UNITED STATES LAW
DEWEY BALLANTINE LLP
1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
INDEPENDENT AUDITORS OF CITIGROUP INC.
KPMG LLP
345 PARK AVENUE
NEW YORK, NEW YORK 10154
<PAGE> 58
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$1,250,000,000
7.250% SUBORDINATED NOTES DUE 2010
[CITIGROUP LOGO]
------------------------
PROSPECTUS SUPPLEMENT
NOVEMBER 30, 2000
------------------------
SALOMON SMITH BARNEY
<TABLE>
<S> <C>
ABN AMRO INCORPORATED BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC. CHASE SECURITIES INC.
MURIEL SIEBERT & CO., INC. THE WILLIAMS CAPITAL GROUP, L.P.
</TABLE>
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