As filed with the Securities and Exchange
Commission on February 11, 2011
Registration No. 333-154914
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
Post-Effective Amendment
No. 2 to
FORM S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
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Citigroup Funding Inc.
Citigroup Inc.
Safety First Trust Series 2007-2
Safety First Trust Series 2007-3
Safety First Trust Series 2007-4
Safety First Trust Series 2008-1
Safety First Trust Series 2008-2
Safety First Trust Series 2008-3
Safety First Trust Series 2008-4
Safety First Trust Series 2008-5
Safety First Trust Series 2008-6
Safety First Trust Series 2008-7
Safety First Trust Series 2009-1
Safety First Trust Series 2009-2
Safety First Trust Series 2009-3
Safety First Trust Series 2009-4
Safety First Trust Series 2009-5
Safety First Trust Series 2009-6
Safety First Trust Series 2009-7
Safety First Trust Series 2009-8
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Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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42-1658283
52-1568099
42-6664146
42-6664147
42-6664148
42-6664149
42-6664150
42-6664151
42-6664152
42-6664153
94-6794956
94-6794959
94-6794960
94-6794962
94-6794963
94-6794965
94-6794967
94-6794969
94-6794971
94-6794972
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(Exact name of registrant as specified in charter)
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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399 Park Avenue
New York, New York
10043
(212) 559-1000
(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)
Julie Bell Lindsay,
Esq.
General Counsel
Capital Markets and Corporate Reporting
Citigroup Inc.
399 Park Avenue
New York, New York
10043
(212) 559-1000
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copy to:
Jeffrey D. Karpf, Esq.
Cleary Gottlieb Steen &
Hamilton LLP
One Liberty Plaza
New York, New York
10006
(212) 225-2000
Approximate date of commencement
of proposed sale to the
public:
At
such time (from time to time) after the effective date of this
Registration Statement.
If
the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box:
o
If
any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following
box:
þ
If
this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.
o
If
this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering.
o
If
this Form is registration statement pursuant to General
Instruction I.D. or post-effective amendment thereto that shall
become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act, check the following
box.
þ
If
this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act,
check the following
box.
o
Indicate
by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and
smaller reporting company in Rule 12b-2 of the
Exchange Act.
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Large accelerated
filer
þ
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Accelerated
filer
o
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Non-accelerated
filer
o
(Do not check if a smaller reporting company)
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Smaller reporting
company
o
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(continued on the following
page)
CALCULATION OF REGISTRATION
FEE
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Proposed maximum
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Proposed maximum
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Title of each class of
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offering price
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aggregate
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Amount of
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securities to be registered
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Amount to be registered(1)(2)
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per unit(1)
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offering price(1)
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registration fee(3)
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Trust Certificates (the Certificates)
of the Trusts
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Guarantees of Citigroup Funding Inc.
with respect to the Certificates of
the Trusts(4)
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Guarantees of Citigroup Inc.(5)
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Total
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$100,000,000(6)
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$11,610(3)
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(1)
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The amount to be registered,
proposed maximum offering price per unit and proposed maximum
aggregate offering price for each class of securities will be
determined from time to time in connection with the issuance of
the securities registered hereby and is not specified as to each
class of securities pursuant to General Instruction II.D of
Form S-3
under the Securities Act of 1933, as amended, and
Rule 457(o) under the Securities Act.
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(2)
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Includes an indeterminate number of
securities registered hereby that may be offered or sold by
affiliates of the Registrants in market-making transactions.
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(3)
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Calculated pursuant to
Rule 457(o) under the Securities Act. In accordance with
Rule 457(f), no filing fee is required for the registration
of an indeterminate number of securities that may be offered or
sold by affiliates of the Registrants in market-making
transactions.
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(4)
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Includes the rights of holders of
the Certificates under any guarantees and certain back-up
undertakings, comprised of the obligations of Citigroup Funding
Inc. to provide certain indemnities in respect of, and pay and
be responsible for certain costs, expenses, debts and
liabilities of, each Trust (other than with respect to the
Certificates) and such obligations of Citigroup Funding Inc. as
set forth in the amended and restated declaration of trust of
each Trust, in each case as further described in the
Registration Statement. No separate consideration has been
received or will be received for any guarantees or such back-up
obligations.
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(5)
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No separate consideration will be
received for the Citigroup Inc. Guarantees.
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(6)
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The aggregate public offering price
of the securities registered hereby (excluding the securities
that are registered hereby solely for purposes of market-making
transactions) will not exceed $100,000,000 or the equivalent
thereof in one or more foreign currencies, foreign currency
units or composite currencies.
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EXPLANATORY
NOTE
This Post-Effective Amendment No. 2 to the Registration
Statement on
Form S-3
(File
No. 333-154914)
is being filed to include information that is required to be
included in the registration statement by such form for
registrants who are no longer well-known seasoned issuers, as
defined in Rule 405 under the Securities Act of 1933, as
amended.
The
information in this prospectus and pricing supplement is not
complete and may be changed. A registration statement relating
to these securities has been filed with the Securities and
Exchange Commission. This prospectus and pricing supplement is
not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any state where the offer or
sale is not permitted.
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SUBJECT TO COMPLETION,
DATED ,
2011
TRUST CERTIFICATES PROSPECTUS
Medium-Term Notes, Series D, Pricing Supplement
No. 2011
[ ],
Dated ,
2011
Index Warrants,
Series W-A,
Pricing Supplement No. 2011
[ ],
Dated ,
2011
Safety First
Trust Series [2009-4]
Trust Certificates
Linked to the S&P
500
®
Index
Due ,
$10.00 per
Certificate
Any Payments Due from Safety
First
Trust Series [2009-4]
Guaranteed by Citigroup
Funding Inc.
Any Payments Due from Citigroup
Funding Inc.
Guaranteed by Citigroup
Inc.
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We will not make any periodic payments on the certificates.
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The certificates will mature
on ,
2013. You will receive at maturity for each certificate you hold
an amount in cash equal to $10 plus a supplemental distribution
amount, which may be positive or zero.
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The supplemental distribution amount will be based on the
percentage change of the S&P
500
®
Index during the term of the certificates.
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If the ending value, the closing value of the S&P
500
®
Index on the third index business day before maturity (which we
refer to as the valuation date), exceeds the starting value, the
closing value of the S&P
500
®
Index on the date on which the certificates are priced for
initial sale to the public (which we refer to as the pricing
date), the supplemental distribution amount for each certificate
will equal the product of (a) $10, (b) the percentage
increase in the value of the S&P
500
®
Index and (c) the participation rate, which is expected to
be approximately 80% to 90% (to be determined on the pricing
date).
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If the ending value is less than or equal to the starting value,
the supplemental distribution amount for each certificate will
equal zero.
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The certificates are preferred securities of Safety First
Trust Series [2009-4]
(which we refer to as the trust). The assets of the trust will
consist of Citigroup Fundings equity index participation
securities and equity index warrants.
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The equity index participation securities will mature
on ,
2013. At maturity, each security will pay an amount equal to $10
plus a security return amount, which could be positive, zero or
negative. If the ending value is greater than the starting
value, the security return amount for each security will equal
the product of (a) $10, (b) the percentage increase in
the S&P
500
®
Index and (c) the participation rate. If the ending value
is less than or equal to the starting value, the security return
amount for each security will equal the product of (a) $10
and (b) the percentage decrease in the S&P
500
®
Index. Because your participation in the depreciation of the
S&P
500
®
Index is not limited by the participation rate, if the ending
value is less than the starting value, you will participate
fully in the depreciation of the S&P
500
®
Index.
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The equity index warrants will be automatically exercised
on ,
2013. If the ending value of the S&P
500
®
Index is greater than or equal to the starting value, the
warrants will pay zero. If the ending value of the S&P
500
®
Index is less than the starting value, the warrants will pay a
positive amount equal to the product of (a) $10 and
(b) the percentage decrease in the value of the S&P
500
®
Index.
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Exchange Right: You will have the right to exchange, at any time
beginning on the date on which the certificates are issued and
ending on the date that is one business day prior to the
valuation date, each $10 principal amount of certificates you
then hold for one equity index participation security with a $10
face amount and one equity index warrant with a $10 notional
amount. The securities and warrants will be separately
transferable by you after you exercise your exchange right. In
order to exercise your exchange right, your brokerage account
must be approved for options trading. You should consult with
your financial advisor to determine whether your brokerage
account would meet the options trading requirements. If you
choose to exercise your exchange right and hold only the
securities or only the warrants, you may receive less than the
principal amount of your investment at maturity.
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We will apply to list the certificates on NYSE Arca under the
symbol [ ].
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Investing in the certificates, securities or warrants
involves a number of risks. See Risk Factors
beginning on page 10.
Standard &
Poors
®
,
Standard &
Poors
®
500,
S&P
®
and S&P
500
®
are trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use for certain purposes by Citigroup Funding Inc.
or one of its affiliates. None of the certificates, the equity
index participation securities or the equity index warrants have
been passed on by Standard & Poors or The
McGraw-Hill Companies. None of the certificates, the equity
index participation securities or the equity index warrants are
sponsored, endorsed, sold or promoted by Standard &
Poors or The McGraw-Hill Companies and neither makes any
warranties or bears any liability with respect to any of the
certificates, the equity index participation securities or the
equity index warrants.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the
certificates, the securities or the warrants or determined that
this prospectus and pricing supplement is truthful or complete.
Any representation to the contrary is a criminal offense.
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Per
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Certificate
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Total
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Public Offering Price
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$
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10.000
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*
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$
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Underwriting Discount (to be paid by Citigroup Funding Inc.)
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$
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$
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Proceeds to Safety First
Trust Series [2009-4]
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$
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$
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*
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$
represents the purchase price of the equity index participation
securities and $ represents the
purchase price of the equity index warrants.
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Citigroup Global Markets Inc. expects to deliver the
certificates to purchasers on or
about ,
2011.
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Investment Products
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Not FDIC Insured
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May Lose Value
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No Bank Guarantee
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,
2011
SUMMARY
INFORMATION Q&A
This prospectus and pricing supplement, which we refer to as
the offering document, constitutes a prospectus relating to the
Trust Certificates of Safety First
Trust Series [2009-4],
a medium-term note pricing supplement relating to the equity
index participation securities of Citigroup Funding Inc. and an
index warrant pricing supplement relating to the equity index
warrants of Citigroup Funding Inc. Citigroup Funding Inc. and
Citigroup Inc. have previously filed a registration statement
(File Nos.
333-157386
&
333-157386-01)
and prospectus supplements relating to the equity index
participation securities and the equity index warrants.
The
Certificates
What Is
Safety First
Trust Series [2009-4]?
Safety First
Trust Series [2009-4]
is a Delaware statutory trust. Citigroup Funding will own all of
the common securities of the trust.
The trust will not engage in any activities except:
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issuing the certificates and the common securities, which we
refer to as, collectively, the trust securities,
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investing approximately % of the
proceeds of the offering in equity index participation
securities linked to the S&P
500
®
Index issued by Citigroup Funding, which we refer to as the
securities,
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investing approximately % of the
proceeds of the offering in equity index warrants linked to the
S&P 500
®
Index issued by Citigroup Funding, which we refer to as the
warrants, and
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activities incidental to the above.
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The trust will not issue any securities except the trust
securities, which are limited
to
certificates and 100 common securities, each in denominations of
$10.
The trust will be managed by trustees elected by Citigroup
Funding, as the holder of the common securities. The holders of
the certificates have no right to elect or remove trustees.
Citigroup Funding will pay all costs, expenses, debts and
liabilities of the trust, including fees and expenses related to
the offering of the certificates, but not including payments
under the certificates.
The address and telephone number of the trust are:
Safety First
Trust Series [2009-4]
c/o Citigroup
Funding Inc.
399 Park Avenue
New York, New York 10043
(212) 559-1000
What Are
the Certificates?
The certificates are preferred undivided interests in the trust.
The certificates mature
on ,
2013, but will be subject to acceleration to an earlier maturity
date upon the occurrence of one of the acceleration events
described below. If an acceleration event occurs or Citigroup
Funding or Citigroup Inc. defaults on its guarantee, holders of
the certificates will have a preference over holders of the
common securities for payments.
The return on the certificates, if any, and the maturity payment
are linked to the value of the S&P
500
®
Index during the period after the pricing date up to and
including the valuation date. The certificates pay an amount at
maturity that will depend on the amount by which (i) the
ending value, the closing value of the S&P
500
®
Index on the valuation date, exceeds (ii) the starting
value, the closing value of the S&P
500
®
Index on the pricing date, expressed as a percentage. If the
ending value is less than or equal to the starting value, the
payment you receive at maturity for each certificate you hold
will equal $10, the amount of your original investment in the
certificates. If the ending value is greater than the starting
value, the payment you receive at maturity will be greater than
the amount of your original investment in the certificates;
however, as a result of the participation rate, the payment you
receive at maturity will be less than the payment you would
receive on an instrument directly linked to the S&P
500
®
Index.
2
You will have the right to exchange, at any time beginning on
the date on which the certificates are issued and ending on the
date that is one business day prior to the valuation date, each
certificate for a
pro rata
portion of the assets of the
trust, which consist of the securities and the warrants. In
order to exercise your exchange right, you will need to follow
the procedures described in Description of the
Certificates Exchange Right in this offering
document. In order to exercise your exchange right, your
brokerage account must be approved for options trading. You
should consult with your financial advisor to determine whether
your brokerage account would meet the options trading
requirements. If you choose to exercise your exchange right and
hold only the securities or only the warrants, you may receive
less than the principal amount of your investment at maturity.
Will I
Receive Any Periodic Payments on the Certificates?
No. You will not receive any periodic payments of interest on
the certificates or any other periodic payments on the
certificates. In addition, you will not be entitled to receive
dividend payments or other distributions, if any, made on the
stocks included in the S&P
500
®
Index.
What Will
I Receive at Maturity of the Certificates?
The certificates will mature
on ,
2013. At maturity, you will receive for each
certificate you hold an amount in cash equal to the sum of $10
and a supplemental distribution amount, which may be positive or
zero. The amount payable to you at maturity is dependent upon
the closing value of the S&P
500
®
Index on the valuation date, provided, however, that the payment
you receive at maturity will not be less than the amount of your
original investment in the certificates. The trust will make the
maturity payment with respect to each certificate out of the
payments it receives from Citigroup Funding on the securities
and the warrants. The ability of the trust to make the maturity
payment is entirely dependent on the receipt by the trust of
payments under the securities and the warrants. You should refer
to the section Description of the Certificates
Payment at Maturity in this offering document.
How Will
the Supplemental Distribution Amount Be Calculated?
The supplemental distribution amount will be based on the amount
by which the ending value of the S&P
500
®
Index exceeds the starting value, expressed as a percentage, and
on the participation rate. The supplemental distribution amount
will equal the product of (a) $10, (b) the index
return (defined below) and (c) the participation rate,
which is expected to be approximately 80% to 90% (to be
determined on the pricing date) of the index return. The
supplemental distribution amount will not be less than zero.
The amount payable to you at maturity is dependent upon the
performance of the S&P
500
®
Index during the period after the pricing date up to and
including the valuation date. If the ending value of the
S&P
500
®
Index is less than or equal to the starting value, the
supplemental distribution amount will be zero and the payment at
maturity will equal your original investment in the
certificates. If the ending value of the S&P
500
®
Index is greater than the starting value, the supplemental
distribution amount will be positive and the payment at maturity
will be greater than your original investment in the
certificates. However, as a result of the participation rate,
the certificates will provide less opportunity for appreciation
than an investment in an instrument directly linked to the
S&P
500
®
Index.
For more specific information about the supplemental
distribution amount and the index return, and
for information on the effect of a market disruption event on
the determination of the supplemental distribution amount and
the index return, please see How Is the Index
Return Defined? in this section and Description of
the Certificates Supplemental Distribution
Amount in this offering document.
3
How Is
the Index Return Defined?
The index return, which is presented in this offering document
as a percentage, will equal the following fraction:
Ending Value Starting Value
Starting Value
The starting value will be the closing value of the S&P
500
®
Index on the pricing date.
The ending value will be the closing value of the S&P
500
®
Index on the valuation date.
The pricing date means the date on which the certificates are
priced for initial sale to the public.
The valuation date will be the third index business day before
the maturity date.
Are
Payments on the Certificates Guaranteed?
The ability of the trust to make the maturity payment on the
certificates is entirely dependent on the receipt by the trust
of payments under the securities and the warrants, the sole
assets of the trust. Citigroup Funding has fully and
unconditionally guaranteed the trusts payment obligations
under the certificates so that, if for any reason the trust does
not make payments to you on the certificates, then Citigroup
Funding will make the payments directly to you to the extent
that the trust has funds legally available. In addition,
Citigroup Inc. has fully and unconditionally guaranteed all
payments by Citigroup Funding to the same extent and in the same
manner as Citigroup Funding has guaranteed the trusts
obligations under the certificates. We refer to Citigroup
Fundings and Citigroup Inc.s guarantees under the
certificates as the certificate guarantee. You should refer to
the section Description of the Certificate Guarantee
in this offering document for more information about the
certificate guarantee.
Citigroup Inc. has also fully and unconditionally guaranteed
Citigroup Fundings payment obligations under each of the
securities and the warrants.
Where Can
I Find Examples of Hypothetical Maturity Payments?
For a table setting forth hypothetical maturity payments, see
Description of the Certificates Maturity
Payment Hypothetical Examples in this offering
document.
What Will
I Receive if I Exercise My Exchange Right?
If you exercise your exchange right, you will receive a
pro
rata
portion of the assets of the trust, which consist of
the securities and the warrants. As a result, you will receive
for each $10 principal amount of certificates you then hold one
security with a $10 face amount and one warrant with a $10
notional amount. If you hold the securities and warrants
together until maturity, you will receive the same maturity
payment you would have received under the certificates. However,
if you choose to exercise your exchange right and hold only the
securities or only the warrants, you may receive less than the
principal amount of your investment at maturity. In this case,
the payment you receive at maturity may be different from the
maturity payment on the certificates and could be substantially
less than the amount of your original investment in the
certificates. In order to exercise your exchange right, you will
need to follow the procedures described in Description of
the Certificates Exchange Right in this
offering document.
What
Happens if I Exercise My Exchange Right?
If you exercise your exchange right and hold only the securities
or only the warrants, you may receive less than the principal
amount of your investment at maturity and your investment will
be subject to additional risks. For more information on these
additional risks, you should refer to Risk
Factors Risks Relating to the Securities and
Risks Relating to the Warrants. In order
to exercise your exchange right, your account must be approved
for options trading. You should consult with your financial
advisor to determine whether your account would meet the options
trading requirements.
If you do not exercise your exchange right, any gain that you
recognize at maturity or on other disposition of the
certificates will be short-term capital gain. You cannot
recognize long-term capital gain from your investment in
4
the certificates unless you exercise your exchange right, then
dispose of either the securities or the warrants, and then hold
the remaining instrument for more than one year after that
disposition. For example, if the value of the S&P
500
®
Index increases, you will recognize long-term capital gain only
if you exercise your exchange right, dispose of the warrants,
and hold the securities for more than one year after disposing
of the warrants. As discussed above, however, if you choose to
exercise your exchange right and hold only the securities or
only the warrants, you may receive less than the principal
amount of your investment at maturity.
What
Happens if an Acceleration Event Occurs?
If one of the acceleration events described below occurs, the
trust will be liquidated. You will receive for each certificate
the accelerated maturity payment. The accelerated maturity
payment per certificate will be calculated in the same manner as
the maturity payment and as though the date on which the
acceleration event occurred were the maturity date.
You will receive payment before holders of the common securities
if an acceleration event occurs or Citigroup Funding or
Citigroup Inc. defaults on any of its obligations under its
guarantee.
Any of the following will constitute an acceleration event:
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the occurrence of certain adverse tax consequences to the trust,
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the classification of the trust as an investment
company under the Investment Company Act of 1940, or
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the initiation of bankruptcy proceedings regarding Citigroup
Funding or Citigroup Inc.
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What Are
My Voting Rights?
You will have limited voting rights with respect to the trust
and will not be entitled to vote to appoint, remove or replace,
or increase or decrease the number of, the trustees. These
voting rights will be held exclusively by Citigroup Funding, as
the holder of the common securities. You will, however, have the
right to direct U.S. Bank National Association, as
institutional trustee of the trust and as holder of the
securities and the warrants, to exercise its rights as trustee,
including exercising its rights in respect of the securities and
the warrants.
You will have no voting rights and no ownership interest in any
stocks included in the S&P
500
®
Index.
Who
Publishes the S&P
500
®
Index and What Does It Measure?
Unless otherwise stated, all information on the S&P
500
®
Index provided in this pricing supplement is derived from
Standard & Poors, which we refer to as S&P,
or other publicly available sources. The S&P
500
®
Index is published by S&P and is intended to provide an
indication of the pattern of common stock price movements. The
calculation of the value of the S&P
500
®
Index is based on the relative value of the aggregate market
value of the common stocks of 500 companies as of a
particular time compared to the aggregate average market value
of the common stocks of 500 similar companies during the base
period of the years 1941 through 1943. As of January 25,
2011, the aggregate market value of the 500 companies
included in the S&P
500
®
Index represented approximately 75% of the U.S. equities
market. For further information on the S&P
500
®
Index, including its makeup, method of calculation and changes
in its components, see Description of the S&P
500
®
Index in this offering document.
How Has
the S&P
500
®
Index Performed Historically?
We have provided a table showing the high and low closing values
and the quarter-end closing values of the S&P
500
®
Index for each quarter in the period from January 2, 2006
to January 25, 2011 as well as a graph showing the daily
closing values of the S&P
500
®
Index from January 2, 2006 to January 25, 2011. You
can find the table and the graph in the section
Description of the S&P
500
®
Index Historical Data on the S&P
500
®
Index in this offering document. We have provided this
historical information to help you evaluate the behavior of the
S&P
500
®
Index in recent years. However, past performance is not
indicative of how the S&P
500
®
Index will perform in the future. You should also refer to the
section Risk Factors The Historical
Performance of the Underlying Index Is Not an Indication of the
Future Performance of the Underlying Index in this pricing
supplement.
5
What Are
the Tax Consequences of Investing in the Certificates?
For U.S. federal income tax purposes, the trust will be
treated as a grantor trust. Accordingly, you will be treated as
owning a
pro rata
portion of the assets of the trust and
receiving income received by the trust in the manner set forth
below.
For U.S. federal income tax purposes, you and the trust
agree to treat (i) the security and the warrant as two
separate financial instruments; (ii) each security as a
cash-settled variable prepaid forward contract with respect to
the S&P
500
®
Index under which at the time of issuance of the certificates,
you pay Citigroup Funding, with respect to the security, the
issue price in consideration for Citigroup Fundings
obligation to deliver to you at maturity of the security a cash
amount equal to $10 plus a security return amount (which may be
positive, zero, or negative) based upon the performance of the
S&P
500
®
Index, in full satisfaction of its obligation under such forward
contract; and (iii) each warrant as a cash-settled put
option with respect to the S&P
500
®
Index under which at the time of issuance of the certificates,
with respect to the warrant, you pay Citigroup Funding the
option premium in consideration for the right to sell to
Citigroup Funding at expiration of the warrant, for a cash
amount equal to $10, a notional position in the S&P
500
®
Index with an initial value of $10.
Under this characterization, if you are a U.S. taxable
investor, your tax treatment may differ significantly depending
on whether you hold the certificates or a security and a warrant
separately. If you hold the certificates and the mixed
straddle election applies, you generally will recognize
short-term capital gain (if any) on maturity or disposition of
the certificates equal to the difference between the amount
realized and your adjusted tax basis in the certificates. If you
exchange your certificates for securities and warrants and
dispose of one but not the other, you will have long-term
capital gain or loss at maturity or on disposition of the
securities or the warrants if you have held only the securities
or only the warrants, as the case may be, for more than one year
after the disposition of the other instrument. You should be
aware, however, that if you hold only the securities or only the
warrants, you may receive less than the principal amount of your
investment at maturity. Under the straddle rules, if the
identified straddle election applies, losses
realized on the disposition of the securities or the warrants,
as the case may be, may be required to be capitalized into the
basis of any warrants or securities, as applicable, that you
retain.
No statutory, judicial or administrative authority addresses the
characterization of the certificates or instruments similar to
the certificates for U.S. federal income tax purposes. As a
result, significant aspects of the U.S. federal income tax
consequences of an investment in the certificates are not
certain. Due to the absence of authority as to the proper
characterization of the certificates, no assurance can be given
that the Internal Revenue Service will accept, or that a court
will uphold, the characterization and tax treatment described
above. Alternative treatment of the certificates could result in
less favorable U.S. federal income tax consequences to you,
including a requirement to accrue income on a current basis and
to treat any gain as ordinary income. Finally, the Internal
Revenue Service and U.S. Treasury Department have requested
public comments on a comprehensive set of tax policy issues
(including timing and character) related to financial
instruments similar to the certificates and the securities. In
addition, legislation has been introduced for consideration in
the United States Congress that, if enacted into law, could
require current accrual of interest income on prepaid derivative
contracts with a term of more than one year (which would include
financial instruments similar to the securities and may include
financial instruments similar to the certificates) acquired
after the date of the legislations enactment. You should
refer to the section Certain United States Federal Income
Tax Considerations in this offering document for more
information.
Will the
Certificates Be Listed on a Stock Exchange?
We will apply to list the certificates on the NYSE Arca under
the symbol AHY, but we cannot assure you that the
certificates will be approved for listing. You should be aware
that the listing of the certificates on NYSE Arca does not
guarantee that a liquid trading market will be available for the
certificates. If the certificates are not approved for listing,
Citigroup Global Markets Inc. currently intends to make an
over-the-counter
market in the certificates, but it is not obligated to do so.
Can You
Tell Me More About Citigroup Inc. and Citigroup
Funding?
Citigroup Inc. is a diversified global financial services
holding company whose businesses provide a broad range of
financial services to consumer and corporate customers.
Citigroup Funding is a wholly-owned subsidiary
6
of Citigroup Inc. whose business activities consist primarily of
providing funds to Citigroup Inc. and its subsidiaries for
general corporate purposes.
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 each of the five most recent fiscal
years and the nine months ended September 30, 2010.
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Nine
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Months
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Ended
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September 30,
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Year Ended December 31,
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2010
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2009
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2008
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2007
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2006
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2005
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Ratio of income to fixed charges (excluding interest on deposits)
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1.94
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NM
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NM
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1.01
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1.81
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2.25
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Ratio of income to fixed charges (including interest on deposits)
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1.63
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NM
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NM
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1.01
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1.51
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1.79
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Ratio of income to combined fixed charges including preferred
stock dividends (excluding interest on deposits)
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1.94
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NM
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NM
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1.01
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1.80
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2.24
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Ratio of income to combined fixed charges including preferred
stock dividends (including interest on deposits)
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1.63
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NM
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NM
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1.01
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1.50
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1.79
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NM: Not meaningful.
What Is
the Role of Citigroup Fundings and Citigroup Inc.s
Affiliate, Citigroup Global Markets Inc.?
Citigroup Fundings and Citigroup Inc.s affiliate,
Citigroup Global Markets Inc., is the underwriter for the
offering and sale of the certificates and is expected to receive
compensation for activities and services provided in connection
with the offering. Citigroup Global Markets will receive an
underwriting discount of $0.325 from Citigroup Funding for each
$10.000 certificate sold in this offering. Certain dealers,
including Citi International Financial Services, Citigroup
Global Markets Singapore Pte. Ltd. and Citigroup Global Markets
Asia Limited, broker-dealers affiliated with Citigroup Global
Markets, will receive not more than $0.300 from this
underwriting discount for each certificate they sell. Financial
Advisors employed by Smith Barney, a division of Citigroup
Global Markets, will receive a fixed sales commission of $0.300
from this underwriting discount for each certificate they sell.
Additionally, it is possible that Citigroup Global Markets and
its affiliates may profit from expected hedging activity related
to this offering, even if the value of the certificates
declines. You should refer to Risk Factors
Risks Generally Relating to the Certificates, Securities and
Warrants Citigroup Fundings Hedging Activity
Could Result in a Conflict of Interest and
Underwriting in this offering document for more
information.
After the initial offering, Citigroup Global Markets
and/or
other
broker-dealer affiliates of Citigroup Funding intend to buy and
sell certificates to create a secondary market for holders of
the certificates, and may engage in other activities described
below in the section Underwriting. However, neither
Citigroup Global Markets nor any of these affiliates will be
obligated to engage in any market-making activities, or continue
them once it has started. Citigroup Global Markets will also act
as calculation agent for the certificates. Potential conflicts
of interest may exist between Citigroup Global Markets and you
as a holder of the certificates. You should refer to Risk
Factors Risks Generally Relating to the
Certificates, Securities and Warrants Citigroup
Global Markets, an Affiliate of Citigroup Funding and Citigroup
Inc. Is the Calculation Agent, Which Could Result in a Conflict
of Interest in this offering document for more information.
Can You
Tell Me More About the Effect of Citigroup Fundings
Hedging Activity?
Citigroup Funding expects to hedge its obligations under the
securities and warrants held by the trust through it or one or
more of its affiliates. This hedging activity likely will
involve trading in one or more of the stocks included in the
S&P
500
®
Index or in other instruments, such as options, swaps or
futures, based upon the S&P
500
®
Index or the stocks included in the S&P
500
®
Index. This hedging activity could affect the value of the
S&P
500
®
Index, the securities and the warrants and therefore the market
value of the certificates. The costs of maintaining or adjusting
this hedging activity could also affect the price at which
Citigroup Fundings affiliate Citigroup Global Markets may
be willing to purchase your certificates in the secondary
market. Moreover, this hedging activity may result in
7
Citigroup Funding or its affiliates receiving a profit, even if
the market value of the certificates declines. You should refer
to Risk Factors Risks Generally Relating to
the Certificates, Securities and Warrants Citigroup
Fundings Hedging Activity Could Result in a Conflict of
Interest, The Price at Which You Will Be
Able to Sell Your Certificates Prior to Maturity Will Depend on
a Number of Factors and May Be Substantially Less Than the
Amount You Originally Invest and Use of Proceeds and
Hedging in this offering document.
Does
ERISA Impose Any Limitations on Purchases of the
Certificates?
Employee benefit plans and other entities the assets of which
are subject to the fiduciary responsibility provisions of the
Employee Retirement Income Security Act of 1974, as amended,
Section 4975 of the Internal Revenue Code of 1986, as
amended, or substantially similar federal, state or local laws,
including individual retirement accounts, (which we call
Plans) will be permitted to purchase and hold the
certificates, provided that each such Plan shall by its purchase
be deemed to represent and warrant either that (A) (i) none
of Citigroup Global Markets, its affiliates or any employee
thereof is a Plan fiduciary that has or exercises any
discretionary authority or control with respect to the
Plans assets used to purchase the certificates or renders
investment advice with respect to those assets and (ii) the
Plan is paying no more than adequate consideration for the
certificates or (B) its acquisition and holding of the
certificates is not prohibited by any such provisions or laws or
is exempt from any such prohibition. However, individual
retirement accounts, individual retirement annuities and Keogh
plans, as well as employee benefit plans that permit
participants to direct the investment of their accounts, will
not
be permitted to purchase or hold the certificates if
the account, plan or annuity is for the benefit of an employee
of Citigroup Global Markets or a family member and the employee
receives any compensation (such as, for example, an addition to
bonus) based on the purchase of the certificates by the account,
plan or annuity. Please refer to the section ERISA
Matters in this offering document for further information.
Are There
Any Risks Associated With My Investment?
Yes. The certificates are subject to a number of risks. Please
refer to the section Risk Factors in this offering
document.
The
Securities and the Warrants
The sole assets of the trust are expected to be equity index
participation securities and equity index warrants, both linked
to the S&P
500
®
Index. The trust will purchase all of the securities and the
warrants from Citigroup Funding on the date the certificates are
issued. Payments received under the securities and the warrants
will fund the payment obligations under the certificates at
maturity. Any payments due on each of the securities and the
warrants are fully and unconditionally guaranteed by Citigroup
Inc., which guarantees will rank equally with all other
unsecured and unsubordinated debt of Citigroup Inc.
What Are
the Equity Index Participation Securities?
The equity index participation securities linked to the S&P
500
®
Index, or the securities, are a series of unsecured senior debt
securities issued by Citigroup Funding. Any payments due on the
securities are fully and unconditionally guaranteed by Citigroup
Inc. The securities will rank equally with all other unsecured
and unsubordinated debt of Citigroup Funding and, as a result of
the guarantee, any payments due under the securities will rank
equally with all other unsecured and unsubordinated debt of
Citigroup Inc. The securities mature
on ,
2013, the date on which the certificates would have matured had
you not exercised your exchange right, which we refer to as the
maturity of the certificates. The securities will be issued
under an indenture among Citigroup Funding, Citigroup Inc. and
The Bank of New York Mellon (formerly known as The Bank of New
York), as successor trustee.
Each security will have a face amount of $10 and initially will
be issued by Citigroup Funding at a price of
$ . At maturity, each security will
pay a security payment equal to the sum of $10 and a security
return amount, which could be positive, zero or negative. The
security return amount will be calculated as follows:
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If the index return is positive, the security return amount will
equal the product of (a) $10, (b) the index return and
(c) the participation rate, which is expected to be
approximately 80% to 90% (to be determined on the pricing date)
of the index return.
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If the index return is zero or negative, the security return
amount will equal the product of (a) $10 and (b) the
index return. Because your participation in the depreciation of
the S&P
500
®
Index is not limited by the participation rate, if the ending
value is less than the starting value, you will participate
fully in the depreciation of the S&P
500
®
Index. As a result, if you choose to exercise your exchange
right, dispose of the warrants and hold only the securities, you
may receive less than the principal amount of your investment at
maturity and the amount you receive at maturity could be less
than $10.
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The security return amount will be used only for the purpose of
determining the security payment and is different from the
supplemental distribution amount used in determining the
maturity payment on the certificates.
For more specific information about the security return
amount and the index return, and for
information on the effect of a market disruption event on the
determination of the security return amount and the index
return, please see Description of the Equity Index
Participation Securities Security Return
Amount and the definitions of index return and market
disruption event in Description of the
Certificates Supplemental Distribution Amount
in this offering document.
What Are
the Equity Index Warrants?
The equity index warrants linked to the S&P
500
®
Index, or the warrants, are a series of index warrants issued by
Citigroup Funding. Any payments due on the warrants are fully
and unconditionally guaranteed by Citigroup Inc. The warrants
will rank equally with all other unsecured and unsubordinated
debt of Citigroup Funding and, as a result of the guarantee, any
payments due under the warrants will rank equally with all other
unsecured and unsubordinated debt of Citigroup Inc. The warrants
will be issued under a warrant agreement among Citigroup
Funding, Citigroup Inc. and U.S. Bank National Association,
as warrant agent.
Each warrant will have a notional amount of $10 and will be
initially issued by Citigroup Funding at a price of
$ . The warrants will be
automatically
on ,
2013, and are not exercisable prior to that time. Upon exercise,
each warrant will pay a warrant payment equal to the product of
(a) $10 and (b) the warrant index return, provided
that the warrant payment will not be less than zero. As a
result, if you choose to exercise your exchange right, dispose
of the securities and hold only the warrants, you may receive
less than the principal amount of your investment at maturity.
The warrant index return, which is presented in this offering
document as a percentage, will equal the following fraction:
Starting Value Ending Value
Starting Value
The warrant index return will be used only for the purpose of
determining the warrant payment and is different from the index
return used in determining the maturity payment on the
certificates and the security payment.
For more specific information about the starting
value and the ending value, and for
information about the effect of a market disruption event on the
determination of the index return, please see Description
of the Equity Index Warrants Payment Upon Exercise
of the Warrants and the definition of market disruption
event in Description of the Certificates
Supplemental Distribution Amount in this offering document.
Will the
Securities or the Warrants Be Listed on a Stock
Exchange?
Neither the securities nor the warrants will be listed on any
exchange. There is currently no secondary market for the
securities or the warrants. Citigroup Global Markets currently
intends, but is not obligated, to make a market in the
securities or the warrants. Even if a secondary market does
develop, it may not be liquid and may not continue for the term
of the securities or the warrants.
If I
Exercise My Exchange Rights, Will I Receive Any Periodic
Payments on the Securities or the Warrants?
You will not receive any periodic payments of interest or any
other periodic payments on the securities or the warrants. In
addition, you will not be entitled to receive dividend payments
or other distributions, if any, made on the stocks included in
the S&P
500
®
Index.
9
RISK
FACTORS
Because the terms of the certificates, the securities and the
warrants differ from those of conventional debt securities in
that the payment at maturity of the certificates and the
securities, and upon exercise of the warrants, will be based on
the closing value of the S&P
500
®
Index on the third index business day before the maturity date,
an investment in the certificates, the securities and the
warrants entails significant risks not associated with similar
investments in conventional debt securities, including, among
other things, fluctuations in the value of the
S&P 500
®
Index and other events that are difficult to predict and beyond
our control.
Risks
Relating to the Certificates
If you choose to exercise your exchange right and hold only the
securities or only the warrants until maturity, you will be
subject to separate risks applicable to the securities or the
warrants, as the case may be. You should refer to
Risks Relating to the Securities and
Risks Relating to the Warrants for a
discussion of risks applicable to each of the securities and the
warrants. You should also refer to Risks
Generally Relating to the Certificates, Securities and
Warrants for a discussion of additional risks generally
applicable to the certificates, the securities and the warrants.
The
Appreciation of Your Investment in the Certificates Will Be
Limited and May Be Zero
The amount of the maturity payment will depend on the ending
value, which will be the closing value of the S&P
500
®
Index on the valuation date. If the ending value is greater than
the starting value, your participation in the appreciation of
the S&P
500
®
Index will be limited by the participation rate, which is
expected to be approximately 80% to 90% (to be determined on the
pricing date) of the index return. In addition, if the ending
value is equal to or less than the starting value, the payment
you receive at maturity will be limited to the amount of your
initial investment in the certificates, even if the closing
value of the S&P
500
®
Index is greater than the starting value at one or more times
during the term of the certificates or if the closing value of
the S&P
500
®
Index at maturity exceeds the starting value, but the closing
value of the S&P
500
®
Index on the valuation date is equal to or less than the
starting value. Because of the possibility of limited or zero
appreciation of your initial investment, the certificates may
provide less opportunity for appreciation than an investment in
a similar security that would allow you to participate fully in
the appreciation of the S&P
500
®
Index or in some or all of the stocks included in the S&P
500
®
Index.
You
Will Not Receive Any Periodic Payments on the
Certificates
You will not receive any periodic payments of interest or any
other periodic payments on the certificates. In addition, you
will not be entitled to receive dividend payments or other
distributions, if any, made on the stocks included in the
S&P
500
®
Index.
The
Yield on the Certificates May Be Lower Than the Yield on a
Standard Debt Security of Comparable Maturity
The certificates do not pay any interest. As a result, if the
index return is less than
approximately %, the yield on the
certificates will be less than that which would be payable on a
conventional fixed-rate debt security of Citigroup Funding of
comparable maturity.
Your
Return on the Certificates Will Not Reflect the Return You Would
Realize if You Actually Owned the Stocks Included in the
S&P
500
®
Index
Your return on the certificates will not reflect the return you
would realize if you actually owned the stocks included in the
S&P
500
®
Index. The value of the S&P
500
®
Index is calculated by reference to the prices of the stocks
included in the index without taking into consideration the
value of any dividends paid on those stocks. As a result, the
return on the certificates may be less than the return you could
have realized if the dividends paid on those stocks were
included in the calculation of the S&P
500
®
Index. In addition, your participation in the appreciation of
the S&P
500
®
Index will be limited by the participation rate, which is
expected to be approximately 80% to 90% (to be determined on the
pricing date) of the index return.
10
You
Will Have Limited Voting Rights with Respect to the Trust and
the Trustees
You will have limited voting rights with respect to the trust
and will not be entitled to vote to appoint, remove or replace,
or increase or decrease the number of, the trustees. These
voting rights will be held exclusively by Citigroup Funding, as
the holder of the common securities of the trust. You should
refer to the section Description of the
Certificates Voting Rights in this offering
document.
You
May Not Be Able to Sell Your Certificates if an Active Trading
Market Does Not Develop
There is currently no secondary market for the certificates. We
will apply to list the certificates on the American Stock
Exchange under the symbol ,
but we cannot assure you that the certificates will be listed.
Even if the certificates are approved for listing, the secondary
market may not be liquid and may not continue for the term of
the certificates. If the secondary market for the certificates
is limited, there may be few buyers should you choose to sell
your certificates prior to maturity. In addition, if the
certificates are not approved for listing, Citigroup Global
Markets currently intends to make an over-the-counter market in
the certificates, but it is not obligated to do so.
The
United States Federal Income Tax Consequences of the
Certificates Are Uncertain
No statutory, judicial or administrative authority addresses the
characterization of the certificates or instruments similar to
the certificates for U.S. federal income tax purposes. As a
result, significant aspects of the U.S. federal income tax
consequences of an investment in the certificates are not
certain. No ruling is being requested from the Internal Revenue
Service with respect to the certificates and the Internal
Revenue Service may not agree with the treatment described under
Certain United States Federal Income Tax
Considerations in this offering document. Alternative
treatments of the certificates could result in less favorable
U.S. federal income tax consequences to you, including a
requirement to accrue income on a current basis and to treat any
gain as ordinary income. The tax rules applicable to the
certificates are complex and several aspects of tax treatment of
the certificates may be affected by certain tax elections that
may apply.
You should consult your own tax advisors in
determining the tax consequences to you of purchasing, owning
and disposing of the certificates, securities and warrants,
including the application in your particular circumstances of
the tax considerations discussed in the section Certain
United States Federal Income Tax Considerations in this
offering document, as well as the application of state, local or
other tax laws, the applicability of and advisability of making
certain tax elections, and possible effects of changes in
federal or other tax laws
.
Unless
a Mixed Straddle Election Applies, You May Be
Required To Recognize Gain on Warrants Annually, Even Though You
Will Not Receive Any Cash Distributions Before
Maturity
Under the treatment of the assets of the trust that you and the
trust will agree to, if you are a U.S. taxable investor and
you hold the securities and the warrants together in the form of
the certificates, you may be required to treat the warrants as
section 1256 contracts. In that case, unless a
mixed straddle election applies with respect to the warrants,
you would generally recognize gain, if any, on the warrants
annually as if you sold the warrants at the close of the taxable
year at fair market value, even though you will receive no
distributions until maturity. Any gain on the warrants generally
will be 60% long-term capital gain and 40% short-term capital
gain. Making a mixed straddle election would permit
you to elect out of the annual gain recognition regime that
otherwise may apply to the warrants. The trust will make a mixed
straddle election on behalf of all holders of the certificates.
It is unclear, however, whether the election made by the trust
on behalf of a holder will be effective. You are urged to make a
separate mixed straddle election by complying with the
identification requirements described in the section
Certain United States Federal Income Tax
Considerations and by filing IRS Form 6781 (attached
to this offering document as Exhibit A).
The
Trading Price of the Certificates May Be Less Than You Would
Otherwise Expect Because the Maturity of the Certificates Can Be
Accelerated
If an acceleration event occurs, the maturity of the
certificates will be accelerated and you will receive with
respect to each certificate the accelerated maturity payment.
Because the amount that would be payable on the
11
accelerated maturity date is uncertain, since it would depend on
when an acceleration event occurs, the market value of the
certificates may be less than what you would otherwise expect
based on the value of the S&P
500
®
Index and the level of interest rates at a particular time.
The
Payments You Receive on the Certificates Likely Will Be Delayed
or Reduced in the Event of a Bankruptcy of Citigroup Funding or
Citigroup Inc.
Although the certificates are securities of the trust, the
ability of the trust to make payments under the certificates
depends upon its receipt from Citigroup Funding of the maturity
payments or accelerated maturity payments under the securities
and the warrants. The ability of the trust to meet its
obligations under the certificates therefore depends on the
ability of Citigroup Funding to meet its obligations under the
securities and the warrants, which, in turn, depends on the
solvency and creditworthiness of Citigroup Funding. Although
Citigroup Inc. has provided a full and unconditional guarantee
of Citigroup Fundings payment obligations under each of
the securities and the warrants and, in the event of a
bankruptcy of Citigroup Funding, would be required to make any
payments due from Citigroup Funding under the securities or the
warrants, there can be no assurance of Citigroup Inc.s
continued solvency. As such, in the event of a bankruptcy of
Citigroup Funding or Citigroup Inc., any recovery by the holders
of certificates likely will be substantially delayed and may be
less than each holders
pro rata
portion of the
securities and the warrants.
Risks
Relating to the Securities
If you choose to exercise your exchange right, dispose of the
warrants and hold only the securities, your investment in the
securities may entail the specific risks discussed below. You
should also refer to Risks Generally Relating
to the Certificates, Securities and Warrants for a
discussion of additional risks that generally may be applicable
to the certificates, securities and warrants. In order to
exercise your exchange right, your brokerage account must be
approved for options trading. You should consult with your
financial advisor to determine whether your account would meet
the options trading requirements.
Your
Investment in the Securities May Result in a Loss if the Value
of the S&P
500
®
Index Declines
The amount payable at maturity of the securities will depend on
the closing value of the S&P
500
®
Index on the third index business day before maturity of the
certificates. As a result, the amount of your security payment
may be less than the initial issue price of the securities. If
the ending value of the S&P
500
®
Index declines by approximately %
(to be determined on the pricing date) or more from the starting
value, the security payment will be less than
$ , the initial issue price of
each security, and could be zero, in which case your investment
in the securities will result in a loss. This will be true even
if the value of the S&P
500
®
Index at any point during the term of the securities exceeds the
starting value of the S&P
500
®
Index.
The
Appreciation of Your Investment in the Securities Will Be
Limited
If the ending value of the S&P
500
®
Index is greater than the starting value, your participation in
the appreciation of the S&P
500
®
Index will be limited by the participation rate, which is
expected to be 80% to 90% (to be determined on the pricing date)
of the index return. Because of the participation rate, the
securities may provide less opportunity for appreciation than an
investment in a similar security that would permit you to
participate fully in the appreciation of the S&P
500
®
Index or in some or all of the stocks included in the S&P
500
®
Index.
You
Will Participate Fully in Any Depreciation in the Value of the
S&P
500
®
Index
If the ending value is greater than the starting value, your
participation in the appreciation of the S&P
500
®
Index will be limited by the participation rate, which is
expected to be approximately 80% to 90% (to be determined on the
pricing date) of the index return. However, because your
participation in the depreciation of the S&P
500
®
Index is not limited by the participation rate, if the ending
value is less than the starting value, you will participate
fully in the depreciation of the S&P
500
®
Index.
12
The
Yield on the Securities May Be Lower Than the Yield on a
Standard Debt Security of Comparable Maturity
The securities do not pay any interest. As a result, if the
index return is less than
approximately %, the yield on the
securities will be less than that which would be payable on a
conventional fixed-rate, non-callable debt security of Citigroup
Funding of comparable maturity.
You
Will Not Receive Any Periodic Payments on the
Securities
You will not receive any periodic payments of interest or any
other periodic payments on the securities. In addition, you will
not be entitled to receive dividend payments or other
distributions, if any, made on the stocks included in the
S&P
500
®
Index.
Your
Return on the Securities Will Not Reflect the Return You Would
Realize if You Actually Owned the Stocks Included in the
S&P
500
®
Index
Your return on the securities will not reflect the return you
would realize if you actually owned the stocks included in the
S&P
500
®
Index. S&P calculates the S&P
500
®
Index by reference to the prices of the stocks included in the
S&P
500
®
Index without taking into consideration the value of any
dividends paid on those stocks. As a result, the return on the
securities may be less than the return you could have realized
if the dividends paid on those stocks were included in the
calculation of the S&P
500
®
Index. In addition, as described above, your participation in
the appreciation of the S&P
500
®
Index will be limited by the participation rate, which is
expected to be approximately 80% to 90% (to be determined on the
pricing date) of the index return.
The
Securities Will Not Be Listed on Any Exchange; You May Not Be
Able To Sell Your Securities if an Active Trading Market Does
Not Develop
The securities will not be listed on any exchange. There is
currently no secondary market for the securities. Citigroup
Global Markets currently intends, but is not obligated, to make
a market in the securities. Even if a secondary market does
develop, it may not be liquid and may not continue for the term
of the securities. If the secondary market for the securities is
limited, there may be few buyers should you choose to sell your
securities prior to maturity and this may reduce the price you
receive.
Risks
Relating to the Warrants
If you choose to exercise your exchange right, dispose of the
securities and hold only the warrants, your investment in the
warrants may entail the specific risks discussed below. You
should also refer to Risks Generally Relating
to the Certificates, Securities and Warrants for a
discussion of additional risks that generally may be applicable
to the certificates, securities and warrants. In order to
exercise your exchange right, your brokerage account must be
approved for options trading. You should consult with your
financial advisor to determine whether your account would meet
the options trading requirements.
The
Warrants Will Expire Worthless Unless the Value of the S&P
500
®
Index Declines
The amount payable upon exercise of the warrants will depend on
the closing value of the S&P
500
®
Index on the third index business day before maturity of the
certificates. If the ending value of the S&P
500
®
Index is greater than or equal to the starting value, the
warrant payment will be zero. If the ending value of the
S&P
500
®
Index does not decrease by
approximately % or more from the
starting value, the warrant payment will be less than
$ ,
the initial issue price of each warrant, in which case your
investment in the warrants will result in a loss. This will be
true even if the value of the S&P
500
®
Index at any point during the term of the warrants declines by
approximately % or more from the
starting value of the S&P
500
®
Index.
The
Warrants Are a Risky Investment and Are Not Suitable for All
Investors
If you choose to exercise your exchange right, dispose of the
securities and hold only the warrants, the warrants will be a
risky investment and will not be suitable for all investors.
Equity index warrants may change substantially
13
in value, or lose all of their value, with relatively small
movements in the value of the S&P
500
®
Index. Accordingly, equity index warrants, such as the warrants
offered by this offering document, involve a high degree of risk
and are not appropriate for every investor. Investors who are
considering investing in the warrants, or exchanging their
certificates for warrants, must be able to understand and bear
the risk of a speculative investment in the warrants, be
experienced with respect to options and option transactions and
understand the risks of transactions in equity-indexed
instruments. Investors should reach an investment decision only
after careful consideration, with their advisors, of the
suitability of the warrants in light of their particular
financial circumstances and the information set forth in this
offering document.
You
May Not Exercise the Warrants Until They Are Automatically
Exercised
The warrants will be automatically exercised on the maturity of
the certificates and are not exercisable prior to that date.
Thus, even if the value of the S&P
500
®
Index declines significantly from the starting value at any
point during the term of the warrants, you will not be able to
exercise your warrants at that point. Accordingly, the return on
your investment in the warrants will depend solely on the
closing value of the S&P
500
®
Index on the third index business day before maturity of the
certificates.
You
Will Not Receive Any Periodic Payments on the
Warrants
You will not receive any periodic payments of interest or any
other periodic payments on the warrants. In addition, you will
not be entitled to receive dividend payments or other
distributions, if any, made on the stocks included in the
S&P
500
®
Index.
The
Warrants Will Not Be Listed on Any Exchange; You May Not Be Able
To Sell Your Warrants if an Active Trading Market Does Not
Develop
The warrants will not be listed on any exchange. There is
currently no secondary market for the warrants. Citigroup Global
Markets currently intends, but is not obligated, to make a
market in the warrants. Even if a secondary market does develop,
it may not be liquid and may not continue for the term of the
warrants. If the secondary market for the warrants is limited,
there may be few buyers should you choose to sell your warrants
prior to maturity and this may reduce the price you receive.
The
Price of the Warrants May Exceed That of Similar
Options
The initial issue price of the warrants may be in excess of the
price that a commercial purchaser of options on the S&P
500
®
Index or on the underlying stocks might pay for a comparable
option in a private transaction.
Risks
Generally Relating to the Certificates, Securities and
Warrants
The
Historical Performance of the S&P
500
®
Index Is Not an Indication of the Future Performance of the
S&P
500
®
Index
The historical performance of the S&P
500
®
Index, which is included in this offering document, should not
be taken as an indication of the future performance of the
S&P
500
®
Index during the term of the certificates, securities and
warrants. Changes in the value of the S&P
500
®
Index will affect the trading price of the certificates,
securities and warrants, but it is impossible to predict whether
the value of the index will fall or rise.
The
Price at Which You Will Be Able To Sell Your Certificates,
Securities and Warrants Prior to Maturity Will Depend on a
Number of Factors and May be Substantially Less Than the Amount
You Originally Invest
We believe that the value of your certificates, securities and
warrants in the secondary market will be affected by the supply
of and demand for each of them, the value of the S&P
500
®
Index and a number of other factors. Some of these factors are
interrelated in complex ways. As a result, the effect of any one
factor may be offset or magnified by the effect of another
factor. The following paragraphs describe what we expect to be
the impact on the market
14
value of the certificates, securities and warrants of a change
in a specific factor, assuming all other conditions remain
constant.
Value of the S&P
500
®
Index.
We expect that the market value of the
certificates, securities and warrants will depend substantially
on the relationship between the starting value of the S&P
500
®
Index and the future value of the S&P
500
®
Index. However, changes in the value of the S&P
500
®
Index may not always be reflected, in full or in part, in the
market value of the certificates, securities and warrants. For
example, if you choose to sell your certificates or securities
when the value of the S&P
500
®
Index exceeds its starting value, you may receive substantially
less than the amount that would be payable at maturity based on
that value because of expectations that the value of the
S&P
500
®
Index will continue to fluctuate between that time and the time
when the ending value of the S&P
500
®
Index is determined. Similarly, if you choose to sell your
warrants when the value of the S&P
500
®
Index is less than its starting value, you may receive
substantially less than the amount that would be payable at
maturity based on that value because of expectations that the
value of the S&P
500
®
Index will continue to fluctuate between that time and the time
when the ending value of the S&P
500
®
Index is determined.
In addition, if you choose to sell your certificates when the
value of the S&P
500
®
Index is below its starting value, you may receive less than the
amount you originally invested in the certificates. Similarly,
if you choose to sell your securities when the value of the
S&P
500
®
Index is below its starting value, you may receive less than the
amount you originally invested in the securities. On the other
hand, if you choose to sell your warrants when the value of the
S&P
500
®
Index exceeds its starting value, you may receive less than the
amount you originally invested in the warrants.
Trading prices of the stocks included in the S&P
500
®
Index will be influenced by both the complex and interrelated
political, economic, financial and other factors that can affect
the capital markets generally and the equity trading markets on
which the underlying stocks are traded, and by various
circumstances that can influence the values of the underlying
stocks in a specific market segment or of a particular
underlying stock. Citigroup Fundings hedging activities in
the stocks included in the S&P
500
®
Index, the issuance of securities similar to the certificates,
securities and warrants and other trading activities by
Citigroup Funding, its affiliates and other market participants
can also affect the price of the stocks included in the S&P
500
®
Index and the value of the S&P
500
®
Index.
Volatility of the S&P
500
®
Index.
Volatility is the term used to describe
the size and frequency of market fluctuations. If the volatility
of the S&P
500
®
Index changes during the term of the certificates, securities
and warrants, the market value of the certificates, securities
and warrants may decrease.
Events Involving the Companies Included in the S&P
500
®
Index.
General economic conditions and earnings
results of the companies whose stocks are included in the
S&P
500
®
Index and real or anticipated changes in those conditions or
results may affect the market value of the certificates,
securities and warrants. In addition, if the dividend yields on
these stocks increase, we expect that the market value of the
certificates and securities may decrease because the S&P
500
®
Index does not incorporate the value of dividend payments.
Conversely, if dividend yields on these stocks decrease, we
expect that the market value of the certificates and securities
may increase. On the other hand, we expect that the market value
of the warrants may increase if dividend yields on these stocks
increase, and decrease if dividend yields on these stocks
decrease.
Interest Rates.
We expect that the market
value of the certificates, securities and warrants will be
affected by changes in U.S. interest rates. If
U.S. interest rates change during the term of the
certificates, securities and warrants, the market value of the
certificates, securities and warrants may decrease.
Time Premium or Discount.
As a result of a
time premium or discount, the
certificates, securities and warrants may trade at a value above
or below that which would be expected based on the level of
interest rates and the value of the S&P
500
®
Index the longer the time remaining to maturity. A time
premium or discount results from expectations
concerning the value of the S&P
500
®
Index during the period prior to the maturity of the
certificates, securities and warrants. However, as the time
remaining to maturity decreases, this time premium
or discount may diminish, increasing or decreasing
the market value of the certificates, securities and warrants.
Hedging Activities.
Hedging activities related
to the certificates, securities and warrants by one or more of
our affiliates will likely involve trading in one or more of the
stocks included in the S&P
500
®
Index or in other
15
instruments, such as options, swaps or futures, based upon the
S&P
500
®
Index. This hedging activity could affect the value of the
S&P
500
®
Index and therefore the market value of the certificates,
securities and warrants. It is possible that we or our
affiliates may profit from our hedging activity, even if the
market value of the certificates, securities and warrants
declines. Profit or loss from this hedging activity could affect
the price at which Citigroup Fundings affiliate Citigroup
Global Markets may be willing to purchase your certificates,
securities and warrants in the secondary market.
Credit Ratings, Financial Condition and
Results.
Actual or anticipated changes in
Citigroup Fundings financial condition or results or the
credit ratings, financial condition or results of Citigroup Inc.
may affect the market value of the certificates, securities and
warrants. The securities and warrants are subject to the credit
risk of Citigroup Inc., the guarantor of any payments due on the
securities and warrants.
We want you to understand that the impact of one of the factors
specified above may offset some or all of any change in the
market value of the certificates, securities and warrants
attributable to another factor.
A Gain
on the Certificates Will Be Treated as Short-Term Capital Gain
and Any Losses May Be Required to Be Capitalized or Deferred
Under the Straddle Rules
Under the treatment of the assets of the trust that you and the
trust will agree to, if you are a U.S. taxable investor,
any gain with respect to the certificates (such as at maturity
or on disposition) will be treated as short-term capital gain,
unless you take the steps described below. You will have
long-term capital gain or loss at maturity or on disposition of
the securities if you have exchanged your certificates for the
securities and warrants, disposed of the warrants, and have held
the securities for more than one year after the disposition of
the warrants. Similarly, you will have long-term capital gain or
loss at maturity or on disposition of the warrants if you have
exchanged your certificates for the securities and warrants,
disposed of the securities, and have held the warrants for more
than one year after the disposition of the securities. However,
if you exchange your certificates for the securities and the
warrants and dispose of one instrument, but not the other, any
loss on such disposition may not be deductible currently. If the
identified straddle election applies with respect to
the securities and the warrants, you will be required to add
such loss to your basis in the securities. If the identified
straddle election does not apply, such loss may be deferred and
may not become deductible until you sell or otherwise dispose of
all of your securities. The trust will identify each security
and each warrant as positions comprising a separate identified
straddle on behalf of all holders of the certificates. It is
unclear, however, whether the identified straddle election made
by the trust on behalf of a holder will be effective. You are
urged to make a separate identified straddle election by
complying with the identification requirements described in the
section Certain United States Federal Income Tax
Considerations in this offering document.
The
Market Value of the Certificates, Securities and Warrants May Be
Affected by Purchases and Sales of the Stocks Included in the
S&P
500
®
Index or Related Derivative Instruments by Affiliates of
Citigroup Funding
Citigroup Fundings and Citigroup Inc.s affiliates,
including Citigroup Global Markets, may from time to time buy or
sell the stocks included in the S&P
500
®
Index or derivative instruments relating to the S&P
500
®
Index for their own accounts in connection with their normal
business practices or in connection with hedging Citigroup
Fundings obligations under the securities and warrants.
These transactions could affect the value of the stocks included
in the S&P
500
®
Index and therefore the market value of the certificates,
securities and warrants.
Citigroup
Global Markets, an Affiliate of Citigroup Funding and Citigroup
Inc., Is the Calculation Agent, Which Could Result in a Conflict
of Interest
Citigroup Global Markets, which is acting as the calculation
agent for the certificates, securities and warrants, is an
affiliate of the trust, Citigroup Funding and Citigroup Inc. As
a result, Citigroup Global Marketss duties as calculation
agent, including with respect to certain determinations and
judgments that the calculation agent must make in determining
amounts due to you, may conflict with its interest as an
affiliate of Citigroup Funding and Citigroup Inc.
16
Citigroup
Fundings Hedging Activity Could Result in a Conflict of
Interest
Citigroup Funding expects to hedge its obligations under the
securities and warrants through it or one or more of its
affiliates. This hedging activity will likely involve trading in
one or more of the stocks included in the S&P
500
®
Index or in other instruments, such as options, swaps or
futures, based upon the S&P
500
®
Index or the stocks included in the S&P
500
®
Index. This hedging activity may present a conflict between your
interest in the certificates, securities and warrants and the
interests Citigroup Funding and its affiliates have in
executing, maintaining and adjusting its hedge transactions
because it could affect the value of the S&P
500
®
Index and therefore the market value of the certificates,
securities and warrants. It could also be adverse to your
interest if it affects the price at which Citigroup
Fundings affiliate Citigroup Global Markets may be willing
to purchase your certificates, securities and warrants in the
secondary market. Since hedging Citigroup Fundings
obligation under the securities and warrants involves risk and
may be influenced by a number of factors, it is possible that
Citigroup Funding or its affiliates may profit from its hedging
activity, even if the market value of the certificates,
securities and warrants declines.
17
AVAILABLE
INFORMATION
As required by the Securities Act of 1933, as amended (the
Securities Act), Safety First
Trust Series [2009-4]
(the Trust), Citigroup Funding and Citigroup Inc.
filed a registration statement (File
No. 333-135867)
relating to the Trust Certificates Linked to the S&P
500
®
Index
due ,
2013 (the Certificates) offered by this offering
document with the Securities and Exchange Commission (the
SEC). This offering document is a part of that
registration statement, which includes additional information.
Citigroup Funding and Citigroup Inc. also have filed a
registration statement (File
No. 333-157386)
relating to the Equity Index Participation Securities Linked to
the S&P
500
®
Index
due ,
2013 (the Securities) and the Equity Index Warrants
Linked to the S&P
500
®
Index
due ,
2013 (the Warrants) offered by this offering
document.
Citigroup Inc. files annual, quarterly and current reports,
proxy statements and other information with the SEC. Citigroup
Funding and the Trust currently do not file reports and other
information with the SEC. You may read and copy any document
Citigroup files at the SECs public reference room at
100 F Street, N.E., Washington, D.C. 20549. You
can also request copies of these documents, upon payment of a
duplicating fee, by writing to the Public Reference Section of
the SEC. Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. These SEC
filings are also available to the public from the SECs web
site at
http://www.sec.gov.
Citigroup Inc.s SEC filings are also available on its
website at
http://www.citigroup.com.
Separate financial statements of the Trust have not been
included in this offering document. Citigroup Inc. does not
believe that these financial statements would be material to you
because:
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Citigroup Inc., an SEC reporting company, is the sole
stockholder of Citigroup Funding,
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Citigroup Inc., through Citigroup Funding, indirectly owns all
the voting securities of the Trust,
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the Trust has no independent operations,
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Citigroup Funding is the issuer of the Securities and the
Warrants,
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Citigroup Funding has fully and unconditionally guaranteed the
Trusts obligations under the Certificates to the extent
that the Trust has funds legally available to meet its
obligations,
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Citigroup Inc. has fully and unconditionally guaranteed
Citigroup Fundings guarantee obligations to the same
extent and in the same manner as Citigroup Funding has
guaranteed the Trusts obligations under the Certificates
(we refer to this guarantee, together with Citigroup
Fundings guarantee referred to in the immediately
preceding bullet, as the Certificate Guarantee), and
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Citigroup Inc. has fully and unconditionally guaranteed
Citigroup Fundings payment obligations under each of the
Securities and the Warrants.
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In its future filings under the Securities Exchange Act of 1934,
as amended (the Exchange Act), a footnote to
Citigroup Inc.s annual financial statements will state:
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that the sole assets of the Trust are the Securities and the
Warrants, and
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that the Certificate Guarantee, when taken together with
Citigroup Fundings obligations under the Securities and
the Warrants, Citigroup Inc.s guarantee of each of the
Securities and the Warrants, the related indenture, the related
warrant agreement, the amended and restated declaration of trust
of the Trust and Citigroup Fundings and Citigroup
Inc.s obligations to pay all fees and expenses of the
Trust, constitutes a full and unconditional guarantee by each of
Citigroup Funding and Citigroup Inc. of the Trusts
obligations under the Certificates.
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The SEC allows Citigroup to incorporate by reference
the information it files with the SEC, which means that it can
disclose important information to you by referring you to those
documents. The information incorporated by reference is
considered to be part of this prospectus. Information that
Citigroup files with the SEC will automatically update the
information in this prospectus. In all cases, you should rely on
the later information over different information included in
this prospectus. Citigroup incorporates by reference the
documents listed below
18
and any future filings made with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act (File
No. 1-09924):
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Annual Report on
Form 10-K
for the fiscal year ending December 31, 2009, filed on
February 26, 2010;
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Quarterly Reports on
Form 10-Q
for the quarter ending March 31, 2010, filed on May 7,
2010, the quarter ending June 30, 2010, filed on
August 6, 2010 and the quarter ending September 30,
2010, filed on November 11, 2010;
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Current Reports on
Form 8-K
filed on January 7, 2010, February 26, 2010,
March 17, 2010, April 9, 2010, April 19, 2010 (to
the extent filed with the SEC), April 23, 2010,
April 26, 2010, May 19, 2010, June 2, 2010,
June 15, 2010, June 25, 2010, July 16, 2010 (to
the extent filed with the SEC), July 29, 2010,
August 9, 2010 (2 reports), August 13, 2010,
September 17, 2010, September 24, 2010,
September 29, 2010, September 30, 2010,
October 5, 2010, October 18, 2010 (to the extent filed
with the SEC), October 20, 2010, November 17, 2010
(the Item 8.01 report only), November 29, 2010,
December 10, 2010, December 15, 2010, December 27, 2010, January
10, 2011, January 12, 2011, January 13, 2011, January 18, 2011
(to the extent filed with the SEC), January 20, 2011,
January 21, 2011, January 25, 2011 and February 1,
2011; and
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Definitive Proxy Statement on Schedule 14A filed on
March 12, 2010 and April 8, 2010.
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In no event, however, will any of the information that Citigroup
furnishes to, pursuant to Item 2.02 or Item 7.01 of
any Current Report on
Form 8-K
(including exhibits related thereto) or other applicable SEC
rules, rather than files with, the SEC be incorporated by
reference or otherwise be included herein, unless such
information is expressly incorporated herein by a reference in
such furnished Current Report on
Form 8-K
or other furnished document.
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
540 Crosspoint Parkway
Getzville, NY 14068
(716) 730-8055
(tel.)
(877) 936-2737
(toll free)
Citigroup , Citigroup Funding and the Trust are responsible for
the information contained and incorporated by reference in this
prospectus. None of Citigroup, Citigroup Funding or the Trust
has authorized anyone to provide you with any other information,
and neither takes any responsibility for any other information
that others may provide you. You should not assume that the
information contained in this prospectus, the prospectus
supplement and any applicable pricing supplement, as well as
information Citigroup previously filed with the Securities and
Exchange Commission and incorporated by reference herein, is
accurate as of any date other than the date of the relevant
document. None of Citigroup, Citigroup Funding or the Trust is
making an offer to sell the Securities in any jurisdiction where
the offer or sale is not permitted.
FORWARD-LOOKING
STATEMENTS
Certain statements in this prospectus, any prospectus supplement
and in other information incorporated by reference herein and
therein are forward-looking statements within the
meaning of the rules and regulations of SEC. Generally,
forward-looking statements are not based on historical facts but
instead represent only managements beliefs regarding
future events. Such statements may be identified by words such
as
believe
,
expect
,
anticipate
,
intend
,
estimate
,
may increase
,
may
fluctuate
, and similar expressions, or future or conditional
verbs such as
will
,
should
,
would
and
could
.
19
Such statements are based on Citigroup managements current
expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from those
included in these statements due to a variety of factors,
including without limitation the precautionary statements
included in this prospectus supplement, the accompanying
prospectus and in Citigroups SEC filings, including
without limitation the precautionary statements and risk factors
listed in Citigroups most recent Annual Report on
Form 10-K,
Quarterly Reports on
Form 10-Q,
and the factors described below:
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the continuing impact of the economic recession, including
without limitation potential declines in the Home Price Index
and continued high unemployment in the U.S., and disruptions in
the global financial markets on Citigroups business and
results of operations;
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the impact of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Financial Reform Act) on Citigroups
businesses, business practices and costs of operations;
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the continued impact of The Credit Card Accountability
Responsibility and Disclosure Act of 2009 on Citigroups
credit card businesses and business models;
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Citigroups participation in U.S. government programs
to modify first and second lien mortgage loans, as well as any
future U.S. government modification programs and
Citigroups own loss mitigation and forbearance programs,
and their effect on the amount and timing of Citigroups
earnings, delinquencies and credit losses related to those loans;
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the expiration of a provision of the U.S. tax law allowing
Citigroup to defer U.S. taxes on certain active financial
services income and its effect on Citigroups tax expense;
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risks arising from Citigroups extensive operations outside
the U.S.;
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potential reduction in earnings available to Citigroups
common stockholders and return on Citigroups equity due to
future issuances of Citigroup Common Stock;
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an ownership change under the Internal Revenue Code
and its effect on Citigroups ability to utilize its
deferred tax assets to offset future taxable income;
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the impact of increases in FDIC insurance premiums, as well as
changes in the methodology to calculate such premiums, and other
proposed fees on banks on Citigroups earnings;
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Citigroups ability to compete effectively in the financial
services industry on a global, regional and product basis and
with competitors who may face fewer regulatory constraints;
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Citigroups ability to hire and retain qualified employees;
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Citigroups ability to maintain the value of the Citigroup
brand;
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Citigroups ability to maintain, or increased cost of
maintaining, adequate capital funding and liquidity,
particularly in light of changing regulatory capital
requirements pursuant to the Financial Reform Act, the capital
and liquidity standards proposed by the Basel Committee on
Banking Supervision and U.S. regulators, or otherwise;
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Citigroups continuing ability to obtain financing from
external sources and maintain adequate liquidity;
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reduction in Citigroups or its subsidiaries credit
ratings, including in response to the passage of the Financial
Reform Act, and its effect on the cost of funding from, and
access to, the capital markets and on Citigroups
collateral requirements or other aspects of its costs of
operations;
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market disruptions and their impact on the risk of customer or
counterparty delinquency or default;
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the outcome of inquiries and proceedings by governmental
entities, or judicial and regulatory decisions, regarding
practices in the residential mortgage industry, including among
other things the processes followed for foreclosing residential
mortgages and mortgage transfer and securitization processes;
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Citigroups continued review of its existing and historical
foreclosure processes;
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20
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the exposure of Citigroup, as originator of residential mortgage
loans, sponsor of residential mortgage-backed securitization
transactions or servicer of such loans or in such transactions,
or in other capacities, to government sponsored enterprises
(GSEs), investors, mortgage insurers or other third parties as a
result of representations and warranties made in connection with
the transfer or securitization of such loans;
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Citigroups ability to continue to successfully wind down
Citi Holdings and its failure to realize all of the anticipated
benefits of the realignment of Citigroups businesses;
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Citigroups ability to continue to control expenses,
including through reductions at Citi Holdings, and to fund
investments intended to enhance the success and operations of
Citicorp;
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volatile and illiquid market conditions, which could lead to
further write-downs of Citigroups financial instruments;
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the accuracy of Citigroups assumptions and estimates used
to prepare its financial statements;
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changes in accounting standards, including potential changes
relating to how Citigroup classifies, measures and reports
financial instruments, determines impairment on those assets and
accounts for hedges, and their impact on Citigroups
financial condition and results of operations;
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the effectiveness of Citigroups risk management processes
and strategies;
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the exposure of Citigroup to reputational damage and significant
legal and regulatory liability as a member of the financial
services industry; and
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a failure in Citigroups operational systems or
infrastructure, or those of third parties.
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CITIGROUP
INC.
Citigroup Inc. is a global diversified financial services
holding company whose businesses provide a broad range of
financial products and services to consumers, corporations,
governments, institutions and jurisdictions. Citigroup has
approximately 200 million customer accounts and does
business in more than 160 countries and jurisdictions.
Citigroups activities are conducted through the Regional
Consumer Banking, Institutional Clients Group, Citi Holdings and
Corporate/Other business segments. Its businesses conduct their
activities across the North America, Latin America, Asia, and
Europe, Middle East and Africa regions. Citigroups
principal subsidiaries are Citibank, N.A., Citigroup Global
Markets Inc. and Grupo Financiero Banamex, S.A. de C.V., each of
which is a wholly owned, indirect subsidiary of Citigroup.
Citigroup was incorporated in 1988 under the laws of the State
of Delaware as a corporation with perpetual duration.
Citigroups principal office is located at 399 Park Avenue,
New York, NY 10043, and its telephone number is
(212) 559-1000.
CITIGROUP
FUNDING INC.
Citigroup Funding is a wholly-owned subsidiary of Citigroup
Inc., whose business activities consist primarily of providing
funds to Citigroup Inc. and its subsidiaries for general
corporate purposes. Citigroup Funding was incorporated on
January 14, 2005 under the laws of the State of Delaware as
a corporation with perpetual duration.
The principal executive offices of Citigroup Funding are located
at 399 Park Avenue, New York, New York 10043, and its telephone
number is
(212) 559-1000.
21
USE OF
PROCEEDS AND HEDGING ACTIVITIES
The Trust will use all the proceeds from the sale of the
Certificates and the common securities to buy the Securities and
the Warrants from Citigroup Funding. Citigroup Funding will use
a portion of the net proceeds from the sale of the Securities
and the Warrants for general corporate purposes, which may
include:
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funding the business of Citigroup Inc. subsidiaries;
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funding investments in, or extensions of credit or capital
contributions to, Citigroup Inc. subsidiaries; and
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lengthening the average maturity of liabilities, which means
that it could reduce its short-term liabilities or refund
maturing indebtedness.
|
Citigroup Funding expects to incur additional indebtedness in
the future to fund Citigroup Inc.s businesses.
Citigroup Funding or one of more of its affiliates may enter
into a swap agreement in connection with the sale of the
Certificates and may earn additional income from that
transaction.
Citigroup Funding or one or more of its affiliates may use all
or some of the remainder of the proceeds received from the sale
of the Securities and the Warrants for hedging activities
related to Citigroup Fundings obligations under the
Securities and the Warrants. On or prior to the closing date of
the Certificates offering, Citigroup Funding, directly or
through one or more of its affiliates, will hedge its
anticipated exposure under the Securities and the Warrants by
the purchase or sale of one or more of the stocks included in
the S&P
500
®
Index or in other instruments, such as options, swaps or
futures, based upon the S&P
500
®
Index or the stocks included in the
S&P 500
®
Index.
Citigroup Funding expects that it or one or more of its
affiliates will increase or decrease their initial hedging
positions over time using techniques which help evaluate the
size of any hedge based upon a variety of factors affecting the
value of the S&P
500
®
Index. These factors may include the history of price changes in
the S&P
500
®
Index and the time remaining to maturity. Citigroup Funding or
one or more of its affiliates may take long or short positions
in the S&P
500
®
Index or options, swaps, futures contracts, forward contracts,
or other derivative or similar instruments related to the
S&P
500
®
Index.
In addition, Citigroup Funding or one or more of its affiliates
may purchase or otherwise acquire a long or short position in
the Certificates, the Securities or the Warrants from time to
time and may, in their sole discretion, hold, resell, exercise,
cancel or retire such Certificates, the Securities or the
Warrants. Citigroup Funding or one or more of its affiliates may
also take hedging positions in other types of appropriate
financial instruments that may become available in the future.
If Citigroup Funding or one or more affiliates has a long or
short hedge position in the S&P
500
®
Index or options, swaps, futures contracts, forward contracts or
other derivative or synthetic instruments related to the
S&P 500
®
Index, Citigroup Funding or one or more of its affiliates may
liquidate all or a portion of its holdings at or about the time
of the maturity of the Certificates, the Securities and the
Warrants. The aggregate amount and type of such positions are
likely to vary over time depending on future market conditions
and other factors. Since the hedging activities described in
this section involve risks and may be influenced by a number of
factors, it is possible that Citigroup Funding or one or more of
its affiliates may receive a profit from the hedging activities,
even if the market value of the Certificates, the Securities or
the Warrants declines. Citigroup Funding is only able to
determine profits or losses from any of such positions when the
position is closed out and any offsetting position or positions
are taken into account.
Citigroup Funding has no reason to believe that its hedging
activity, as well as those of its affiliates, will have a
material impact on the price of such options, swaps, futures
contracts, forward contracts or other derivative or similar
instruments, or on the value of the S&P
500
®
Index. However, Citigroup Funding cannot guarantee you that its
hedging activities, as well as those of its affiliates, will not
affect such prices or value.
22
SAFETY
FIRST
TRUST SERIES [2009-4]
Safety First
Trust Series [2009-4]
is a statutory trust formed under the laws of the State of
Delaware pursuant to a declaration of trust executed by
Citigroup Funding, as sponsor, Citigroup Inc. and the trustees
of the Trust (as described below), and the filing of a
certificate of trust with the Secretary of State of the State of
Delaware. The declaration of trust will be amended and restated
in its entirety substantially in the form filed as an exhibit to
the registration statement relating to the Certificates of which
this offering document forms a part. The amended and restated
declaration of trust will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the
Trust Indenture Act). Upon issuance of the
Certificates, the purchasers thereof will own all of the
Certificates. Citigroup Funding will directly or indirectly
acquire all of the common securities of the Trust. We refer to
the Certificates and the common securities as, collectively, the
Trust Securities.
The Trust will use all the proceeds derived from the issuance of
the Trust Securities to purchase the Securities and the
Warrants and, accordingly, the assets of the Trust will consist
solely of the Securities and the Warrants. Of the total proceeds
from the sale of the Trust Securities,
approximately % will be invested by
the Trust in the Securities and
approximately % will be invested by
the Trust in the Warrants. The Trust exists for the exclusive
purposes of:
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issuing its Trust Securities representing undivided
beneficial interests in the assets of the Trust,
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investing the gross proceeds of its Trust Securities in the
Securities and the Warrants, and
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engaging only in activities incidental to the above.
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The Trusts business and affairs are conducted by its
trustees, each appointed by Citigroup Funding as holder of the
common securities. Pursuant to the amended and restated
declaration of trust, the initial number of trustees of the
Trust will be five:
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U.S. Bank National Association, a national banking
association that is unaffiliated with Citigroup Funding and
Citigroup Inc., as the institutional trustee,
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U.S. Bank Trust National Association, a national
banking association with its principal place of business in the
State of Delaware, as the Delaware trustee, and
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three officers of Citigroup Funding, as the individual trustees.
|
Citigroup Funding, as direct or indirect holder of all the
common securities, will have the right, subject to certain
restrictions contained in the declaration, to appoint, remove or
replace any trustees and to increase or decrease the number of
trustees.
The institutional trustee will act as the sole indenture trustee
under the amended and restated declaration of trust for purposes
of compliance with the Trust Indenture Act until it is
removed or replaced by the holder of the common securities. The
institutional trustee will hold title to the Securities and the
Warrants for the benefit of the holders of the Trusts
Trust Securities and, in its capacity as the holder, the
institutional trustee will have the power to exercise all
rights, powers and privileges under the indenture and the
warrant agreement pursuant to which the Securities and the
Warrants are issued. In addition, the institutional trustee will
maintain exclusive control of a segregated non-interest bearing
bank account to hold all payments made in respect of the
Securities and the Warrants for the benefit of the holders of
the Trusts Trust Securities. The institutional
trustee will make payments of distributions and payments on
liquidation and otherwise to the holders of the
Trust Securities out of funds from the segregated bank
account.
The individual trustees are authorized and directed to operate
the Trust in such a way so that the Trust will not be required
to register as an investment company under the Investment
Company Act of 1940 (the Investment Company Act) or
be characterized as other than a grantor trust for
U.S. federal income tax purposes. Citigroup Funding and the
individual trustees are authorized to take any action, not
inconsistent with applicable law, the amended and restated
declaration of trust or the certificate of incorporation of
Citigroup Funding, that each of Citigroup Funding and the
individual trustees in their discretion deem to be necessary or
desirable to achieve such end as long as the action does not
adversely affect the interests of the holders of the
Certificates or vary the terms thereof.
23
U.S. Bank National Association also will act as guarantee
trustee under the Certificate Guarantee and will hold the
Certificate Guarantee for the benefit of the holders of the
Certificates.
The Bank of New York Mellon, formerly known as The Bank of New
York, will act as trustee for the Securities under the indenture
for purposes of compliance with the provisions of the
Trust Indenture Act. U.S. Bank National Association
will act as warrant agent under the warrant agreement.
Citigroup Inc., Citigroup Funding and certain of their
affiliates have had and may continue to have banking
relationships with the trustees and the warrant agent in the
ordinary course of business.
The rights of the holders of the Certificates, including
economic rights, rights to information and voting rights, are
set forth in the amended and restated declaration of trust, the
Delaware Statutory Trust Act and the Trust Indenture
Act. Holders of the Certificates have no preemptive rights.
The location of the principal executive office of the Trust is
c/o Citigroup
Funding Inc., 399 Park Avenue, New York, New York 10043,
and its telephone number is
(212) 559-1000.
Citigroup Funding will pay all fees and expenses related to the
Trust and the offering of the Trusts Trust Securities.
24
DESCRIPTION
OF THE CERTIFICATES
The Certificates will be issued pursuant to the terms of the
amended and restated declaration of trust. The terms of the
Certificates will include those stated in the amended and
restated declaration of trust and those made part of the amended
and restated declaration of trust by the Trust Indenture
Act. Pursuant to the amended and restated declaration of trust,
every holder of the Certificates will be deemed to have
expressly assented and agreed to the terms of, and will be bound
by, the amended and restated declaration of trust. The following
is a summary of the terms and provisions of the Certificates.
This summary does not describe all of the terms and provisions
of the amended and restated declaration of trust and the
Certificate Guarantee. You should read the forms of these
documents, which are filed as exhibits to the registration
statement of which this offering document forms a part.
General
The amended and restated declaration of trust authorizes the
individual trustees to issue the Trust Securities on behalf
of the Trust. The Trust Securities represent undivided
beneficial interests in the assets of the Trust. All of the
common securities of the Trust will be owned, directly or
indirectly, by Citigroup Funding. The common securities rank
pari passu
with the Certificates and payments will be
made on the common securities on a
pro rata
basis with
the Certificates, except that upon the occurrence of an
acceleration event, the rights of the holders of the common
securities to receive payments will be subordinated to the
rights of the holders of the Certificates. The amended and
restated declaration does not permit the issuance by the Trust
of any securities other than its Trust Securities or the
incurrence of any debt by the Trust. Pursuant to the amended and
restated declaration of trust, the institutional trustee will
hold title to the Securities and the Warrants for the benefit of
the holders of the Trust Securities. The payment upon
maturity of the Certificates out of money legally available to
the Trust is fully and unconditionally guaranteed by Citigroup
Funding and Citigroup Inc. to the extent described under
Description of the Certificate Guarantee. The
Certificate Guarantee will be held by U.S. Bank National
Association, the guarantee trustee, for the benefit of the
holders of the Certificates. The Certificate Guarantee does not
cover payment upon maturity when the Trust does not have
sufficient legally available funds to make this payment. In such
event, the remedies of a holder of the Certificates are to:
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vote to direct the institutional trustee to enforce the
institutional trustees rights under the Securities
and/or
the
Warrants,
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if the institutional trustee fails to enforce its rights against
Citigroup Funding or Citigroup Inc., initiate a proceeding
against Citigroup Funding or Citigroup Inc. to enforce the
institutional trustees rights under the Securities
and/or
the
Warrants, or
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if the failure by the Trust to make the distribution payment is
attributable to the failure of Citigroup Funding to pay amounts
in respect of the Securities
and/or
the
Warrants, institute a proceeding directly against Citigroup
Funding or Citigroup Inc. for enforcement of payment to such
holder of the amounts owed on such holders
pro rata
interest in the Securities and the Warrants.
|
The aggregate number of Certificates to be issued will
be ,
as described in Underwriting. The Certificates will
be issued in fully registered form. The Certificates will not be
issued in bearer form. See Book-Entry
Procedures and Settlement below.
Payment
at Maturity
The Certificates will mature
on ,
2013, subject to acceleration to the accelerated maturity date
upon an acceleration event. See Acceleration
of Maturity Date; Enforcement of Rights below. On the
maturity date, holders of the Certificates will be entitled to
receive for each Certificate they hold, to the extent the Trust
has assets available, a payment equal to the sum of $10 and a
Supplemental Distribution Amount, which may be positive or zero.
The amount payable to you at maturity is dependent upon the
Ending Value of the S&P
500
®
Index on the Valuation Date, provided, however, that the payment
you receive at maturity will not be less than the amount of your
original investment in the Certificates.
25
Supplemental
Distribution Amount
The Supplemental Distribution Amount will be based on the amount
by which the Ending Value exceeds the Starting Value, expressed
as a percentage, and on the Participation Rate. The Supplemental
Distribution Amount will equal the product of:
$10 × Index Return × Participation Rate
provided that the Supplemental Distribution Amount will not be
less than zero.
The Index Return, which is presented in this
offering document as a percentage, will equal the following
fraction:
Ending Value Starting Value
Starting Value
The Starting Value will be the closing value of the
S&P
500
®
Index on the Pricing Date.
The Ending Value will be the closing value of the
S&P
500
®
Index on the Valuation Date.
The Pricing Date means the date on which the
Certificates are priced for initial sale to the public.
The Valuation Date will be the third Index Business
Day before the maturity date.
The Participation Rate is expected to be
approximately 80% to 90% (to be determined on the Pricing Date)
of the Index Return.
If the closing value of the S&P
500
®
Index is not available on any Index Business Day because of a
Market Disruption Event or otherwise, the value of the S&P
500
®
Index for that Index Business Day, unless deferred by the
calculation agent as described below, will be the arithmetic
mean, as determined by the calculation agent, of the value of
that index obtained from as many dealers in equity securities
(which may include Citigroup Global Markets or any of our other
affiliates), but not exceeding three such dealers, as will make
such value available to the calculation agent. The determination
of the value of the S&P
500
®
Index by the calculation agent in the event of a Market
Disruption Event may be deferred by the calculation agent for up
to five consecutive Index Business Days on which a Market
Disruption Event is occurring, but not past the Index Business
Day prior to maturity.
An Index Business Day means a day, as determined by
the calculation agent, on which the S&P
500
®
Index or any successor index is calculated and published and on
which securities comprising more than 80% of the value of the
S&P
500
®
Index on such day are capable of being traded on their relevant
exchanges or markets during the one-half hour before the
determination of the closing value of the S&P
500
®
Index. All determinations made by the calculation agent will be
at the sole discretion of the calculation agent and will be
conclusive for all purposes and binding on the Trust, Citigroup
Funding, Citigroup Inc. and the beneficial owners of the
Certificates, absent manifest error.
A Market Disruption Event means, as determined by
the calculation agent in its sole discretion, the occurrence or
existence of any suspension of or limitation imposed on trading
(by reason of movements in price exceeding limits permitted by
any relevant exchange or market or otherwise) of, or the
unavailability, through a recognized system of public
dissemination of transaction information, for a period longer
than two hours, or during the one-half hour period preceding the
close of trading, on the applicable exchange or market, of
accurate price, volume or related information in respect of
(a) stocks which then comprise 20% or more of the value of
the
S&P 500
®
Index or any successor index, (b) any options or futures
contracts, or any options on such futures contracts relating to
the S&P
500
®
Index or any successor index, or (c) any options or futures
contracts relating to stocks which then comprise 20% or more of
the value of the S&P
500
®
Index or any successor index on any exchange or market if, in
each case, in the determination of the calculation agent, any
such suspension, limitation or unavailability is material. For
the purpose of determining whether a Market Disruption Event
exists at any time, if trading in a security included in the
S&P
500
®
Index is materially suspended or materially limited at that
time, then the relevant percentage contribution of that security
to the value of the S&P
500
®
Index will be based on a comparison of the portion of the value
of the index attributable to that security relative to the
overall value of the S&P
500
®
Index, in each case immediately before that suspension or
limitation.
26
Maturity
Payment Hypothetical Examples
The Index Return and, therefore, the Supplemental Distribution
Amount, is dependent on the Ending Value of the S&P
500
®
Index. Because the value of the S&P
500
®
Index may be subject to significant variations over the term of
the Certificates, it is not possible to present a chart or table
illustrating a complete range of possible payments at maturity.
The examples of hypothetical maturity payments set forth below
are intended to illustrate the effect of different Ending Values
of the S&P
500
®
Index on the amount payable on the Certificates at maturity. All
of the hypothetical examples assume the following:
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Investment in the Certificates: $10;
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Starting Value of the S&P
500
®
Index: 1,280.0;
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Participation Rate: 85%;
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Term of the Certificates: 5 years; and
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The Certificates are held to maturity and are not exchanged for
the Securities and the Warrants.
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As demonstrated by the table below, if the Index Return is 0% or
less, you will receive an amount at maturity equal to $10 per
Certificate, the amount of your initial investment in the
Certificates. If the Index Return is greater than 0%, you will
receive an amount at maturity that is greater than your initial
investment in the Certificates.
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Ending Value
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Supplemental
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Total
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Annualized
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of the S&P
500
®
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Distribution
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Return on the
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Return on the
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Index
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Index Return
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Amount
(1)
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Maturity
Payment
(2)
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Certificates
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Certificates
(3)
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384.0
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−70.00
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%
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$
|
0.00
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$
|
10.00
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0.00
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%
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0.00
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%
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512.0
|
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−60.00
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0.00
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10.00
|
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0.00
|
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0.00
|
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640.0
|
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−50.00
|
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0.00
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10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
768.0
|
|
|
|
|
−40.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
896.0
|
|
|
|
|
−30.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
960.0
|
|
|
|
|
−25.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
1,024.0
|
|
|
|
|
−20.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
1,088.0
|
|
|
|
|
−15.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
1,152.0
|
|
|
|
|
−10.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
1,216.0
|
|
|
|
|
−5.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
1,248.0
|
|
|
|
|
−2.50
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
1,280.0
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
1,344.0
|
|
|
|
|
5.00
|
|
|
|
|
0.43
|
|
|
|
|
10.43
|
|
|
|
|
4.25
|
|
|
|
|
0.84
|
|
|
1,408.0
|
|
|
|
|
10.00
|
|
|
|
|
0.85
|
|
|
|
|
10.85
|
|
|
|
|
8.50
|
|
|
|
|
1.64
|
|
|
1,472.0
|
|
|
|
|
15.00
|
|
|
|
|
1.28
|
|
|
|
|
11.28
|
|
|
|
|
12.75
|
|
|
|
|
2.43
|
|
|
1,536.0
|
|
|
|
|
20.00
|
|
|
|
|
1.70
|
|
|
|
|
11.70
|
|
|
|
|
17.00
|
|
|
|
|
3.19
|
|
|
1,600.0
|
|
|
|
|
25.00
|
|
|
|
|
2.13
|
|
|
|
|
12.13
|
|
|
|
|
21.25
|
|
|
|
|
3.93
|
|
|
1,664.0
|
|
|
|
|
30.00
|
|
|
|
|
2.55
|
|
|
|
|
12.55
|
|
|
|
|
25.50
|
|
|
|
|
4.65
|
|
|
1,792.0
|
|
|
|
|
40.00
|
|
|
|
|
3.40
|
|
|
|
|
13.40
|
|
|
|
|
34.00
|
|
|
|
|
6.03
|
|
|
1,920.0
|
|
|
|
|
50.00
|
|
|
|
|
4.25
|
|
|
|
|
14.25
|
|
|
|
|
42.50
|
|
|
|
|
7.34
|
|
|
2,048.0
|
|
|
|
|
60.00
|
|
|
|
|
5.10
|
|
|
|
|
15.10
|
|
|
|
|
51.00
|
|
|
|
|
8.59
|
|
|
2,176.0
|
|
|
|
|
70.00
|
|
|
|
|
5.95
|
|
|
|
|
15.95
|
|
|
|
|
59.50
|
|
|
|
|
9.79
|
|
|
2,304.0
|
|
|
|
|
80.00
|
|
|
|
|
6.80
|
|
|
|
|
16.80
|
|
|
|
|
68.00
|
|
|
|
|
10.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Supplemental Distribution Amount = $10.00 × Index Return
× Participation Rate, provided that the Supplemental
Distribution Amount will not be less than zero.
|
|
(2)
|
|
Maturity payment = $10.00 + Supplemental Distribution Amount.
|
|
(3)
|
|
Compounded annually.
|
The examples above are for purposes of illustration only. The
actual maturity payment will depend on the actual Supplemental
Distribution Amount, which, in turn, will depend on the actual
Starting Value, Ending Value and Participation Rate.
27
Discontinuance
of the S&P
500
®
Index
If S&P discontinues publication of the S&P
500
®
Index and if S&P or another entity publishes a successor or
substitute index that the calculation agent determines, in its
sole discretion, to be comparable to the S&P
500
®
Index, then the value of the S&P
500
®
Index will be determined by reference to the value of that
index, which we refer to as a successor index.
Upon any selection by the calculation agent of a successor
index, the calculation agent will cause notice to be furnished
to us and the institutional trustee, who will provide notice of
the selection of the successor index to the registered holders
of the Certificates, the Securities and the Warrants.
If S&P discontinues publication of the S&P
500
®
Index and a successor index is not selected by the calculation
agent or is no longer published on any date of determination of
the value of the S&P
500
®
Index, the value to be substituted for the S&P
500
®
Index for that date will be a value computed by the calculation
agent for that date in accordance with the procedures last used
to calculate the S&P
500
®
Index prior to any such discontinuance.
If S&P discontinues publication of the S&P
500
®
Index prior to the determination of the Supplemental
Distribution Amount and the calculation agent determines that no
successor index is available at that time, then on each Index
Business Day until the earlier to occur of (a) the
determination of the Supplemental Distribution Amount and
(b) a determination by the calculation agent that a
successor index is available, the calculation agent will
determine the value that is to be used in computing the value of
the S&P
500
®
Index as described in the preceding paragraph. The calculation
agent will cause notice of daily closing values to be published
not less often than once each month in
The Wall Street
Journal
(or another newspaper of general circulation).
Notwithstanding these alternative arrangements, discontinuance
of the publication of the S&P
500
®
Index may adversely affect trading in the Certificates, the
Securities and the Warrants.
If a successor index is selected or the calculation agent
calculates a value as a substitute for the S&P
500
®
Index as described above, the successor index or value will be
substituted for the S&P
500
®
Index for all purposes, including for purposes of determining
whether an Index Business Day or Market Disruption Event occurs.
Notwithstanding these alternative arrangements, discontinuance
of the publication of the S&P
500
®
Index may adversely affect the market value of the Certificates,
the Securities and the Warrants.
All determinations made by the calculation agent will be at the
sole discretion of the calculation agent and will be conclusive
for all purposes and binding on the Trust, Citigroup Funding,
Citigroup Inc. and the beneficial owners of the Certificates,
the Securities and the Warrants, absent manifest error.
Alteration
of Method of Calculation
If at any time the method of calculating the S&P
500
®
Index or a successor index is changed in any material respect,
or if the S&P
500
®
Index or a successor index is in any other way modified so that
the value of the S&P
500
®
Index or the successor index does not, in the opinion of the
calculation agent, fairly represent the value of that index had
the changes or modifications not been made, then, from and after
that time, the calculation agent will, at the close of business
in New York, New York, make those adjustments as, in the good
faith judgment of the calculation agent, may be necessary in
order to arrive at a calculation of a value of a stock index
comparable to the S&P
500
®
Index or the successor index as if the changes or modifications
had not been made, and calculate the value of the index with
reference to the S&P
500
®
Index or the successor index. Accordingly, if the method of
calculating the S&P
500
®
Index or the successor index is modified so that the value of
the S&P
500
®
Index or the successor index is a fraction or a multiple of what
it would have been if it had not been modified, then the
calculation agent will adjust the S&P
500
®
Index in order to arrive at a value of the index as if it had
not been modified.
Exchange
Right
Beginning on the date the Certificates are issued, you will have
the right, by providing notice to your broker and instructing
your broker to forward that notice to the institutional trustee
for the Certificates on any Business Day, to exchange the
Certificates you then hold for a
pro rata
portion of the
assets of the Trust, which consist of the Securities and the
Warrants. If you choose to exercise your exchange right, you
will receive for each $10 principal amount of Certificates you
then hold one Security with a $10 face amount and one Warrant
with a $10 notional
28
amount. In order to exercise your exchange right, your account
must be approved for options trading. You should consult with
your financial advisor to determine whether your account would
meet the options trading requirements. You will be able to
exercise your exchange right through and including the Business
Day prior to the earlier of:
|
|
|
|
|
the Valuation Date; and
|
|
|
|
if an acceleration event occurs as described under
Acceleration of Maturity Date; Enforcement of
Rights, the date of the occurrence of the acceleration
event.
|
If you do not exercise your exchange right, and you are a
U.S. Holder as defined under Certain United States
Federal Income Tax Considerations in this offering
document, for U.S. income tax purposes any gain that you
recognize at maturity or on other disposition of the
Certificates will be short-term capital gain. You cannot
recognize long-term capital gain from your investment in the
Certificates unless you exercise your exchange right, then
dispose of either the Securities or the Warrants, and then hold
the remaining instrument for more than one year after that
disposition. For example, if the value of the S&P
500
®
Index increases, you will recognize long-term capital gain only
if you exercise your exchange right, dispose of the Warrants,
and hold the Securities for more than one year after disposing
of the Warrants. As discussed above, however, if you do choose
to exercise your exchange right and hold only the Securities or
only the Warrants, you may receive less than the principal
amount of your investment at maturity. You should read the
discussion of the treatment of the Certificates under
Certain United States Federal Income Tax
Considerations in this offering document.
We will deliver the Securities and the Warrants to you within
three Business Days after the date on which the institutional
trustee receives a valid notice of exchange (such date of
receipt of a valid notice of exchange, the Actual Exchange
Date), as long as the institutional trustee has received
the notice of exchange and your Certificates by 11:00 a.m.,
New York City time, on the Actual Exchange Date and your account
is approved for options trading.
Business Day means any day that is not a Saturday, a
Sunday or a day on which securities exchanges or banking
institutions or trust companies in The City of New York are
authorized or obligated by law or executive order to close.
Acceleration
of Maturity Date; Enforcement of Rights
If at any time an acceleration event occurs, the individual
trustees will give written instructions to the institutional
trustee to dissolve the Trust and, after satisfaction of
creditors of the Trust, cause the accelerated maturity payment
with respect to each Certificate to be distributed to the
holders of the Certificates in liquidation of such holders
interests in the Trust, as soon as practicable following the
occurrence of the acceleration event.
The accelerated maturity payment with respect to each
Certificate will be paid out of amounts received by the Trust
from Citigroup Funding in respect of the Securities and the
Warrants and will be equal to the sum of (A) the initial
principal amount of $10.00 per Certificate and (B) the
Supplemental Distribution Amount as of the accelerated maturity
date. The amount of the accelerated maturity payment that may be
distributed to holders of the Certificates upon a dissolution
and liquidation of the Trust is uncertain.
The accelerated maturity date will be the date of the occurrence
of the event or events constituting an acceleration event.
An acceleration event will occur upon the occurrence of
(1) a tax event, (2) an investment
company event or (3) a bankruptcy event,
each of which is described below.
A tax event will occur if Citigroup Funding or Citigroup Inc.
requests, receives and delivers to the individual trustees an
opinion of nationally recognized independent tax counsel
experienced in such matters indicating that:
(1) on or after the date of this offering document, one or
more of the following has occurred:
|
|
|
|
|
an amendment to, change in or announced proposed change in the
laws, or any regulations thereunder, of the United States or any
political subdivision or taxing authority thereof or therein,
|
29
|
|
|
|
|
a judicial decision interpreting, applying, or clarifying such
laws or regulations,
|
|
|
|
an administrative pronouncement or action that represents an
official position, including a clarification of an official
position, of the governmental authority or regulatory body
making such administrative pronouncement or taking such
action, or
|
|
|
|
a threatened challenge asserted in connection with an audit of
Citigroup Funding, Citigroup Inc. or any subsidiaries of
Citigroup Inc. or the Trust, or a threatened challenge asserted
in writing against any other taxpayer that has raised capital
through the issuance of securities that are substantially
similar to the Securities, the Warrants or the
Certificates; and
|
(2) there is more than an insubstantial risk that:
|
|
|
|
|
the Trust is, or will be, subject to U.S. federal income
tax with respect to income accrued or received on the Securities
or the Warrants, or
|
|
|
|
the Trust is, or will be, subject to more than a
de minimis
amount of other taxes, duties or other governmental charges.
|
An investment company event will occur if Citigroup Funding or
Citigroup Inc. requests, receives and delivers to the individual
trustees an opinion of nationally recognized independent legal
counsel experienced in such matters indicating that as a result
of the occurrence on or after the date of this offering document
of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, the Trust is
or will be considered an investment company that is required to
be registered under the Investment Company Act.
A bankruptcy event will occur if either of the following takes
place:
(1) the entry of a decree or order
|
|
|
|
|
of relief in respect of Citigroup Funding and Citigroup Inc. by
a court having jurisdiction in the premises in an involuntary
case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law,
|
|
|
|
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of Citigroup Funding
and Citigroup Inc., or of any substantial part of the property
of Citigroup Funding and Citigroup Inc., or
|
|
|
|
ordering the winding up or liquidation of affairs of Citigroup
Funding and Citigroup Inc., and, in each case, the continuance
of any such decree or order unstayed and in effect for a period
of 90 consecutive days; or
|
(2) an action by Citigroup Funding and Citigroup Inc. to:
|
|
|
|
|
commence a voluntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law,
|
|
|
|
consent to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or other
similar official of Citigroup Funding and Citigroup Inc., or of
any substantial part of the property of Citigroup Funding and
Citigroup Inc.,
|
|
|
|
make an assignment for the benefit of their respective creditors,
|
|
|
|
admit in writing their inability to pay their respective debts
generally as they become due, or
|
|
|
|
take corporate action in furtherance of any of the foregoing.
|
On the date fixed for any payment of the accelerated maturity
payment, the Certificates and the common securities will no
longer be deemed to be outstanding and each Certificate and
common security will be deemed to represent the right to receive
the accelerated maturity payment. If the accelerated maturity
payment can be paid only in part because the Trust has
insufficient assets available to pay in full such amounts, then
the amounts payable
30
directly by the Trust in respect of the Certificates will be
paid on a
pro rata
basis. In addition, in the case of a
default by Citigroup Funding or Citigroup Inc. on their
obligations under the Certificate Guarantee, the holders of the
Certificates will have a preference over the holders of the
common securities with respect to amounts owed on the
Trust Securities.
The phrase
pro rata
means, with respect to
any payment, distribution, or treatment, proportionately to each
holder of Trust Securities according to the aggregate
beneficial interests in the assets of the Trust represented by
the Trust Securities held by the relevant holder in
relation to the aggregate beneficial interests in the assets of
the Trust represented by all Trust Securities outstanding.
If an acceleration event has occurred and is continuing, any
funds available to make a payment will be paid first to each
holder of the Certificates proportionately according to the
aggregate beneficial interests in the assets of the Trust
represented by the Certificates held by the relevant holder
relative to the aggregate beneficial interests in the assets of
the Trust represented by all Certificates outstanding. Only
after satisfaction of all amounts owed to the holders of the
Certificates will payment be made to each holder of common
securities proportionately according to the aggregate beneficial
interests in the assets of the Trust represented by the common
securities held by the relevant holder relative to the aggregate
beneficial interests in the assets of the Trust represented by
all common securities outstanding.
Subject to the institutional trustee obtaining a tax opinion as
described below, the holders of a majority of the outstanding
Certificates have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
institutional trustee, or direct the exercise of any trust or
power conferred upon the institutional trustee under the amended
and restated declaration of trust. In the case of any action to
be taken by the institutional trustee as holder of the
Securities and the Warrants, the institutional trustee shall
cast its votes as directed by each holder of outstanding
Certificates with respect to the proportionate number of
Securities and Warrants represented by such holders
Certificates. The institutional trustee will notify all holders
of Certificates of any notice of default received from the
indenture trustee with respect to the Securities. Except with
respect to directing the time, method and place of conducting a
proceeding for a remedy available to the institutional trustee,
the institutional trustee, as holder of the Securities and the
Warrants, will not take any actions with respect to the
Securities or the Warrants or exercise any right to rescind or
annul a declaration that the accelerated maturity payment shall
be due and payable unless it has obtained an opinion of a
nationally recognized independent tax counsel experienced in
such matters to the effect that as a result of such action, the
Trust will not fail to be classified as a grantor trust for
U.S. federal income tax purposes.
If the institutional trustee fails to enforce its rights under
the Securities and the Warrants, any holder of Certificates can
directly institute a legal proceeding against Citigroup Funding
to enforce the institutional trustees rights under the
Securities and the Warrants, without first instituting a legal
proceeding against the institutional trustee or any other person
or entity. If Citigroup Funding fails to pay amounts owed on the
Securities or the Warrants on the date they are otherwise
payable, then a holder of Certificates may also directly
institute a direct action in respect of the amounts owed on the
holders
pro rata
interest in the Securities or the
Warrants on or after the due date specified in the Securities
and the Warrants, without first directing the institutional
trustee to enforce the terms of the Securities and the Warrants
or instituting a legal proceeding directly against Citigroup
Funding to enforce the institutional trustees rights under
the Securities and the Warrants. The holders of Certificates
will not be able to exercise directly any other remedy available
to the holder of the Securities and the Warrants. In connection
with a direct action, Citigroup Funding will be subrogated to
the rights of a holder of Certificates under the declaration to
the extent of any payment made by Citigroup Funding to that
holder of Certificates in such direct action.
A waiver of an acceleration event under the indenture by the
institutional trustee at the direction of the holders of the
Certificates will constitute a waiver of the corresponding
acceleration event under the amended and restated declaration of
trust.
Holders of Certificates may give any required approval or
direction at a separate meeting of holders of Certificates
convened for this purpose, at a meeting of holders of
Trust Securities or by written consent. The individual
trustees will cause a notice of any meeting at which holders of
Certificates are entitled to vote, or of any matter upon which
action by written consent of the holders is to be taken, to be
mailed to each holder of record of Certificates. Each notice
will include a statement setting forth the date of such meeting
or the date by which the
31
action is to be taken, a description of any resolution proposed
for adoption at the meeting on which the holders are entitled to
vote or of such matter upon which written consent is sought and
instructions for the delivery of proxies or consents. No vote or
consent of the holders of Certificates will be required for the
Trust to cancel the Certificates in accordance with the amended
and restated declaration of trust. It is anticipated that the
only holder of Certificates issued in book-entry form will be
Cede & Co., as nominee of The Depository
Trust Company and each beneficial owner of Certificates
will be permitted to exercise the rights of holders of
Certificates only indirectly through The Depository
Trust Company and its participants.
Notwithstanding that holders of Certificates are entitled to
vote or consent under any of the circumstances described above,
any of the Certificates that are owned at that time by Citigroup
Funding or any entity directly or indirectly controlling or
controlled by, or under direct or indirect common control with,
Citigroup Funding, will not be entitled to vote or consent and
will, for purposes of such vote or consent, be treated as if
they were not outstanding.
Periodic
Distributions
We will not make any periodic payments of interest or any other
periodic payments on the Certificates. You will not be entitled
to receive dividend payments or other distributions, if any,
made on the stocks included in the S&P
500
®
Index.
Payment
Procedures
Payments on the Certificates will be payable to the holders of
the Certificates as they appear on the books and records of the
Trust at the close of business on the relevant record dates.
While the Certificates remain in book-entry only form, the
relevant record date for any maturity payment or accelerated
maturity payment with respect to the Certificates will be five
Business Days prior to the date on which the Trust receives any
security payment or warrant payment or accelerated security
payment or warrant payment, as the case may be, under the
Securities and the Warrants. The relevant record date for the
common securities will be the same record date as for the
Certificates.
If the Certificates will not continue to remain in book-entry
only form, the relevant record date will conform to the rules of
any securities exchange on which they are listed and, if none,
will be 15 days before the relevant payment date, which
payment date will correspond to the date on which payments are
made in respect of, and in accordance with the terms of, the
Securities and the Warrants.
Payments on any Certificates that are not punctually made on the
relevant payment date, as a result of Citigroup Funding having
failed to make the security payment or warrant payment or the
accelerated security payment or warrant payment, as the case may
be, under the Securities or the Warrants, will cease to be
payable to the persons in whose name the Certificates are
registered on the relevant record date. The defaulted payment on
the Certificates will instead be payable to the persons in whose
name those Certificates are registered on a special record date
which will be the date on which the Trust actually receives the
amount of the defaulted payment under the Securities or the
Warrants, as applicable.
If any date on which the maturity payment or accelerated
maturity payment, as the case may be, is payable on the
Certificates is not a Business Day, then the relevant payment
will be made on the next succeeding day that is a Business Day
and without any interest or other payment in respect of any such
delay, with the same force and effect as if made on that date.
If that Business Day is in the next succeeding calendar year,
the relevant payment will be made on the immediately preceding
Business Day, with the same force and effect as if made on that
date.
Payments in respect of the Certificates represented by global
certificates (as defined below under
Book-Entry Procedures and Settlement)
will be made to DTC, which will credit the relevant accounts at
DTC on the relevant scheduled payment date. In the case of
Certificates in the form of certificated securities, if any,
payments will be made by check mailed to the holders
address as it appears on the register.
Voting
Rights
Except as described in this offering document under
Acceleration of Maturity Date; Enforcement of
Rights and Description of the Certificate
Guarantee Modifications of the Guarantee;
Assignment, and except
32
as provided under the Delaware Statutory Trust Act, the
Trust Indenture Act and as otherwise required by law and
the amended and restated declaration of trust, the holders of
the Certificates will have no voting rights.
In the event the consent of the institutional trustee, as the
holder of the Securities and the Warrants, is required under the
indenture or the warrant agreement, as applicable, with respect
to any amendment, modification or termination of the indenture
or the warrant agreement, as applicable, the institutional
trustee will request the written direction of the holders of the
outstanding Trust Securities with respect to the amendment,
modification or termination and will vote with respect to the
amendment, modification or termination as directed by each
Holder of outstanding Trust Securities with respect to the
proportionate number of Securities or Warrants represented by
such holders Trust Securities. The institutional
trustee will be under no obligation to take any such action in
accordance with the directions of the holders of the
Trust Securities unless the institutional trustee has
obtained an opinion of a nationally recognized independent tax
counsel experienced in such matters to the effect that for
U.S. federal income tax purposes the Trust will not be
classified as other than a grantor trust.
The procedures by which holders of the Certificates may exercise
their voting rights are described below under
Book-Entry Procedures and Settlement.
Holders of the Certificates will have no rights to appoint or
remove the trustees, who may be appointed, removed or replaced
solely by Citigroup Funding as the indirect or direct holder of
all of the common securities.
Modification
of the Amended and Restated Declaration of Trust
The amended and restated declaration of trust may be modified
and amended if approved by the individual trustees, and, in
certain circumstances, the institutional trustee and the
Delaware trustee, provided that, if any proposed amendment to
the amended and restated declaration of trust provides for, or
the individual trustees otherwise propose to effect,
(1) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities,
whether by way of amendment to the amended and restated
declaration of trust or otherwise, or
(2) the dissolution,
winding-up
or termination of the Trust other than pursuant to the terms of
the amended and restated declaration of trust,
then the holders of the Trust Securities, voting together
as a single class, will be entitled to vote on the amendment or
proposal and the amendment or proposal will not be effective
except with the approval of the holders of at least a majority
of the Trust Securities affected thereby. If any amendment
or proposal referred to in clause (1) above would adversely
affect only the Certificates or only the common securities, then
only holders of the affected class will be entitled to vote on
the amendment or proposal and the amendment or proposal will not
be effective except with the approval of a majority of that
class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may
be made to the amended and restated declaration of trust if the
amendment or modification would:
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cause the Trust to fail to be classified as a grantor trust for
U.S. federal income tax purposes,
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reduce or otherwise adversely affect the powers of the
institutional trustee in contravention of the
Trust Indenture Act, or
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cause the Trust to be deemed an investment company which is
required to be registered under the Investment Company Act.
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Merger,
Consolidation or Amalgamation of the Trust
The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to, any corporation or
other entity, except as described below. The Trust may, with the
consent of the individual trustees and without the consent of
the holders of the Trust Securities, the Delaware trustee
or the institutional trustee consolidate, amalgamate, merge with
or into,
33
or be replaced by a trust organized as such under the laws of
the United States, any state thereof or the District of
Columbia, provided that:
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the successor entity either (A) expressly assumes all of
the obligations of the Trust under the Trust Securities or
(B) substitutes for the Trust Securities other
successor securities having substantially the same terms as the
Trust Securities, so long as the successor securities rank
the same as the Trust Securities with respect to
distributions and payments upon liquidation, maturity and
otherwise,
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Citigroup Funding expressly acknowledges a trustee of such
successor entity possessing the same powers and duties as the
institutional trustee in its capacity as the holder of the
Securities and the Warrants,
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successor securities to the Certificates are listed, or any
successor securities to the Certificates will be listed upon
notification of issuance, on any national securities exchange or
with any organization on which the Certificates are then listed
or quoted,
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the merger, consolidation, amalgamation or replacement does not
cause the Certificates, including any successor securities, to
be downgraded by any nationally recognized statistical rating
organization,
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the merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the
holders of the Trust Securities, including any successor
securities, in any material respect, other than with respect to
any dilution of the holders interest in the new entity,
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the successor entity has a purpose identical to that of the
Trust,
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prior to the merger, consolidation, amalgamation or replacement,
the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to
the effect that:
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(A)
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the merger, consolidation, amalgamation or replacement will not
adversely affect the rights, preferences and privileges of the
holders of the Trust Securities, including any successor
securities, in any material respect, other than with respect to
any dilution of the holders interest in the new entity,
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(B)
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following the merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be
required to register as an investment company under the
Investment Company Act, and
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(C)
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following the merger, consolidation, amalgamation or
replacement, the Trust or the successor entity will continue to
be classified as a grantor trust for U.S. federal income
tax purposes,
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Citigroup Funding guarantees the obligations of the successor
entity under the successor securities at least to the extent
provided by the Certificate Guarantee, and
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Citigroup Inc. guarantees Citigroup Fundings obligations
to the same extent and in the same manner as Citigroup Funding
guarantees the obligations of the successor entity.
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Notwithstanding the foregoing, the Trust will not, without the
consent of holders of all of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if, in the opinion
of a nationally recognized independent tax counsel experienced
in such matters, the consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be
classified as other than a grantor trust for U.S. federal
income tax purposes. In addition, so long as any Certificates
are outstanding and are not held entirely by Citigroup Funding,
the Trust may not voluntarily liquidate, dissolve,
wind-up
or
terminate except as described above under
Acceleration of Maturity Date; Enforcement of
Rights.
Book-Entry
Procedures and Settlement
The Depository Trust Company (DTC) will act as
securities depository for the Certificates. The Certificates
will be issued only as fully-registered securities registered in
the name of Cede & Co. (DTCs nominee). One or
more fully-registered global securities, representing the total
aggregate number of the Certificates, will be issued and will be
deposited with DTC.
34
Following the issuance of a global security in registered form,
DTC will credit the accounts of its participants with the
Certificates upon our instructions. Only persons who hold
directly or indirectly through financial institutions that are
participants in DTC can hold beneficial interests in the global
securities. Because the laws of some jurisdictions require
certain types of purchasers to take physical delivery of such
securities in definitive form, you may encounter difficulties in
your ability to own, transfer or pledge beneficial interests in
a global security.
So long as DTC or its nominee is the registered owner of a
global security, we and the institutional trustee will treat DTC
as the sole owner or holder of the Certificates for purposes of
the amended and restated declaration of trust. Therefore, except
as set forth below, you will not be entitled to have
Certificates registered in your name or to receive physical
delivery of certificates representing the Certificates.
Accordingly, you will have to rely on the procedures of DTC and
the participant in DTC through whom you hold your beneficial
interest in order to exercise any rights of a holder under the
amended and restated declaration of trust. We understand that
under existing practices, DTC would act upon the instructions of
a participant or authorize that participant to take any action
that a holder is entitled to take.
You may elect to hold interests in the global securities in the
United States through either DTC or outside the United States
through Clearstream Banking, société anonyme
(Clearstream), or Euroclear Bank, S.A./N.V. or its
successor, as operator of the Euroclear System
(Euroclear), if you are a participant of such
system, or indirectly through organizations that are
participants in such systems. Interests held through Clearstream
and Euroclear will be recorded on DTCs books as being held
by the U.S. depository for each of Clearstream and
Euroclear, which U.S. depositaries will in turn hold
interests on behalf of their participants customers
securities accounts.
As long as the Certificates are represented by the global
securities, we will pay the maturity payment or accelerated
maturity payment, as the case may be, on the Certificates to or
as directed by DTC as the registered holder of the global
securities. Payments to DTC will be in immediately available
funds by wire transfer. DTC, Clearstream or Euroclear, as
applicable, will credit the relevant accounts of their
participants on the applicable date. None of the Trust,
Citigroup Funding, Citigroup Inc. and the institutional trustee
will be responsible for making any payments to participants or
customers of participants or for maintaining any records
relating to the holdings of participants and their customers,
and you will have to rely on the procedures of the depository
and its participants.
We have been advised by DTC, Clearstream and Euroclear,
respectively, as follows:
The
Depository Trust Company
DTC has advised us that it is a limited-purpose trust company
organized under the New York Banking Law, a banking
organization within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a clearing
corporation within the meaning of the New York Uniform
Commercial Code and a clearing agency registered
pursuant to the provisions of Section 17A of the Exchange
Act. DTC holds securities deposited with it by its participants
and facilitates the settlement of transactions among its
participants in such securities through electronic computerized
book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities
certificates. DTCs participants include securities brokers
and dealers, banks, trust companies, clearing corporations and
certain other organizations, some of whom (and/or their
representatives) own DTC. Access to DTCs book-entry system
is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
According to DTC, the foregoing information with respect to DTC
has been provided to the financial community for informational
purposes only and is not intended to serve as a representation,
warranty or contract modification of any kind.
Clearstream
Clearstream has advised us that it was incorporated as a limited
liability company under the laws of the Grand Duchy of
Luxembourg. Clearstream is owned by Cedel International,
société anonyme, and Deutsche Börse 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
35
Clearstream customers through electronic book-entry changes in
accounts of Clearstream customers, thus eliminating the need for
physical movement of certificates. Transactions may be settled
by Clearstream in many currencies, including U.S. dollars.
Clearstream provides to its customers, among other things,
services for safekeeping, administration, clearance and
settlement of internationally traded securities, securities
lending and borrowing. Clearstream also deals with domestic
securities markets in over 30 countries through established
depository and custodial relationships. Clearstream interfaces
with domestic markets in a number of countries. Clearstream has
established an electronic bridge with Euroclear Bank S.A./N.V.,
the operator of Euroclear, or the Euroclear operator, 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, and may include the underwriters for the Certificates.
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 Certificates 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.
Euroclear
Euroclear has advised us that it was created in 1968 to hold
securities for participants of Euroclear and to clear and settle
transactions between Euroclear participants through simultaneous
electronic book-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
U.S. dollars and Japanese yen. Euroclear 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.
Euroclear is operated by the Euroclear operator, under contract
with Euroclear plc, a company organized under the laws of
England and Wales. The Euroclear operator conducts all
operations, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear
operator, not Euroclear plc. Euroclear plc establishes policy
for Euroclear 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 for the
Certificates. Indirect access to Euroclear 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 supervised as a Belgian bank by the
Belgian Banking and Finance Commission and is overseen as the
operator of a securities settlement system by the National Bank
of Belgium.
The Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, or the
Euroclear Terms and Conditions, and applicable Belgian law
govern securities clearance accounts and cash accounts with the
Euroclear operator. Specifically, these terms and conditions
govern:
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transfers of securities and cash within Euroclear;
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withdrawal of securities and cash from Euroclear; and
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receipt of payments with respect to securities in Euroclear.
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All securities in Euroclear 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.
36
Distributions with respect to the Certificates 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.
Settlement
You will be required to make your initial payment for the
Certificates in immediately available funds. Secondary market
trading between DTC participants will occur in the ordinary way
in accordance with DTC rules and will be settled in immediately
available funds using DTCs
Same-Day
Funds Settlement System. Secondary market trading between
Clearstream customers
and/or
Euroclear participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of
Clearstream 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 customers or Euroclear
participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European
international clearing system by U.S. depository; however,
such cross-market transactions will require delivery of
instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines (based
on the applicable European time). The relevant European
international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to the
U.S. depository to take action to effect final settlement
on its behalf by delivering or receiving the Certificates in
DTC, and making or receiving payment in accordance with normal
procedures for
same-day
funds settlement applicable to DTC. Clearstream customers and
Euroclear participants may not deliver instructions directly to
their respective U.S. depositaries.
Because of time-zone differences, credits of the Certificates
received in Clearstream or Euroclear as a result of a
transaction with a DTC participant will be made during
subsequent securities settlement processing and dated the
business day following the DTC settlement date. Such credits or
any transactions in such Certificates settled during such
processing will be reported to the relevant Clearstream
customers or Euroclear participants on such business day. Cash
received in Clearstream or Euroclear as a result of sales of the
Certificates by or through a Clearstream customer 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 or Euroclear cash account only as of the business
day following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of the
Certificates among participants of DTC, Clearstream and
Euroclear, they are under no obligation to perform or continue
to perform such procedures and such procedures may be
discontinued at any time.
Definitive
Certificates
A beneficial owner of book-entry Certificates represented by a
global security may exchange the Certificates for definitive
(paper) certificates representing the Certificates only if:
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DTC is unwilling or unable to continue as depository for such
global security and we are unable to find a qualified successor
within 90 days;
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at any time DTC ceases to be a clearing agency registered under
the Exchange Act; or
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the individual trustees, with the consent of Citigroup Funding
and Citigroup Inc., decide to discontinue use of the system of
book-entry transfers through DTC or any successor depository.
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If any of the events described above occurs, we will issue
definitive Certificates in certificated form in accordance with
DTCs instructions.
Information
Concerning the Institutional Trustee
The institutional trustee, prior to the occurrence of a default
with respect to the Trust Securities, and after the curing
of all defaults that may have occurred, undertakes to perform
only the duties that are specifically set forth in the amended
and restated declaration of trust. If such a default occurs and
the institutional trustee has actual
37
knowledge of it, the institutional trustee will exercise the
rights and powers vested in it by the amended and restated
declaration of trust and will use the same degree of care and
skill in the exercise of such rights and powers as a prudent
individual would exercise in the conduct of his or her own
affairs. Subject to those provisions, the institutional trustee
is under no obligation to exercise any of the rights or powers
vested in it by the amended and restated declaration of trust at
the request of any holder of the Certificates, unless offered
reasonable security and indemnity by the holder against the
costs, expenses and liabilities which the institutional trustee
might incur thereby. Notwithstanding the foregoing, the holders
of the Certificates will not be required to offer the indemnity
in the event the holders, by exercising their voting rights,
direct the institutional trustee to take any action following an
acceleration event.
Paying
Agent and CUSIP
In the event that the Certificates do not remain in book-entry
only form, the institutional trustee will act as paying agent
for the Certificates and may designate an additional or
substitute paying agent at any time. In addition, registration
of transfers of the Certificates will be effected without charge
by or on behalf of the Trust, but upon payment, with the giving
of such indemnity as the Trust or Citigroup Funding may require,
in respect of any tax or other government charges which may be
imposed in relation to it.
The CUSIP number for the Certificates
is .
Calculation
Agent
The calculation agent for the Certificates will be Citigroup
Global Markets. All determinations made by the calculation agent
will be at the sole discretion of the calculation agent and
will, in the absence of manifest error, be conclusive for all
purposes and binding on the Trust, Citigroup Funding, Citigroup
Inc. and the holders of the Certificates. Because the
calculation agent is an affiliate of the Trust, Citigroup
Funding and Citigroup Inc., potential conflicts of interest may
exist between the calculation agent and the holders of the
Certificates, including with respect to certain determinations
and judgments that the calculation agent must make in
determining amounts due to the holders of the Certificates.
Citigroup Global Markets is obligated to carry out its duties
and functions as calculation agent in good faith and using its
reasonable judgment.
Governing
Law
The amended and restated declaration of trust and the
Certificates will be governed by, and construed in accordance
with, the internal laws of the State of Delaware.
38
DESCRIPTION
OF THE EQUITY INDEX PARTICIPATION SECURITIES
Citigroup Funding is also by this offering document offering its
Equity Index Participation Securities Linked to the S&P
500
®
Index
due ,
2013 (the Securities). The description in this
offering document of the particular terms of the Securities
supplements, and to the extent inconsistent therewith replaces,
the descriptions of the general terms and provisions of the
registered securities set forth in the accompanying prospectus
supplement and base prospectus relating to the Securities.
General
The Securities are a series of debt securities issued by
Citigroup Funding under the senior debt indenture described in
the accompanying prospectus supplement and base prospectus
relating to the Securities. Citigroup Funding will
issue
Securities, of which will be issued in connection with the
Trusts issuance of its common securities at an aggregate
offering price of $ .
The Securities will mature
on ,
2013, the maturity date of the Certificates. Any payments due
under the Securities are fully and unconditionally guaranteed by
Citigroup Inc. The Securities will constitute part of the senior
debt of Citigroup Funding and will rank equally with all other
unsecured and unsubordinated debt of Citigroup Funding. As a
result of the Citigroup Inc. guarantee, any payments due under
the Securities will rank equally with all other unsecured and
unsubordinated debt of Citigroup Inc. The return of your initial
investment in the Securities at maturity is not guaranteed. The
Securities will be issued only in fully registered form and in
denominations of $10 per Security and integral multiples
thereof. The Trust will purchase all of the Securities from
Citigroup Funding on the date on which the Certificates are
issued, at a price of $ per
Security.
The Securities pay an amount at maturity that will depend on the
percentage increase or decrease in the Ending Value of the
S&P
500
®
Index from its Starting Value. If the Ending Value of the
S&P
500
®
Index is less than its Starting Value, the payment at maturity
will be directly linked to the percentage decrease in the Ending
Value of the index from its Starting Value, in which event the
Securities will pay less than the initial issue price of
$ . Thus, if you choose to
exercise your exchange right, dispose of the Warrants and hold
only the Securities, you will lose the benefit of principal
protection at maturity. If the Ending Value of the
S&P 500
®
Index is greater than its Starting Value, the payment at
maturity will be greater than the initial issue price. In this
case, the appreciation on an investment in the Securities is
expected to be approximately 80% to 90% (to be determined on the
Pricing Date) of the appreciation in the value of the S&P
500
®
Index because of the Participation Rate, which is expected to be
80% to 90% (to be determined on the Pricing Date) of the Index
Return.
You should refer to the accompanying prospectus supplement and
base prospectus relating to the Securities for a detailed
summary of additional provisions of the Securities and of the
senior debt indenture under which the Securities will be issued.
Periodic
Payments
Citigroup Funding will not make any periodic payments of
interest or any other periodic payments on the Securities. You
will not be entitled to receive dividend payments or other
distributions, if any, made on the stocks included in the
S&P
500
®
Index.
Payment
at Maturity of the Securities
The Securities will mature
on ,
2013, the maturity date of the Certificates, subject to
acceleration to the accelerated maturity date upon the
occurrence of an acceleration event. See
Acceleration of Maturity Date and Events of
Default below. At maturity, each Security will pay a
Security Payment equal to the sum of $10 and the Security Return
Amount, which may be positive, zero or negative.
Security
Return Amount
The Security Return Amount will be based on the Index Return of
the S&P
500
®
Index. The Index Return, which is presented in this offering
document as a percentage, will equal the following fraction:
Ending Value Starting Value
Starting Value
39
The Security Return Amount depends on whether the Index Return
is positive, zero or negative.
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If the Index Return is positive
, the Security Return
Amount will equal the product of
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$10 × Index Return × Participation Rate
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The Participation Rate is expected to be approximately 80% to
90% (to be determined on the Pricing Date) of the Index Return.
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If the Index Return is zero
, (
i.e.
, if the Ending
Value equals the Starting Value), the Security Return Amount
will equal zero, and the payment at maturity on each Security
will be $10.
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If the Index Return is negative
, the Security Return
Amount will equal the product of
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$10 × Index Return
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In this case, the Security Return Amount will be negative, and
the payment at maturity for each Security will be less than $10
and could be zero. Because your participation in the
depreciation of the S&P
500
®
Index is not limited by the Participation Rate, if the Ending
Value is less than the Starting Value, you will participate
fully in the depreciation of the S&P
500
®
Index.
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The Starting Value will be the closing value of the
S&P
500
®
Index on the Pricing Date.
The Ending Value will be the closing value of the
S&P
500
®
Index on the Valuation Date.
The Pricing Date means the date on which the
Certificates are priced for initial sale to the public.
The Valuation Date will be the third Index Business
Day before the maturity date of the Certificates.
If the closing value of the S&P
500
®
Index is not available on any Index Business Day because of a
Market Disruption Event or otherwise, the value of the S&P
500
®
Index for that Index Business Day, unless deferred by the
calculation agent as described below, will be the arithmetic
mean, as determined by the calculation agent, of the value of
the S&P
500
®
Index obtained from as many dealers in equity securities (which
may include Citigroup Global Markets or any of our other
affiliates), but not exceeding three such dealers, as will make
such value available to the calculation agent. The determination
of the value of the S&P
500
®
Index by the calculation agent in the event of a Market
Disruption Event may be deferred by the calculation agent for up
to five consecutive Index Business Days on which a Market
Disruption Event is occurring, but not past the Index Business
Day prior to maturity. You should refer to Description of
the Certificates Supplemental Distribution
Amount in this offering document for the definition of
Index Business Day and Market Disruption
Event. You should also refer to Description of the
Certificates Discontinuance of the S&P
500
®
Index and Alteration of Method of
Calculation in this offering document for more information
on the determination of the value of the S&P
500
®
Index when the S&P
500
®
Index is discontinued or the method of calculation is altered.
Security
Payment Hypothetical Examples
The Index Return and, therefore, the Security Return Amount, is
dependent on the Ending Value of the
S&P 500
®
Index. Because the value of the S&P
500
®
Index may be subject to significant variations over the term of
the Securities, it is not possible to present a chart or table
illustrating a complete range of possible payments at maturity
of the Securities. The examples of hypothetical Security
Payments set forth below are intended to illustrate the effect
of different Ending Values of the S&P
500
®
Index on the amount payable on the Securities at maturity. All
of the hypothetical examples assume the following:
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Investment in the Securities: $8.30;
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Starting Value of the S&P
500
®
Index: 1,280.0;
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Participation Rate: 85%; and
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Term of the Securities: 5 years.
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|
|
|
|
|
|
|
|
|
|
Ending Value
|
|
|
|
|
|
Security
|
|
|
|
|
|
Total
|
|
|
Annualized
|
of the
S&P 500
®
|
|
|
|
|
|
Return
|
|
|
Security
|
|
|
Return on the
|
|
|
Return on the
|
Index
|
|
|
Index Return
|
|
|
Amount
(1)
|
|
|
Payment
(2)
|
|
|
Securities
|
|
|
Securities
(3)
|
|
384.0
|
|
|
|
|
−70.00
|
%
|
|
|
−$
|
7.00
|
|
|
|
$
|
3.00
|
|
|
|
|
−63.86
|
%
|
|
|
|
−18.42
|
%
|
|
512.0
|
|
|
|
|
−60.00
|
|
|
|
|
−6.00
|
|
|
|
|
4.00
|
|
|
|
|
−51.81
|
|
|
|
|
−13.58
|
|
|
640.0
|
|
|
|
|
−50.00
|
|
|
|
|
−5.00
|
|
|
|
|
5.00
|
|
|
|
|
−39.76
|
|
|
|
|
−9.64
|
|
|
768.0
|
|
|
|
|
−40.00
|
|
|
|
|
−4.00
|
|
|
|
|
6.00
|
|
|
|
|
−27.71
|
|
|
|
|
−6.28
|
|
|
896.0
|
|
|
|
|
−30.00
|
|
|
|
|
−3.00
|
|
|
|
|
7.00
|
|
|
|
|
−15.66
|
|
|
|
|
−3.35
|
|
|
960.0
|
|
|
|
|
−25.00
|
|
|
|
|
−2.50
|
|
|
|
|
7.50
|
|
|
|
|
−9.64
|
|
|
|
|
−2.01
|
|
|
1,024.0
|
|
|
|
|
−20.00
|
|
|
|
|
−2.00
|
|
|
|
|
8.00
|
|
|
|
|
−3.61
|
|
|
|
|
−0.73
|
|
|
1,088.0
|
|
|
|
|
−15.00
|
|
|
|
|
−1.50
|
|
|
|
|
8.50
|
|
|
|
|
2.41
|
|
|
|
|
0.48
|
|
|
1,152.0
|
|
|
|
|
−10.00
|
|
|
|
|
−1.00
|
|
|
|
|
9.00
|
|
|
|
|
8.43
|
|
|
|
|
1.63
|
|
|
1,216.0
|
|
|
|
|
−5.00
|
|
|
|
|
−0.50
|
|
|
|
|
9.50
|
|
|
|
|
14.46
|
|
|
|
|
2.74
|
|
|
1,248.0
|
|
|
|
|
−2.50
|
|
|
|
|
−0.25
|
|
|
|
|
9.75
|
|
|
|
|
17.47
|
|
|
|
|
3.27
|
|
|
1,280.0
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
|
|
10.00
|
|
|
|
|
20.48
|
|
|
|
|
3.80
|
|
|
1,344.0
|
|
|
|
|
5.00
|
|
|
|
|
0.43
|
|
|
|
|
10.43
|
|
|
|
|
25.60
|
|
|
|
|
4.66
|
|
|
1,408.0
|
|
|
|
|
10.00
|
|
|
|
|
0.85
|
|
|
|
|
10.85
|
|
|
|
|
30.72
|
|
|
|
|
5.50
|
|
|
1,472.0
|
|
|
|
|
15.00
|
|
|
|
|
1.28
|
|
|
|
|
11.28
|
|
|
|
|
35.84
|
|
|
|
|
6.32
|
|
|
1,536.0
|
|
|
|
|
20.00
|
|
|
|
|
1.70
|
|
|
|
|
11.70
|
|
|
|
|
40.96
|
|
|
|
|
7.11
|
|
|
1,600.0
|
|
|
|
|
25.00
|
|
|
|
|
2.13
|
|
|
|
|
12.13
|
|
|
|
|
46.08
|
|
|
|
|
7.87
|
|
|
1,664.0
|
|
|
|
|
30.00
|
|
|
|
|
2.55
|
|
|
|
|
12.55
|
|
|
|
|
51.20
|
|
|
|
|
8.62
|
|
|
1,792.0
|
|
|
|
|
40.00
|
|
|
|
|
3.40
|
|
|
|
|
13.40
|
|
|
|
|
61.45
|
|
|
|
|
10.05
|
|
|
1,920.0
|
|
|
|
|
50.00
|
|
|
|
|
4.25
|
|
|
|
|
14.25
|
|
|
|
|
71.69
|
|
|
|
|
11.42
|
|
|
2,048.0
|
|
|
|
|
60.00
|
|
|
|
|
5.10
|
|
|
|
|
15.10
|
|
|
|
|
81.93
|
|
|
|
|
12.71
|
|
|
2,176.0
|
|
|
|
|
70.00
|
|
|
|
|
5.95
|
|
|
|
|
15.95
|
|
|
|
|
92.17
|
|
|
|
|
13.96
|
|
|
2,304.0
|
|
|
|
|
80.00
|
|
|
|
|
6.80
|
|
|
|
|
16.80
|
|
|
|
|
102.41
|
|
|
|
|
15.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
If the Ending Value is greater than the Starting Value, the
Security Return Amount = $10 × Index Return ×
Participation Rate.
|
|
|
|
If the Ending Value is less than or equal to the Starting Value,
the Security Return Amount = $10 × Index Return.
|
|
|
|
(2)
|
|
Security Payment = $10.00 + Security Return Amount.
|
|
(3)
|
|
Compounded annually. The examples above are for purposes of
illustration only. The actual Security Payment will depend on
the actual Security Return Amount, which, in turn, will depend
on the actual Starting Value, Ending Value and Participation
Rate.
|
Redemption
at the Option of the Holder; Defeasance
The Securities are not subject to redemption at the option of
any holder prior to maturity and are not subject to the
defeasance provisions described in the accompanying base
prospectus under Description of Debt
Securities Defeasance.
Acceleration
of Maturity Date and Events of Default
If at any time an acceleration event occurs as described under
Description of the Certificates Acceleration
of Maturity Date; Enforcement of Right, the Security
Payment with respect to each Security will become immediately
due and payable, and Citigroup Funding will pay the accelerated
Security Payment to the holders of the Securities as soon as
practicable following the occurrence of the acceleration event
(whether or not the Securities are declared due and payable). In
case an Event of Default (as defined in the accompanying base
prospectus) other than an acceleration event described under
Description of the Certificates Acceleration
of Maturity Date; Enforcement of Right with respect to any
Security shall have occurred and be continuing, the indenture
trustee and the holders of the Securities may declare the
Securities due and payable as described in the accompanying base
prospectus. The amount due and payable upon any acceleration of
the Securities will be determined by the calculation agent and
will equal, for each Security, the payment at maturity of the
Securities, calculated as though the maturity of the Securities
were the date of the occurrence of the acceleration event. See
41
Payment at Maturity of the Securities
above. If a bankruptcy proceeding is commenced in respect of
Citigroup Funding or Citigroup Inc., the beneficial owner of a
Security will not be permitted to make a claim for unmatured
interest and, therefore, the claim of the beneficial owner of a
Security against the entity that becomes subject to a bankruptcy
proceeding will be capped at the payment at maturity of the
Securities, calculated as though the maturity date of the
Securities were the date of the commencement of the proceeding.
In case of default in payment at maturity of the Securities, the
Securities will bear interest, payable upon demand of the
beneficial owners of the Securities in accordance with the terms
of the Securities, from and after the maturity date through the
date when payment of the unpaid amount has been made or duly
provided for, at the rate of % per
annum on the unpaid amount.
Paying
Agent, Trustee, Calculation Agent and CUSIP
Citibank, N.A. will serve as paying agent and registrar for the
Securities and will also hold the global security representing
the Securities as custodian for DTC. The Bank of New York Mellon
(formerly known as The Bank of New York), as successor trustee
under an indenture dated as of June 1, 2005, will serve as
indenture trustee for the Securities. Citigroup Global Markets
will serve as calculation agent. Please refer to
Description of the Certificates Calculation
Agent for more information on the calculation agent.
The CUSIP number for the Securities
is .
DESCRIPTION
OF THE EQUITY INDEX WARRANTS
Citigroup Funding is also by this offering document offering its
Equity Index Warrants Linked to the
S&P 500
®
Index
due ,
2013 (the Warrants). The description in this
offering document of the particular terms of the Warrants
supplements, and to the extent inconsistent therewith replaces,
the descriptions of the general terms and provisions of the
registered securities set forth in the accompanying prospectus
supplement and base prospectus relating to the Warrants.
General
The Warrants are a series of index warrants issued by Citigroup
Funding under a warrant agreement described in the accompanying
prospectus supplement and base prospectus relating to the
Warrants. Citigroup Funding will
issue
Warrants, of which will
be issued in connection with the Trusts issuance of its
common securities, at an aggregate offering price of
$ . The Warrants will
be automatically exercised
on ,
2013, the maturity date of the Certificates, and are not
exercisable prior to that time. Any payments due on the Warrants
are fully and unconditionally guaranteed by Citigroup Inc. The
Warrants will rank equally with all other unsecured and
unsubordinated debt of Citigroup Funding. As a result of the
Citigroup Inc. guarantee, any payments due under the Warrants
will rank equally with all other unsecured and unsubordinated
debt of Citigroup Inc. Each Warrant will have a notional amount
of $10 and the Trust will purchase all of the Warrants from
Citigroup Funding on the date on which the Certificates are
issued, at a price of $ per
Warrant.
Upon exercise, the Warrants pay an amount that will depend on
the percentage increase or decrease in the Ending Value of the
S&P
500
®
Index from its Starting Value. If the Ending Value of the
S&P
500
®
Index is greater than or equal to its Starting Value, the
Warrants will pay zero. If the Ending Value of the S&P
500
®
Index is less than its Starting Value, the payment on the
Warrants will be inversely linked to the percentage decrease in
the Ending Value of the index from its Starting Value. As a
result, if you choose to exercise your exchange right, dispose
of the Securities and hold only the Warrants, you may receive
less than the principal amount of your investment at maturity.
You should refer to the accompanying prospectus supplement and
base prospectus relating to the Warrants for a detailed summary
of additional provisions of the Warrants and of the warrant
agreement under which the Warrants will be issued.
42
Periodic
Payments
Citigroup Funding will not make any periodic payments of
interest or any other payments on the Warrants until the
Warrants are automatically exercised at maturity. You will not
be entitled to receive dividend payments or other distributions,
if any, made on the stocks included in the S&P
500
®
Index.
Payment
Upon Exercise of the Warrants
The Warrants will be automatically exercised
on ,
2013, and are not exercisable prior to that date, subject to
acceleration to an earlier exercise date upon the occurrence of
an acceleration event. See Acceleration of
Exercise Date below. Upon exercise, each Warrant will pay
a Warrant Payment equal to the product of (a) $10 and
(b) the Warrant Index Return, provided that the Warrant
Payment will not be less than zero.
The Warrant Index Return, which is presented in this offering
document as a percentage, will equal the following fraction:
Starting Value Ending Value
Starting Value
The Starting Value will be the closing value of the
S&P
500
®
Index on the Pricing Date.
The Ending Value will be the closing value of the
S&P
500
®
Index on the Valuation Date.
The Pricing Date means the date on which the
Certificates are priced for initial sale to the public.
The Valuation Date will be the third Index Business
Day before the maturity date of the Certificates.
If the closing value of the S&P
500
®
Index is not available on any Index Business Day because of a
Market Disruption Event or otherwise, the value of the S&P
500
®
Index for that Index Business Day, unless deferred by the
calculation agent as described below, will be the arithmetic
mean, as determined by the calculation agent, of the value of
the S&P
500
®
Index obtained from as many dealers in equity securities (which
may include Citigroup Global Markets or any of our other
affiliates), but not exceeding three such dealers, as will make
such value available to the calculation agent. The determination
of the value of the S&P
500
®
Index by the calculation agent in the event of a Market
Disruption Event may be deferred by the calculation agent for up
to five consecutive Index Business Days on which a Market
Disruption Event is occurring, but not past the Index Business
Day prior to maturity. You should refer to Description of
the Certificates Supplemental Distribution
Amount in this offering document for the definition of
Index Business Day and Market Disruption
Event. You should also refer to Description of the
Certificates Discontinuance of the S&P
500
®
Index and Alteration of Method of
Calculation in this offering document for more information
on the determination of the value of the S&P
500
®
Index when the index is discontinued or the method of
calculation is altered.
Warrant
Payment Hypothetical Examples
The Warrant Index Return and, therefore, the Warrant Payment, is
dependent on the Ending Value of the
S&P 500
®
Index. Because the value of the S&P
500
®
Index may be subject to significant variations over the term of
the Warrants, it is not possible to present a chart or table
illustrating a complete range of possible payments upon exercise
of the Warrants. The examples of hypothetical Warrant Payments
set forth below are intended to illustrate the effect of
different Ending Values of the S&P
500
®
Index payable on the Warrants upon exercise. All of the
hypothetical examples assume the following:
|
|
|
|
|
Investment in the Warrants: $1.70;
|
|
|
|
Starting Value of the S&P
500
®
Index: 1,280.0;
|
|
|
|
Term of the Warrants: 5 years; and
|
|
|
|
The Warrant Payment cannot equal less than zero.
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Value
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
Annualized
|
of
the S&P 500
®
|
|
|
|
|
|
Warrant
|
|
|
Warrant
|
|
|
Return on
|
|
|
Return on
|
Index
|
|
|
Index Return
|
|
|
Index Return
|
|
|
Payment
(1)
|
|
|
the Warrants
|
|
|
the
Warrants
(2)
|
|
384.0
|
|
|
|
|
−70.00
|
%
|
|
|
|
70.00
|
%
|
|
|
|
$7.00
|
|
|
|
|
311.76
|
%
|
|
|
|
32.72
|
%
|
|
512.0
|
|
|
|
|
−60.00
|
|
|
|
|
60.00
|
|
|
|
|
6.00
|
|
|
|
|
252.94
|
|
|
|
|
28.69
|
|
|
640.0
|
|
|
|
|
−50.00
|
|
|
|
|
50.00
|
|
|
|
|
5.00
|
|
|
|
|
194.12
|
|
|
|
|
24.08
|
|
|
768.0
|
|
|
|
|
−40.00
|
|
|
|
|
40.00
|
|
|
|
|
4.00
|
|
|
|
|
135.29
|
|
|
|
|
18.66
|
|
|
896.0
|
|
|
|
|
−30.00
|
|
|
|
|
30.00
|
|
|
|
|
3.00
|
|
|
|
|
76.47
|
|
|
|
|
12.03
|
|
|
960.0
|
|
|
|
|
−25.00
|
|
|
|
|
25.00
|
|
|
|
|
2.50
|
|
|
|
|
47.06
|
|
|
|
|
8.02
|
|
|
1,024.0
|
|
|
|
|
−20.00
|
|
|
|
|
20.00
|
|
|
|
|
2.00
|
|
|
|
|
17.65
|
|
|
|
|
3.30
|
|
|
1,088.0
|
|
|
|
|
−15.00
|
|
|
|
|
15.00
|
|
|
|
|
1.50
|
|
|
|
|
−11.76
|
|
|
|
|
−2.47
|
|
|
1,152.0
|
|
|
|
|
−10.00
|
|
|
|
|
10.00
|
|
|
|
|
1.00
|
|
|
|
|
−41.18
|
|
|
|
|
−10.07
|
|
|
1,216.0
|
|
|
|
|
−5.00
|
|
|
|
|
5.00
|
|
|
|
|
0.50
|
|
|
|
|
−70.59
|
|
|
|
|
−21.71
|
|
|
1,248.0
|
|
|
|
|
−2.50
|
|
|
|
|
2.50
|
|
|
|
|
0.25
|
|
|
|
|
−85.29
|
|
|
|
|
−31.84
|
|
|
1,280.0
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,344.0
|
|
|
|
|
5.00
|
|
|
|
|
−5.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,408.0
|
|
|
|
|
10.00
|
|
|
|
|
−10.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,472.0
|
|
|
|
|
15.00
|
|
|
|
|
−15.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,536.0
|
|
|
|
|
20.00
|
|
|
|
|
−20.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,600.0
|
|
|
|
|
25.00
|
|
|
|
|
−25.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,664.0
|
|
|
|
|
30.00
|
|
|
|
|
−30.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,792.0
|
|
|
|
|
40.00
|
|
|
|
|
−40.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
1,920.0
|
|
|
|
|
50.00
|
|
|
|
|
−50.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
2,048.0
|
|
|
|
|
60.00
|
|
|
|
|
−60.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
2,176.0
|
|
|
|
|
70.00
|
|
|
|
|
−70.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
2,304.0
|
|
|
|
|
80.00
|
|
|
|
|
−80.00
|
|
|
|
|
0.00
|
|
|
|
|
−100.00
|
|
|
|
|
−100.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
(1)
|
|
Warrant Payment = $10.00 × Warrant Index Return, provided
that the Warrant Payment will not be less than zero.
|
|
(2)
|
|
Compounded annually.
|
The examples above are for purposes of illustration only. The
actual Warrant Payment will depend on the actual Starting Value
and Ending Value.
Acceleration
of Exercise Date and Events of Default
If at any time an acceleration event occurs as described under
Description of the Certificates Acceleration
of Maturity Date; Enforcement of Right, the Warrants will
be automatically exercised, and Citigroup Funding will pay the
accelerated Warrant Payment to the holders of the Warrants as
soon as practicable following the occurrence of the acceleration
event. The amount due and payable upon any acceleration of the
Warrants will be determined by the calculation agent and will
equal, for each Warrant, the payment upon exercise of the
Warrants, calculated as though the exercise date of the Warrants
were the date of the occurrence of the acceleration event. See
Payment Upon Exercise of the Warrants
above.
In case of default in payment upon exercise of the Warrants, the
Warrants will bear interest, payable upon demand of the
beneficial owners of the Warrants in accordance with the terms
of the Warrants, from and after the exercise date through the
date when payment of the unpaid amount has been made or duly
provided for, at the rate of % per
annum on the unpaid amount.
Warrant
Agent, Paying Agent, Trustee, Calculation Agent and
CUSIP
U.S. Bank National Association will serve as paying agent
and registrar for the Warrants and will also hold the global
security representing the Warrants as custodian for DTC.
U.S. Bank National Association, as warrant agent under a
warrant agreement dated as of
[ ],
will serve as warrant agent for the Warrants. Citigroup Global
Markets will serve as calculation agent. Please refer to
Description of the Certificates Calculation
Agent for more information on the calculation agent.
44
The CUSIP number for the Warrants
is .
Covenants
Limitations on Liens.
The warrant agreement
provides that Citigroup Inc. will not, and will not permit any
subsidiary to, incur, issue, assume or guarantee any
indebtedness for borrowed money if such indebtedness is secured
by a pledge of, lien on, or security interest in any shares of
Voting Stock (as defined below) of any Significant Subsidiary
(as defined below), whether such Voting Stock is owned or later
acquired, without effectively providing that the Warrants and,
at Citigroup Inc.s option, any other senior indebtedness
ranking equally and ratably with the Warrants, shall be 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,
including any renewals or extensions of such secured
indebtedness (
Warrant Agreement
,
Section 8.04
).
Significant Subsidiary means any Subsidiary (as
defined below), including its Subsidiaries:
|
|
|
|
|
that has investments of and advances from Citigroup Inc. and its
other subsidiaries exceeding 10% of the total consolidated
assets of Citigroup Inc. and such other subsidiaries as of the
end of the most recently completed fiscal year;
|
|
|
|
of which Citigroup Inc.s and its other subsidiaries
proportionate share of total assets (after intercompany
elimination) exceeds 10% of the total consolidated assets of
Citigroup Inc. and such other subsidiaries as of the end of the
most recently completed fiscal year; or
|
|
|
|
of which Citigroup Inc.s and its other subsidiaries
equity in the income from continuing operations exceeds 10% of
such consolidated income of Citigroup Inc. and such other
subsidiaries for the most recently completed fiscal year.
|
Subsidiary means any corporation of which securities
entitled to elect at least a majority of the corporations
directors shall at the time be owned, directly or indirectly, by
Citigroup Inc.,
and/or
one
or more Subsidiaries, except securities entitled to vote for
directors only upon the happening of a contingency.
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 (
Warrant
Agreement
,
Sections 1.01
and
8.04
).
Limitations on Mergers and Sales of
Assets.
The warrant agreement provides that
neither Citigroup Funding nor Citigroup Inc. will merge or
consolidate with another corporation or sell other than for cash
or lease all or substantially all their assets to another
corporation, or purchase all or substantially all the assets of
another corporation unless:
|
|
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|
|
the successor corporation, if other than Citigroup Funding or
Citigroup Inc., as applicable, expressly assumes by supplemental
warrant agreement the obligations of Citigroup Funding or
Citigroup Inc., as applicable, under the warrant
agreement; and
|
|
|
|
immediately after the transaction, there would not be any
default in the performance of any covenant or condition of the
warrant agreement (
Warrant Agreement
,
Sections 5.01
and
8.05
).
|
Other than the restrictions described above, the warrant
agreement does not contain any covenants or provisions that
would protect holders of the Warrants in the event of a highly
leveraged transaction.
Modification
of the Warrant Agreement
The warrant agreement modifies the modification provisions of
the form of index warrant agreement described in the
accompanying base prospectus as follows: Citigroup Inc.,
Citigroup Funding and the warrant agent may, with the consent of
the holders of not less than a majority of the then outstanding
Warrants, increase the amount to be paid to the holder upon
exercise of a Warrant.
45
DESCRIPTION
OF THE CERTIFICATE GUARANTEE
Set forth below is a summary of information concerning the full
and unconditional guarantee, which we refer to as the
Certificate Guarantee, that will be executed and delivered by
each of Citigroup Funding and Citigroup Inc. for the benefit of
the holders of the Certificates. The Certificate Guarantee will
be qualified as an indenture under the Trust Indenture Act.
U.S. Bank National Association will act as guarantee
trustee under the Certificate Guarantee. The terms of the
Certificate Guarantee will be those set forth in the Certificate
Guarantee and those made part of the Certificate Guarantee by
the Trust Indenture Act. The summary does not purport to be
complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the form of
Certificate Guarantee, which is filed as an exhibit to the
registration statement of which this offering document forms a
part, and the Trust Indenture Act. The Certificate
Guarantee will be held by the guarantee trustee for the benefit
of the holders of the Certificates.
You should refer to the accompanying prospectus supplements and
base prospectus for a discussion of the Citigroup Inc. guarantee
relating to each of the Securities and the Warrants.
General
Under the Certificate Guarantee, Citigroup Funding will fully
and unconditionally agree to pay in full to the holders of the
Certificates, except to the extent paid by the Trust, as and
when due, regardless of any defense, right of set off or
counterclaim which the Trust may have or assert, the following
payments:
|
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|
|
any maturity payment that is required to be made in respect of
the Certificates, to the extent the Trust has funds legally
available for this payment,
|
|
|
|
any accelerated maturity payment that is required to be made in
respect of the Certificates, to the extent the Trust has funds
legally available for this payment, and
|
|
|
|
any other remaining assets of the Trust upon liquidation of the
Trust.
|
Citigroup Fundings obligation to make a guarantee payment
may be satisfied by direct payment of the required amounts by
Citigroup Funding to the holders of the Certificates or by
causing the Trust to pay such amounts to such holders.
In addition, under the Certificate Guarantee, Citigroup Inc.
will fully and unconditionally guarantee Citigroup
Fundings guarantee obligations to the same extent as
Citigroup Funding guarantees the Trusts payment
obligations under the Certificates. If for any reason Citigroup
Funding does not make any required guarantee payment when due,
either by direct payment of the required amounts to the holders
of the Certificates or by causing the Trust to pay such amounts
to such holders, Citigroup Inc. will cause such guarantee
payment to be made at the same address at which Citigroup
Funding is obligated to make such guarantee payment. The holders
of the Certificates will be entitled to payment under the
Certificate Guarantee without taking any action whatsoever
against the Trust or Citigroup Funding, as the case may be. Each
of Citigroup Fundings and Citigroup Inc.s
obligations under its guarantee are unconditional, irrespective
of any (i) extension, amendment, modification or renewal of
any required payment; (ii) any waiver of any event of
default, extension of time or failure to enforce any required
payment; or (iii) any extension, moratorium or other relief
granted to the Trust or Citigroup Funding, as the case may be,
pursuant to any applicable law or statute.
The Certificate Guarantee will be a guarantee with respect to
the Certificates from the time of issuance of the Certificates
but will not apply to any maturity payment or accelerated
maturity payment, or to payments upon the dissolution,
winding-up
or termination of the Trust, except to the extent the Trust has
funds legally available for these payments. If Citigroup Funding
or Citigroup Inc. does not pay the aggregate Security Payment or
Warrant Payment or the aggregate accelerated Security Payment or
Warrant Payment, as the case may be, to the Trust upon maturity
or exercise of the Securities or Warrants, as applicable,
including maturity or exercise as a result of the occurrence of
an acceleration event, the Trust will not have funds available
to pay the maturity payment or accelerated maturity payment to
holders of the Certificates. The Certificate Guarantee, when
taken together with Citigroup Fundings obligations under
the Securities and the Warrants, Citigroup Inc.s guarantee
of each of the Securities and the Warrants, the related
indenture, the related warrant agreement, the amended and
restated
46
declaration of trust, and Citigroup Fundings and Citigroup
Inc.s obligations to pay all fees, costs, expenses, debts
and liabilities of the Trust, other than with respect to
Trust Securities, will provide a full and unconditional
guarantee by each of Citigroup Funding and Citigroup Inc. of the
Trusts obligations under the Certificates.
Modifications
of the Certificate Guarantee; Assignment
Except with respect to any changes that do not adversely affect
the rights of holders of the Certificates, in which case no vote
will be required, the Certificate Guarantee may be amended only
with the prior approval of the holders of a majority of the
outstanding Certificates. All guarantees and agreements
contained in the Certificate Guarantee will bind the successors,
assignees, receivers, trustees and representatives of Citigroup
Funding and Citigroup Inc. and shall inure to the benefit of the
holders of the Certificates then outstanding.
Certificate
Guarantee Enforcement Events
An enforcement event under the Certificate Guarantee will occur
upon the failure of Citigroup Funding or Citigroup Inc., as
applicable, to perform any of their respective payment or other
obligations thereunder. The holders of a majority of the
Certificates have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
guarantee trustee in respect of the Certificate Guarantee or to
direct the exercise of any trust or power conferred upon the
guarantee trustee under the Certificate Guarantee. If the
guarantee trustee fails to enforce the guarantee trustees
rights under the Certificate Guarantee, any holder of the
Certificates may directly institute a legal proceeding against
Citigroup Funding or Citigroup Inc., as applicable, to enforce
the guarantee trustees rights under the Certificate
Guarantee, without first instituting a legal proceeding against
the Trust, the guarantee trustee or any other person or entity.
A holder of the Certificates may also directly institute a legal
proceeding against Citigroup Funding or Citigroup Inc., as
applicable, to enforce such holders right to receive
payment under the Certificate Guarantee without first directing
the guarantee trustee to enforce the terms of the Certificate
Guarantee or instituting a legal proceeding against the Trust or
any other person or entity.
Citigroup Funding and Citigroup Inc. will be required to provide
annually to the guarantee trustee a statement as to the
performance by Citigroup Funding and Citigroup Inc. of certain
of their obligations under the Certificate Guarantee and as to
any default in such performance.
Information
Concerning the Guarantee Trustee
The guarantee trustee, prior to the occurrence of a default with
respect to the Certificate Guarantee and after the curing of all
defaults that may have occurred, undertakes to perform only the
duties that are specifically set forth in the Certificate
Guarantee. If any default occurs with respect to the Certificate
Guarantee that has not been cured or waived and the guarantee
trustee has actual knowledge of it, the guarantee trustee will
exercise its rights and powers under the Certificate Guarantee,
and use the same degree of care and skill in the exercise of
such rights and powers as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such
provision, the guarantee trustee is under no obligation to
exercise any of the powers vested in it by the Certificate
Guarantee at the request of any holder of the Certificates
unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
Termination
of the Certificate Guarantee
The Certificate Guarantee will terminate as to the Certificates
upon full payment to the holders of the Certificates of
|
|
|
|
|
the maturity payment,
|
|
|
|
the accelerated maturity payment, or
|
|
|
|
the amounts payable in accordance with the amended and restated
declaration of trust upon liquidation of the Trust.
|
47
The Certificate Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of
the Certificates must restore payment of any sum paid under the
Certificates or the Certificate Guarantee.
Status of
the Certificate Guarantee
The Certificate Guarantee will constitute a guarantee of payment
and not of collection. The guaranteed party may institute a
legal proceeding directly against either Citigroup Funding or
Citigroup Inc. to enforce its rights under the Certificate
Guarantee without first instituting a legal proceeding against
any other person or entity.
Governing
Law
The Certificate Guarantee will be governed by, and construed in
accordance with, the internal laws of the State of New York.
DESCRIPTION
OF THE S&P
500
®
INDEX
General
Unless otherwise stated, we have derived all information
regarding the S&P
500
®
Index provided in this pricing supplement, including its
composition, method of calculation and changes in components,
from Standard & Poors (S&P),
publicly available sources and other sources we believe to be
reliable. Such information reflects the policies of, and is
subject to change by, S&P. S&P is under no obligation
to continue to publish, and may discontinue or suspend the
publication of, the S&P
500
®
Index at any time. None of Citigroup Inc., Citigroup Funding,
Citigroup Global Markets or the trustee assumes any
responsibility for the accuracy or completeness of any
information relating to the S&P
500
®
Index.
The S&P
500
®
Index is published by S&P and is intended to provide a
performance benchmark for the U.S. equity markets. S&P
chooses companies for inclusion with an aim of achieving a
distribution by broad industry groupings. The calculation of the
value is based on the relative aggregate market value of the
common stocks of 500 companies at a particular time
compared to the aggregate average market value of the common
stocks of 500 similar companies during the base period of
the years 1941 through 1943. The weighting and composition of
the Index components are updated periodically so that the
S&P
500
®
Index reflects the performance of the U.S. equity markets.
As of January 25, 2011, the aggregate market value of the
500 companies included in the S&P
500
®
Index represented approximately 75% of the U.S. equities
market. S&P chooses companies for inclusion in the S&P
500
®
Index with the aim of achieving a distribution by broad industry
groupings that approximates the distribution of these groupings
in the common stock composition of the NYSE, which S&P uses
as an assumed model for the composition of the total market.
Relevant criteria employed by S&P include the viability of
the particular company, the extent to which that company
represents the industry group to which it is assigned, the
extent to which the market price of that companys common
stock is generally responsive to changes in the affairs of the
respective industry and the market value and trading activity of
the common stock of that company.
As of January 25, 2011, the 500 companies included in
the S&P
500
®
Index were divided into 10 Global Industry Classification
Sectors. The Global Industry Classification Sectors included
(with the percentage of companies currently included in such
sectors indicated in parentheses): Consumer Discretionary
(10.49%), Consumer Staples (10.43%), Energy (12.19%), Financials
(16.09%), Health Care (10.83%), Industrials (11.10%),
Information Technology (19.03%), Materials (3.59%),
Telecommunication Services (2.97%) and Utilities (3.28%).
S&P may from time to time, in its sole discretion, add
companies to, or delete companies from, the S&P
500
®
Index to achieve the objectives stated above.
THE S&P
500
®
INDEX DOES NOT REFLECT THE PAYMENT OF DIVIDENDS ON THE STOCKS
UNDERLYING IT AND THEREFORE THE RETURN ON THE INDEX
LASERS
sm
WILL NOT PRODUCE THE SAME RETURN YOU WOULD RECEIVE IF YOU WERE
TO PURCHASE SUCH UNDERLYING STOCKS AND HOLD THEM UNTIL THE
MATURITY DATE.
48
Computation
of the S&P
500
®
Index
On March 21, 2005, S&P began to calculate the S&P
500
®
Index based on a half float-adjusted formula, and on
September 16, 2005, S&P completed the full float
adjustment of the S&P
500
®
Index. S&Ps criteria for selecting stocks for the
S&P
500
®
Index were not changed by the shift to float adjustment.
However, the adjustment affects each companys weight in
the S&P
500
®
Index (i.e., its market value).
Under float adjustment, the share counts used in calculating the
S&P
500
®
Index reflect only those shares that are available to investors
and not all of a companys outstanding shares. S&P
defines three groups of shareholders whose holdings are subject
to float adjustment:
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|
|
holdings by other publicly traded corporations, venture capital
firms, private equity firms, strategic partners, or leveraged
buyout groups;
|
|
|
|
|
|
holdings by governmental entities, including all levels of
government in the United States or foreign countries; and
|
|
|
|
|
|
holdings by current or former officers and directors of the
company, founders of the company, or family trusts of officers,
directors, or founders, as well as holdings of trusts,
foundations, pension funds, employee stock ownership plans, or
other investment vehicles associated with and controlled by the
company.
|
However, treasury stock, stock options, restricted shares,
equity participation units, warrants, preferred stock,
convertible stock, and rights are not part of the float. In
cases where holdings in a group exceed 10% of the outstanding
shares of a company, the holdings of that group will be excluded
from the float-adjusted count of shares to be used in the
S&P
500
®
Index calculation. Mutual funds, investment advisory firms,
pension funds, or foundations not associated with the company
and investment funds in insurance companies, shares of a United
States company traded in Canada as exchangeable
shares, shares that trust beneficiaries may buy or sell
without difficulty or significant additional expense beyond
typical brokerage fees, and, if a company has multiple classes
of stock outstanding, shares in an unlisted or non-traded class
if such shares are convertible by shareholders without undue
delay and cost, are also part of the float.
For each stock, an investable weight factor (IWF) is
calculated by dividing the available float shares, defined as
the total shares outstanding less shares held in one or more of
the three groups listed above where the group holdings exceed
10% of the outstanding shares, by the total shares outstanding.
The float-adjusted Index will then be calculated by dividing the
sum of the IWF multiplied by both the price and the total shares
outstanding for each stock by the Index divisor. For companies
with multiple classes of stock, S&P will calculate the
weighted average IWF for each stock using the proportion of the
total company market capitalization of each share class as
weights.
The S&P
500
®
Index is calculated using a base-weighted aggregate methodology:
the level of the S&P
500
®
Index reflects the total Market Value of all Index component
stocks relative to the S&P
500
®
Indexs base period of
1941-43
(the
base period).
An indexed number is used to represent the results of this
calculation in order to make the value easier to work with and
track over time.
The actual total market value of the S&P
500
®
Index component stocks during the base period has been set equal
to an indexed value of 10. This is often indicated by the
notation
1941-43=10.
In practice, the daily calculation of the S&P
500
®
Index is computed by dividing the total market value of the
S&P
500
®
Index component stocks by a number called the Index divisor. By
itself, the Index divisor is an arbitrary number. However, in
the context of the calculation of the S&P
500
®
Index, it is the only link to the original base period level of
the S&P
500
®
Index. The Index divisor keeps the S&P
500
®
Index comparable over time and is the manipulation point for all
adjustments to the S&P
500
®
Index (Index maintenance).
Index maintenance includes monitoring and completing the
adjustments for company additions and deletions, share changes,
stock splits, stock dividends, and stock price adjustments due
to company restructurings or spinoffs.
To prevent the level of the S&P
500
®
Index from changing due to corporate actions, all corporate
actions which affect the total market value of the S&P
500
®
Index require an Index divisor adjustment. By adjusting the
Index divisor for the change in total market value, the level of
the S&P
500
®
Index remains constant. This helps maintain
49
the level of the S&P
500
®
Index as an accurate barometer of stock market performance and
ensures that the movement of the S&P
500
®
Index does not reflect the corporate actions of individual
companies in the S&P
500
®
Index. All Index divisor adjustments are made after the close of
trading. Some corporate actions, such as stock splits and stock
dividends, require simple changes in the common shares
outstanding and the stock prices of the companies in the
S&P
500
®
Index and do not require Index divisor adjustments.
Historical Information.
The following table
sets forth the high and low closing values, as well as the
end-of-quarter
closing values, of the S&P
500
®
Index from January 2, 2006 through January 25, 2011.
We obtained these closing values and other information below
from Bloomberg Financial Markets, without independent
verification. The underlying index experiences periods of high
volatility, and you should not take the historical values of the
underlying index as an indication of future performance.
|
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|
|
High
|
|
|
Low
|
|
|
Period End
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
1,307.25
|
|
|
|
1,254.78
|
|
|
|
1,294.83
|
|
Second
|
|
|
1,325.76
|
|
|
|
1,223.69
|
|
|
|
1,270.20
|
|
Third
|
|
|
1,339.15
|
|
|
|
1,234.49
|
|
|
|
1,335.85
|
|
Fourth
|
|
|
1,427.09
|
|
|
|
1,331.32
|
|
|
|
1,418.30
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
1,459.68
|
|
|
|
1,374.12
|
|
|
|
1,420.86
|
|
Second
|
|
|
1,539.18
|
|
|
|
1,424.55
|
|
|
|
1,503.35
|
|
Third
|
|
|
1,553.08
|
|
|
|
1,406.70
|
|
|
|
1,526.75
|
|
Fourth
|
|
|
1,565.15
|
|
|
|
1,407.22
|
|
|
|
1,468.36
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
1,447.16
|
|
|
|
1,273.37
|
|
|
|
1,322.70
|
|
Second
|
|
|
1,426.63
|
|
|
|
1,278.38
|
|
|
|
1,280.00
|
|
Third
|
|
|
1,305.32
|
|
|
|
1,106.39
|
|
|
|
1,166.36
|
|
Fourth
|
|
|
1,161.06
|
|
|
|
752.44
|
|
|
|
903.25
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
934.70
|
|
|
|
676.53
|
|
|
|
797.87
|
|
Second
|
|
|
946.21
|
|
|
|
811.08
|
|
|
|
919.32
|
|
Third
|
|
|
1,071.66
|
|
|
|
879.13
|
|
|
|
1,057.08
|
|
Fourth
|
|
|
1,127.78
|
|
|
|
1,025.21
|
|
|
|
1,115.10
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
1,174.17
|
|
|
|
1,056.74
|
|
|
|
1,169.43
|
|
Second
|
|
|
1,217.28
|
|
|
|
1,030.71
|
|
|
|
1,030.71
|
|
Third
|
|
|
1,148.67
|
|
|
|
1,022.58
|
|
|
|
1,141.20
|
|
Fourth
|
|
|
1,259.78
|
|
|
|
1,137.03
|
|
|
|
1,257.64
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
First (through January 25)
|
|
|
1,295.02
|
|
|
|
1,269.75
|
|
|
|
1,291.18
|
|
On January 25, 2011, the closing value of the S&P
500
®
Index was 1,291.18.
50
The following graph illustrates the historical performance of
S&P
500
®
Index based on the closing value thereof on each Index Business
Day from January 2, 2006 through January 25, 2011.
Past movements of the S&P
500
®
Index are not indicative of future index values.
License
Agreement
S&P and Citigroup Global Markets have entered into a
non-exclusive license agreement providing for the license to
Citigroup Inc., Citigroup Funding and its affiliates, in
exchange for a fee, of the right to use indices owned and
published by S&P in connection with certain financial
instruments, including the Index
LASERS
sm
.
The license agreement between S&P and Citigroup Global
Markets provides that the following language must be stated in
this pricing supplement.
The Index
LASERS
sm
are not sponsored, endorsed, sold or promoted by S&P.
S&P makes no representation or warranty, express or
implied, to the holders of the Index
LASERS
sm
or any member of the public regarding the advisability of
investing in securities generally or in the Index
LASERS
sm
particularly. S&Ps only relationship to Citigroup
Funding and its affiliates (other than transactions entered into
in the ordinary course of business) is the licensing of certain
trademarks, trade names and service marks of S&P and of the
S&P
500
®
Index, which is determined, composed and calculated by S&P
without regard to Citigroup Funding, its affiliates or the Index
LASERS
sm
.
S&P has no obligation to take the needs of Citigroup
Funding, its affiliates or the holders of the Index
LASERS
sm
into consideration in determining, composing or calculating the
S&P
500
®
Index. S&P is not responsible for and has not participated
in the determination of the timing of, prices at or quantities
of the Index
LASERS
sm
to be issued or in the determination or calculation of the
equation by which the Index
LASERS
sm
are to be converted into cash.
S&P has no obligation or liability in connection with the
administration, marketing or trading of the Index
LASERS
sm
.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS
OF THE S&P
500
®
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO
BE OBTAINED BY CITIGROUP FUNDING, HOLDERS OF THE INDEX
LASERS
sm
,
OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P
500
®
INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
51
OR USE WITH RESPECT TO THE S&P
500
®
INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE
NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS
BETWEEN S&P AND CITIGROUP FUNDING.
All disclosures contained in this pricing supplement regarding
the S&P
500
®
Index, including its makeup, method of calculation and changes
in its components, are derived from publicly available
information prepared by S&P. None of Citigroup Funding,
Citigroup, Citigroup Global Markets Inc. or the trustee assumes
any responsibility for the accuracy or completeness of such
information.
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the principal
U.S. federal income tax considerations that may be relevant
to the purchase, ownership and disposition of the Certificates.
Unless otherwise specifically indicated, this summary addresses
the tax consequences only to a person that is (i) an
individual citizen or resident of the United States, (ii) a
corporation organized in or under the laws of the United States
or any state thereof or the District of Columbia or
(iii) otherwise subject to United States federal income
taxation on a net income basis in respect of the Certificates (a
U.S. Holder). All references to
holders (including U.S. Holders) in this
section are to beneficial owners of the Certificates. This
summary does not purport to be a comprehensive description of
all of the tax considerations that may be relevant to a decision
to purchase the Certificates by any particular investor,
including tax considerations that arise from rules of general
application to all taxpayers or to certain classes of taxpayers
or that are generally assumed to be known by investors. This
summary also does not address the tax consequences to
(i) persons that may be subject to special treatment under
United States federal income tax law, such as banks, insurance
companies, thrift institutions, regulated investment companies,
real estate investment trusts, tax-exempt organizations, traders
in securities that elect to mark to market and dealers in
securities or currencies, (ii) person that will hold the
Certificates as part of a position in a straddle,
hedge, conversion transaction,
synthetic security or other integrated investment,
who hold other stocks or securities reflecting positions in the
S&P
500
®
Index or investment portfolios that include shares of any of the
companies included in the S&P
500
®
Index, or who acquire Certificates within 30 days of
selling such positions or shares, (iii) persons whose
functional currency is not the United States dollar,
(iv) persons that do not hold the Certificates as capital
assets or (v) persons that did not purchase the
Certificates in the initial offering.
This summary is based on United States federal income tax laws,
regulations, rulings and decisions in effect as of the date of
this offering document, all of which are subject to change at
any time (possibly with retroactive effect). As the law is
technical and complex, the discussion below necessarily
represents only a general summary. Moreover, the effect of any
applicable state, local or foreign tax laws is not discussed.
The following discussion assumes that none of the companies
included in the S&P
500
®
Index is or will become at any time during the term of the
Certificates, a passive foreign investment company for
U.S. federal income tax purposes. Prospective investors
should note that if that assumption is not accurate, then it is
possible that the U.S. federal income tax consequences of
owning the Certificates would differ significantly from the
consequences described below.
The discussion below contains certain statements regarding the
advisability of certain tax elections. These statements are of a
general nature and are not addressed to any taxpayers
particular circumstances.
A PROSPECTIVE INVESTOR IN THE
CERTIFICATES SHOULD CONSULT ITS OWN TAX ADVISORS IN DETERMINING
THE TAX CONSEQUENCES OF AN INVESTMENT IN THE CERTIFICATES,
INCLUDING THE APPLICATION OF STATE, LOCAL OR OTHER TAX LAWS AND
THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
52
Tax
Status of the Trust
The Trust will be treated as a grantor trust owned solely by the
present and future holders of Certificates for U.S. federal
income tax purposes, and accordingly, income received by the
Trust will be treated as income of the holders of the
Certificates in the manner set forth below.
Characterization
of Trust Assets
There are no regulations, published rulings or judicial
decisions addressing the characterization for U.S. federal
income tax purposes of the Securities and the Warrants. Pursuant
to the amended and restated declaration of trust of the Trust,
every holder of the Certificates, the Trust and Citigroup
Funding agrees to characterize and treat for U.S. federal
income tax purposes, in the absence of an administrative
determination or judicial ruling to the contrary, (i) the
Security and the Warrant as two separate financial instruments;
(ii) each Security as a cash-settled variable prepaid
forward contract with respect to the S&P
500
®
Index under which at the time of issuance of the Certificates,
you pay Citigroup Funding, with respect to the Security, the
amount set forth on the cover page of this offering document as
the offering price for the Security (the issue
price) in consideration for Citigroup Fundings
obligation to deliver to you at maturity of the Security a cash
amount equal to $10 plus a Security Return Amount (which may be
positive, zero, or negative) based upon the performance of the
S&P
500
®
Index, in full satisfaction of its obligation under such forward
contract; and (iii) each Warrant as a cash-settled put
option with respect to the S&P
500
®
Index under which at the time of issuance of the Certificates,
with respect to the Warrant, you pay Citigroup Funding the
amount set forth on the cover page of this offering document as
the offering price for the Warrant (the option
premium) in consideration for the right to sell to
Citigroup Funding at expiration of the Warrant, for a cash
amount equal to $10, a notional position in the S&P
500
®
Index with an initial value of $10.
The Trust and Citigroup Funding will report to you and to the
Internal Revenue Service (IRS) the payments under
the Securities and the Warrants according to this agreed-to
characterization and treatment. Unless explicitly stated
otherwise, based on the agreement above and certain
representations made by Citigroup Funding with respect to the
Securities and the Warrants, the remainder of this section
Certain United States Federal Income Tax
Considerations assumes that you will be treated as the
owner of your
pro rata
portion of two separate financial
instruments consisting of the Security and the Warrant, rather
than as the owner of a single financial instrument. Prospective
investors in the Certificates should be aware, however, that no
ruling is being requested from the IRS with respect to the
Securities and the Warrants and the IRS might take a different
view as to the proper characterization of the Securities or of
the Warrants and of the U.S. federal income tax
consequences to a holder thereof. As discussed below,
alternative treatments of the Certificates could result in less
favorable U.S. federal income tax consequences to you,
including a requirement to accrue income on a current basis and
to treat any gain as ordinary income.
Tax Basis
in the Securities and the Warrants
In order to determine your tax basis in the Securities and the
Warrants, you should allocate the purchase price paid for your
Certificates between your
pro rata
portion of the
Securities and the Warrants, in proportion to the fair market
values thereof. Your initial tax basis in a Security generally
will equal the issue price of
$ ,
and your initial tax basis in a Warrant will equal the option
premium of $ .
Overview
Your tax treatment may differ significantly depending on whether
you hold a Security and a Warrant together as a Certificate or
whether you exchange your Certificate for your
pro rata
portion of the assets of the Trust and hold a Security or
Warrant separately, without holding the other. In addition, your
tax treatment will depend on the application of the straddle
rules described in more detail under Taxation
of Certificates
Straddle Rules
. Unless
specified otherwise, the discussion below assumes that the
straddle rules will apply to the Securities and the Warrants
throughout the term of the Certificates. Furthermore, your tax
treatment may depend on certain elections discussed in more
detail below. In particular, it is important that you consider
making the mixed straddle election described under
Taxation of Certificates
Mixed
Straddle Election
. Otherwise, you may be required to
recognize gain on the Warrants, if any, on an annual basis.
Unless otherwise specified, the discussion below assumes
53
that the mixed straddle election and the identified straddle
election described in more detail under
Taxation of Certificates
Straddle Rules
Treatment of Losses;
Identified Straddle Election, below, will apply.
As discussed in more detail below, in general the tax treatment
of your investment in the Securities and the Warrants will be as
follows:
Any gain you realize with respect to the Certificates (such
as at maturity or upon sale) will be short-term capital gain,
unless you take the steps described in the next italicized
paragraph below.
|
|
|
|
|
If you hold Certificates at maturity or if you sell all of your
Certificates prior to maturity, you will recognize net capital
gain or loss at maturity or upon sale, as applicable, equal to
the difference between the amount of cash received and the
amount you paid for the Certificates. Your capital gain or loss
will be short-term gain or loss regardless of how long you have
held the Certificates.
|
You will recognize long-term capital gain, if any, only if
you exchange Certificates for a
pro rata
portion of the
Warrants and Securities and dispose of either the Warrants or
the Securities and continue to hold the other for more than one
year. You should be aware, however, that if you hold only the
Securities or only the Warrants, you may receive less than the
principal amount of your investment at maturity.
|
|
|
|
|
If you dispose of the Warrants and continue to hold the
Securities, you will recognize short-term capital gain on the
disposition of the Warrants if the amount realized exceeds the
option premium. You will have capital gain or loss on the
subsequent sale or other taxable disposition of the Securities,
which will be long-term gain or loss only if you continue to
hold the Securities for more than one year after your
disposition of the Warrants.
|
|
|
|
If you dispose of the Securities and continue to hold the
Warrants, you will recognize short-term capital gain on
disposition of the Securities if the amount realized exceeds the
issue price. You will have capital gain or loss on the
subsequent sale or other taxable disposition of the Warrants,
which will be long-term gain or loss only if you continue to
hold the Warrants for more than one year after your disposition
of the Securities.
|
Taxation
of Certificates
In
General
Except where otherwise stated, the discussion below assumes that
the mixed straddle election described under
Taxation of Certificates
Mixed
Straddle Election
will apply. Under that assumption,
you will not be required to accrue income or to take into
account any gain or loss with respect to the Certificates until
maturity or disposition of the Certificates.
Maturity,
Sale, Exchange or Other Taxable Disposition of
Certificates
The maturity, sale or exchange of the Certificates will be
treated as a taxable disposition of the Securities and of the
Warrants. Accordingly, if you dispose of all of your
Certificates, you generally will recognize net capital gain or
loss equal to the difference between the amount realized and the
amount you paid for the Certificates. As described below under
Taxation of Certificates
Straddle Rules
Holding Period, your
capital gain or loss will be short-term gain or loss regardless
of how long you have held the Certificates at the time of
maturity or disposition. For discussion of the treatment of a
partial sale or other taxable disposition of Certificates, see
below under Taxation of
Certificates
Straddle Rules
Treatment of Losses; Identified Straddle
Election.
Straddle
Rules
In General.
As described above, the maturity,
sale or exchange of all or part of your Certificates will be
treated as a taxable disposition of the Securities and Warrants
relating to those Certificates. In that event, you may realize
gain on the Securities and a loss on the Warrants, or vice
versa. As described below, special U.S. federal income tax
straddle rules apply when taxpayers realize gains
and losses from offsetting positions in actively traded personal
property.
54
A Security and a Warrant will constitute a straddle at the
issuance of the Certificates, because your risk of loss from
holding the Security is substantially diminished at that time by
your ownership of the Warrant. The remainder of this section
Certain United States Federal Income Tax
Considerations assumes that the Securities and the
Warrants will be subject to the straddle rules throughout the
term of the Certificates. As a result, special loss, holding
period rules, and expense capitalization rules will apply to the
Securities and the Warrants, as described immediately below. You
should consult your own tax advisors if you own any other stocks
or securities reflecting positions in the S&P
500
®
Index or investment portfolios that include shares of any of the
companies included in the indices comprising the S&P
500
®
Index.
Treatment of Losses; Identified Straddle
Election.
Under the general straddle rules, you
would be permitted to take into account a loss recognized on a
position in the straddle only to the extent the loss exceeds any
unrecognized gain at the end of a taxable year with respect to
any offsetting position in the straddle (which could be the
Certificates, Securities or Warrants) retained by you. As a
result, if you sold, exchanged or otherwise disposed of a part,
but not all of your Certificates, you might be required to pay
tax on taxable gain in excess of your economic gain on the
Certificates that you sold.
This general loss deferral rule will not apply, however, if each
Security and each Warrant is identified as positions comprising
a separate identified straddle (an identified
straddle election), in the manner described in more detail
below. Under the identified straddle election, if you realize a
loss on the disposition of a Warrant held as part of an
identified straddle and a gain on the Security held as part of
the same identified straddle (or vice versa), the loss on the
first instrument will be added to the basis of the second
instrument. As a result, upon a disposition of your
Certificates, your net capital gain or loss from that
disposition will be equal to the difference between the amount
realized and the amount you paid for the sold Certificates.
In order to make an identified straddle election,
the positions in the straddle must be clearly identified on the
taxpayers records as an identified straddle before the
close of the day on which the straddle is acquired, subject to
regulations. The Trust will make an identified straddle election
on behalf of all holders of the Certificates by identifying on
its records each Security and each Warrant as a separate
identified straddle before the close of the day on which the
Securities and Warrants are acquired. It is unclear, however,
whether the identified straddle election made by the Trust on
behalf of a holder will be effective. Therefore, it is generally
advisable that you also identify each Security and each Warrant
as a separate identified straddle in your records no later than
the close of the day on which you acquire the Certificates.
To make the election, you must identify the Securities and the
Warrants as an identified straddle in your records
no later than the close of the day on which you acquire the
Certificates. The identified straddle election in its current
form is new and certain aspects of its application are
uncertain, including the manner in which an identified straddle
election may be made. An identification statement is included in
this offering document immediately following this section
Certain United States Federal Income Tax
Considerations. The identification statement may be
sufficient to comply with the requirements for making an
identified straddle election, if you keep the identification
statement as part of your books and records. In addition, the
broker through which you purchased your Certificates may provide
a trade confirmation that identifies each Security and each
Warrant as a separate identified straddle for purposes of the
straddle rules and that provides that you agree to treat your
positions in the Securities and the Warrants accordingly. In any
case, you should keep the trade confirmation together with the
identification statement as part of your books and records. You
should consult your own tax advisors in determining how the
identified straddle rules may apply to you. Except where
otherwise stated, the remainder of this section Certain
United States Federal Income Tax Considerations assumes
that an identified straddle election will apply.
Holding Period.
Your holding period in any
position that is part of a straddle (for example, the
Securities) does not begin until after the date on which you
dispose of all positions that offset that position (for example,
the Warrants). Therefore, you will recognize short-term capital
gain or loss on maturity or disposition of the Certificates
regardless of how long you have held the Certificates.
Capitalization of Expenses.
You are required
to capitalize any otherwise deductible interest or carrying
charges incurred with respect to any position in a straddle by
increasing your tax basis in the position, rather than deducting
such amounts. The remainder of this section Certain United
States Federal Income Tax Considerations assumes that you
will not have any interest or carrying charges with respect to
your Certificates.
55
Special
Rules Applicable to Warrants
The Warrants may be subject to special rules applicable to
section 1256 contracts that are described below
if the Warrants are treated as listed options. If
the Warrants are not treated as section 1256 contracts, you
will not be required to take into account any gain or loss with
respect to the Warrants until maturity or disposition of the
Certificates or of the Warrants.
For purposes of the section 1256 rules, a listed
option is defined as any option which is traded on
(or subject to the rules of) a qualified board or
exchange. The Warrants will not be listed on a qualified
board or exchange, but application will be made to list the
Certificates on NYSE Arca. No authority addresses the question
of whether the Warrants will be considered subject to the rules
of a qualified board or exchange under these circumstances.
Accordingly, it is possible that the Warrants may be treated as
listed options and therefore as
section 1256 contracts. In that case, you would
be subject to special timing and holding period rules, absent
the mixed straddle election described below.
Under the rules applicable to section 1256 contracts, each
Warrant that is part of a Certificate held by you at the close
of your taxable year is deemed to be sold at the Warrants
fair market value (the mark-to-market rule). You
would recognize gain, if any, under the mark-to-market rule
equal to the difference between the Warrants fair market
value and your basis in the Warrant, which is equal to the
option premium you paid to purchase the Warrant, adjusted for
any gain or loss that you took into account in prior years under
the mark-to-market rule. Any losses realized under the
mark-to-market rule would be subject to deferral, however, under
the straddle rules described above. Any gain or loss from the
deemed mark-to-market sale would be required to be taken into
account as 60% long-term capital gain or loss and 40% short-term
capital gain or loss (the 60/40 rule), regardless of
your holding period for the Certificate. Similarly, any gain or
loss realized on disposition of the Certificate or possibly on
exchange of a Certificate for your
pro rata
share of the
Securities and the Warrants would be subject to the
60/40 rule
to the extent such gain or loss were allocable to the Warrant.
Mixed
Straddle Election
As discussed above under Taxation of
Certificates
Special Rules Applicable to
Warrants
, the Warrants may be treated as
section 1256 contracts. The Securities will not be treated
as section 1256 contracts. A mixed straddle is any
straddle in which at least one, but not all, of the
positions, is a section 1256 contract. Accordingly, holding
the Certificates may constitute a mixed straddle
under the rules governing section 1256 contracts. If you
hold a Certificate, generally it will be advisable for you to
make a mixed straddle election with respect to the
Certificate. If you make this election, the mark-to-market rule
would not apply to the Warrants even if they were treated as
listed options and subject to the section 1256 rules.
Accordingly, you will not be required to take into account any
gain or loss with respect to the Warrants until they mature or
you dispose of either the Warrants or the Securities.
In order to make a mixed straddle election, the
positions in the straddle must be clearly identified on the
taxpayers records as a mixed straddle before the close of
the day on which the straddle is acquired. In addition, the
taxpayer must file IRS Form 6781. The Trust will make a
mixed straddle election on behalf of all holders of
the Certificates by identifying on its records the Securities
and the Warrants as a mixed straddle before the close of the day
on which the Securities and Warrants are acquired, and by filing
IRS form 6781. It is unclear, however, whether the election
made by the Trust on behalf of a holder will be effective.
Therefore, it is generally advisable that you also make a
mixed straddle election.
To make the election, you must check Box A on IRS Form 6781
(a copy of which is attached to this offering document as
Exhibit A and also is available on the IRS website at
http://www.irs.gov)
and attach the Form to your tax return for the year in which you
acquire the Certificates. You must also identify the Securities
and the Warrants as a straddle in your records no later than the
close of the day on which you acquire the Certificates. The
rules do not address specifically how to satisfy the
identification requirements of the mixed straddle election. An
identification statement is included in this offering document
immediately following this section Certain United States
Federal Income Tax Considerations. The identification
statement may be sufficient to comply with mixed straddle
election requirements, if you keep the identification statement
as part of your books and records. In addition, the broker
through which you purchased your Certificates may provide a
trade confirmation that identifies each Security and
56
each Warrant as a mixed straddle for purposes of the
section 1256 rules and that provides that you agree to
treat your positions in the Securities and the Warrants
accordingly. In any case, you should keep the trade confirmation
together with the identification statement as part of your books
and records. Except where otherwise stated, the remainder of
this section Certain United States Federal Income Tax
Considerations assumes that a mixed straddle election will
apply.
You will not be able to make the mixed straddle election with
respect to the Securities and the Warrants after the first year
that you hold your Certificates. The mixed straddle election
applies to the taxable year for which the election is made and
all future taxable years, and may not be revoked without the
consent of the IRS. You should consult your own tax advisors in
determining whether to make a mixed straddle election in light
of your particular tax circumstances and how to comply with the
identification requirements of such election.
Exchange
of Certificates for a Pro Rata Portion of Securities and
Warrants
In
General
If you exchange the Certificates for a
pro rata
portion
of the Securities and Warrants, you generally will not recognize
gain or loss on the exchange. In order to exercise your exchange
right, your account must be approved for options trading. You
should consult with your financial advisor to determine whether
your account would meet the options trading requirements.
You will not be required to accrue income or to take into
account any gain or loss with respect to the Securities until
maturity or disposition of the Securities.
The Warrants will not be listed on an exchange and therefore
will not be subject to the section 1256 rules. See
discussion above under Taxation of
Certificates
Special Rules Applicable to
Warrants
. Accordingly, you also will not be required
to accrue income or to take into account any gain or loss with
respect to the Warrants until maturity or disposition of the
Warrants.
Disposition
of Securities or Warrants
If you hold the Securities and Warrants to maturity, or dispose
of Securities and Warrants that have been identified as part of
an identified straddle at the same time, you generally will be
taxed as described under Taxation of
Certificates
Maturity, Sale, Exchange or Other
Taxable Disposition of Certificates
. As described
therein, any gain or loss that you recognize would be short-term
capital gain or loss.
If you dispose of a Warrant and continue to hold the Security
identified as part of the same identified straddle, you will
realize capital gain or loss equal to the difference between the
amount realized on disposition of the Warrant and the option
premium you paid for the Warrant. Gain, if any, will be taxable
in the year of disposition, and will be treated as short-term
capital gain. Loss, if any, will be capitalized into the basis
of the Security and will not be deductible until you sell or
otherwise dispose of the Security. On later disposition of the
Security, including on maturity of the Security, you will
recognize capital gain or loss equal to the difference between
the amount realized on disposition and your adjusted basis for
the Security, which will equal the issue price of the Security
plus any loss from the Warrant that was capitalized as described
in the previous sentence. Gain or loss from disposition of the
Security will be long-term gain or loss if you have held the
Security for more than one year after disposing of the Warrant,
and otherwise will be short-term gain or loss. The deductibility
of capital losses is subject to limitations.
If you dispose of a Security and continue to hold the Warrant
identified as part of the same identified straddle, you will
realize capital gain or loss equal to the difference between the
amount realized on disposition of the Security and the issue
price for the Security. Gain, if any, will be taxable in the
year of disposition, and will be treated as short-term capital
gain. Loss, if any, will be capitalized into the basis of the
Warrant and will not be deductible until you sell or otherwise
dispose of the Warrant. On later disposition of the Warrant,
including on maturity of the Warrant, you will recognize capital
gain or loss equal to the difference between the amount realized
on disposition and your adjusted basis for the Warrant, which
will equal the option premium you paid for the Warrant plus any
loss from the Security that was capitalized as described in the
previous sentence. Gain or loss from disposition of the Warrant
will be long-term gain or loss if you have held the Warrant for
more than one year after disposing of the Security, and
otherwise will be short-term gain or loss.
57
You should be aware that if you dispose of either the Security
or the Warrant and hold only the Security or only the Warrant,
you may receive less than the principal amount of your
investment at maturity.
Possible
Alternative Characterization
Due to the absence of authority as to the proper
characterization of the Securities and Warrants, no assurance
can be given that the IRS will accept, or that a court will
uphold, the characterization and tax treatment described above.
In particular, however, because you will be entitled to cash in
an amount equal to or greater than the purchase price paid for
the Securities and the Warrants if you hold the Certificates
until maturity, the IRS could seek to analyze the federal income
tax treatment of a Security and a Warrant as a single debt
instrument with a term to maturity equal to the term to maturity
of the Certificates, subject to Treasury regulations governing
contingent payment debt instruments (the Contingent
Payment Regulations).
The Contingent Payment Regulations are complex. Very generally,
if they applied to the Securities and the Warrants, you would be
required to accrue original issue discount every year at a
comparable yield for Citigroup Funding, determined
at the time of issuance of the Certificates. This original issue
discount would be includible as ordinary interest income in your
gross income over the term of the Certificates, although you
will receive no payments on the Certificates before maturity. In
addition, any gain realized on the sale, exchange or redemption
of the Certificates would be treated as ordinary income. Any
loss realized on such sale, exchange or redemption would be
treated as an ordinary loss to the extent of your original issue
discount inclusions with respect to the Certificates. Any loss
realized in excess of such amount generally would be treated as
a capital loss.
The Contingent Payment Regulations apply only to debt
instruments. As of the date on which the Certificates are issued
for initial sale to the public, Citigroup Funding expects that,
in general, investors in Certificates will be able to exercise
their legal right to exchange their Certificates for a
pro
rata
portion of the Warrants and Securities and to dispose
of one separately from the other, without significant
impediment. Moreover, investors who wish to obtain long-term
capital gain treatment on maturity or disposition of the
Securities will have an economic incentive to exchange their
Certificates for a
pro rata
portion of the Warrants and
Securities and dispose of the Warrants more than one year prior
to maturity of Securities. Accordingly, Citigroup Funding
believes that the Securities and the Warrants underlying the
Certificates should be treated not as a single debt instrument,
but as two separate financial instruments, as described above.
No assurance can be provided that the IRS will agree with this
position.
On December 7, 2007, the IRS and U.S. Treasury
Department issued a notice (the Notice) that
requests public comments on a comprehensive list of tax policy
issues raised by prepaid forward contracts, which include
financial instruments similar to the Certificates and the
Securities. The Notice contemplates that such instruments may
become subject to taxation on a current accrual basis under one
or more possible approaches, including mark-to-market
methodology; a regime similar to the Contingent Payment
Regulations; categorization of prepaid forward contracts as
debt; and treatment of prepaid forward contracts as
constructive ownership transactions discussed below.
The Notice also contemplates that all (or significant portions)
of an investors returns under prepaid forward contracts
could be taxed at ordinary income rates (as opposed to capital
gains rates). It is currently impossible to predict what
guidance, if any, will be issued as a result of the Notice, and
whether any such guidance could have retroactive effect.
In addition, legislation has been introduced for consideration
in the United States Congress that, if enacted into law, would
require current accrual of interest income on prepaid derivative
contracts with a term of more than one year (which would include
financial instruments similar to the Securities and may include
financial instruments similar to the Certificates) acquired
after the date of the legislations enactment. The
legislation also would implement special income accrual rules
for publicly traded prepaid derivative contracts. The schedule
for consideration of this legislation and the outcome of the
legislative process currently is uncertain.
Tax
Shelter Reporting Rules
Treasury regulations require that a taxpayer report to the IRS
transactions in which the taxpayer has sustained losses equal to
or in excess of certain thresholds. This requirement is subject
to a number of exceptions intended to eliminate many ordinary
course transactions where taxpayers cannot manipulate the timing
of losses. However,
58
because you will hold the Securities and the Warrants in the
form of a certificate in a trust and because the Securities and
the Warrants constitute a straddle, the exceptions will not
apply to losses on your investment in the Certificates or losses
from the Securities or the Warrants. Accordingly, you generally
will be required to report to the IRS any loss arising from your
investment in the Certificates that equals or exceeds the loss
threshold amount applicable to you. The loss threshold amounts
are, in general, $2 million in any taxable year for an
individual, partnership, S corporation, estate or trust,
and $10 million in any taxable year for a corporation or a
partnership with solely corporate investors. If you realize a
loss from your investment in Certificates in more than one year,
you may be required to combine those losses for reporting
purposes, although the loss threshold amounts generally will be
higher. You should consult your own tax advisors in determining
whether the tax shelter reporting requirements apply to your
transactions in the Securities and the Warrants and how to
comply with such requirements.
Non-United
States Holders
If you are a holder of the Certificates that is not a
U.S. Holder, any gain realized upon the sale, maturity,
exchange or other taxable disposition of the Certificates, the
Securities, or the Warrants generally will not be subject to
U.S. income and withholding tax, provided that:
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(i)
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you do not own, actively or constructively, 10% or more of the
total combined voting power of all classes of the Citigroup
Fundings stock entitled to vote, and are not a controlled
foreign corporation related, directly or indirectly, to
Citigroup Funding through stock ownership;
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(ii)
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you, as the beneficial owner of the Certificate certify on IRS
Form
W-8BEN
(or successor form), under penalties of perjury, that you are
not a U.S. person and provide your name and address or
otherwise satisfy applicable documentation requirements; and
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(iii)
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you do not maintain a trade or business in the United States to
which such gain is effectively connected or, if you are an
individual, you are not present in the United States for
183 days or more in the taxable year that contains the day
of the disposition and certain other conditions are met.
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In the Notice discussed above under Possible
Alternative Characterization, the IRS and
U.S. Treasury Department specifically question whether, and
to what degree, payments (or deemed accruals) in respect of a
prepaid forward contract should be subject to withholding.
Accordingly, it is possible that future guidance could be issued
as a result of the Notice requiring us to withhold on payments
made to
non-U.S. Holders
under the Certificates or the Securities.
Prospective investors that are not U.S. Holders should
consult their own tax advisors in determining the tax
consequences to them of an investment in the Certificates,
including the application of U.S. federal, state, local,
foreign or other tax laws, and the possible effects of changes
in federal or other tax laws.
Estate
Tax
If you are an individual who will be subject to
U.S. federal estate tax only with respect to
U.S. situs property (generally an individual who at death
is neither a citizen nor a domiciliary of the United States) or
an entity the property of which is potentially includible in
such an individuals gross estate for U.S. federal
estate tax purposes (for example, a trust funded by such an
individual and with respect to which the individual has retained
certain interests or powers), you should note that, absent an
applicable treaty benefit, the Certificates, the Securities or
the Warrants may be treated as U.S. situs property for
U.S. federal estate tax purposes. You are urged to consult
your own tax advisors regarding the U.S. federal estate tax
consequences of investing in the Certificates.
Recently
Enacted Legislation Potentially Affecting Taxation of
Certificates, Securities and Warrants Held By or Through Foreign
Entities
Recently enacted legislation generally imposes a withholding tax
of 30 percent on U.S. source payments of interest and
dividends and the gross proceeds of a disposition of property
that can produce U.S. source interest or dividends paid to
a foreign financial institution, unless such institution enters
into an agreement with the U.S. Government to collect and
provide to the U.S. tax authorities substantial information
regarding U.S. account holders of such institution (which
includes certain equity and debt holders of such institution, as
well as certain
59
account holders that are foreign entities with
U.S. owners). The legislation also generally imposes a
withholding tax of 30 percent on U.S. source payments
of interest and dividends and the gross proceeds of a
disposition of property that can produce U.S. source
interest or dividends paid to a non-financial foreign entity
unless such entity provides the withholding agent with a
certification identifying the direct and indirect
U.S. owners of the entity. Investors are encouraged to
consult with their own tax advisors regarding the possible
implications of this legislation on their investment in the
Certificates, Securities or Warrants, as applicable.
Information
Reporting and Backup Withholding
If you are a U.S. Holder, you may be subject to information
reporting and to backup withholding on certain amounts paid to
you unless you (i) come within certain exempt categories
and demonstrate this fact, or (ii) provide a correct
taxpayer identification number, certify as to no loss of
exemption from backup withholding and otherwise comply with
applicable requirements of the backup withholding rules. The
amount of any backup withholding will be allowed as a credit
against your federal income tax liability and may entitle you to
a refund, provided that the required information is timely
furnished to the IRS. If you are not a U.S. person, you
generally will not be subject to backup withholding and
information reporting with respect to the Certificates if you
have provided Citigroup Funding or the applicable payor with a
properly completed IRS
Form W-8BEN
described above and we (or the applicable payor) do not have
actual knowledge or reason to know that you are a
U.S. person. In addition, if you are a holder that is not
subject to information reporting, you generally may request from
the broker that holds your Certificates information separately
identifying income items and expense items (if any) of the Trust.
60
Identification
of Positions Forming a Straddle for Purposes of
Sections 1256(d) and 1092(a)(2) of the Internal Revenue
Code.
(Keep with
your trade confirmation)
Pursuant to Internal Revenue Code Sections 1092 and 1256, I
hereby identify each Security and each Warrant purchased as part
of Safety First
Trust Series [2009-4]
Principal-Protected Trust Certificates Linked to the
S&P
500
®
Index
due ,
2013 (the Certificates) as positions comprising a
separate identified straddle within the meaning of
Section 1092(a)(2) and, if a Warrant otherwise would
constitute a Section 1256 contract, as
positions comprising a mixed straddle within the meaning of
Section 1256(d). This identification incorporates by
reference the description of the Securities and the Warrants set
forth in the prospectus and pricing supplement
dated ,
2011 for the Certificates under the headings Description
of the Equity Index Participation Securities and
Description of the Equity Index Warrants. The
Securities and the Warrants were acquired on the date shown on
the trade confirmation attached hereto.
61
UNDERWRITING
The terms and conditions stated in the terms agreement
dated ,
2011, which incorporates by reference the underwriting agreement
basic provisions dated October 31, 2008, govern the sale
and purchase of the Certificates. The terms agreement and the
underwriting agreement basic provisions are referred to together
as the underwriting agreement. Citigroup Global Markets, as
underwriter, has agreed to purchase from the Trust, and the
Trust has agreed to sell to Citigroup Global Markets,
Certificates.
The underwriting agreement provides that the obligation of
Citigroup Global Markets to purchase the Certificates included
in this offering is subject to approval of certain legal matters
by counsel and to other conditions. Citigroup Global Markets is
obligated to purchase all of the Certificates if it purchases
any Certificates.
In view of the fact that the proceeds of the sale of the
Certificates ultimately will be used by the Trust to purchase
the Securities and the Warrants, the underwriting agreement
provides that Citigroup Funding will pay to Citigroup Global
Markets an underwriting discount of $0.325 per Certificate for
the account of Citigroup Global Markets. Citigroup Global
Markets proposes to offer some of the Certificates directly to
the public at the public offering price set forth on the cover
page of this offering document and some of the Certificates to
certain dealers, including Citi International Financial
Services, Citigroup Global Markets Singapore Pte. Ltd. and
Citigroup Global Markets Asia Limited, broker-dealers affiliated
with Citigroup Global Markets, at the public offering price less
a concession not to exceed $0.300 per Certificate. Citigroup
Global Markets may allow, and these dealers may reallow, a
concession not to exceed $0.300 per Certificate on sales to
certain other dealers. Financial Advisors employed by Smith
Barney, a division of Citigroup Global Markets, will receive a
fixed sales commission of $0.300 per Certificate for each
Certificate they sell. If all of the Certificates are not sold
at the initial offering price, Citigroup Global Markets may
change the public offering price and other selling terms.
The underwriting agreement provides that the Trust, Citigroup
Funding and Citigroup Inc. will indemnify Citigroup Global
Markets against certain liabilities, including liabilities under
the Securities Act, and will make certain contributions in
respect thereof, or will contribute to payments that Citigroup
Global Markets may be required to make in respect of any of
those liabilities and will reimburse Citigroup Global Markets
for certain legal and other expenses.
Prior to this offering, there has been no public market for the
Certificates. Consequently, the initial public offering price
for the Certificates was determined by negotiations among the
Trust and Citigroup Global Markets. There can be no assurance,
however, that the prices at which the Certificates will sell in
the public market after this offering will not be lower than the
price at which they are sold by Citigroup Global Markets or that
an active trading market in the Certificates will develop and
continue after this offering.
Citigroup Funding and the Trust will apply to list the
Certificates on NYSE Arca under the symbol
but we cannot assure you
that the Certificates will be approved for listing. If the
Certificates are not approved for listing, Citigroup Global
Markets currently intends to make an over-the-counter market in
the Certificates, but it is not obligated to do so.
In connection with the offering, Citigroup Global Markets, as
the underwriter, may purchase and sell the Certificates, the
Securities, the Warrants and the stocks included in the S&P
500
®
Index in the open market. These transactions may include
covering transactions. Covering transactions involve purchases
of the Certificates, the Securities or the Warrants in the open
market after the distribution has been completed to cover short
positions. These activities may have the effect of preventing or
retarding a decline in the market price of the Certificates, the
Securities or the Warrants. They may also cause the price of the
Certificates, the Securities or the Warrants to be higher than
the price that otherwise would exist in the open market in the
absence of these transactions. Citigroup Global Markets may
conduct these transactions in the over-the-counter market or
otherwise. If Citigroup Global Markets commences any of these
transactions, it may discontinue them at any time.
In order to hedge its obligations under the Securities and the
Warrants, Citigroup Funding expects to enter into one or more
swaps or other derivatives transactions with one or more of its
affiliates. See Use of Proceeds and Hedging
Activities, Risk Factors Risks Generally
Relating to the Certificates, Securities and
Warrants The Market Value of the Certificates,
Securities and Warrants May Be Affected by Purchases and Sales
of the Stocks
62
Included in the S&P
500
®
Index or Related Derivative Instruments by Affiliates of
Citigroup Funding and Citigroup
Fundings Hedging Activity Could Result in a Conflict of
Interest in this offering document.
We estimate that our total expenses for this offering will be
$ .
Citigroup Global Markets is an affiliate of Citigroup Funding.
Accordingly, the offering will conform to the requirements set
forth in Rule 2310 of the Financial Industry Regulatory
Authority regarding direct participation programs. Citigroup
Global Markets may not confirm sales to any discretionary
account without the prior specific written approval of a
customer.
This offering document may also be used by Citigroup
Fundings broker-dealer affiliates in connection with
offers and sales of the Certificates (subject to obtaining any
necessary approval of NYSE Arca for any of these offers and
sales), the Securities and the Warrants in market-making
transactions at negotiated prices related to prevailing market
prices at the time of sale. Any of these affiliates may act as
principal or agent in these transactions. None of these
affiliates is obligated to make a market in the Certificates,
the Securities and the Warrants and any may discontinue any
market-making at any time without notice, at its sole discretion.
WARNING TO INVESTORS IN HONG KONG ONLY:
The
contents of this offering document have not been reviewed by any
regulatory authority in Hong Kong. Investors are advised to
exercise caution in relation to the offer. If Investors are in
any doubt about any of the contents of this offering document,
they should obtain independent professional advice.
This offer is not being made in Hong Kong, by means of any
document, other than (1) to persons whose ordinary business
it is to buy or sell shares or debentures (whether as principal
or agent); (2) to professional investors within
the meaning of the Securities and Futures Ordinance (Cap.
571) of Hong Kong (the SFO) and any rules made
under the SFO; or (3) in other circumstances which do not
result in the document being a prospectus as defined
in the Companies Ordinance (Cap. 32) of Hong Kong (the
CO) or which do not constitute an offer to the
public within the meaning of the CO.
There is no advertisement, invitation or document relating to
the Certificates, the Securities or the Warrants, which is
directed at, or the contents of which are likely to be accessed
or read by, the public in Hong Kong (except if permitted to do
so under the laws of Hong Kong) other than with respect to
Certificates, Securities or Warrants which are or are intended
to be disposed of only to persons outside Hong Kong or only to
the persons or in the circumstances described in the preceding
paragraph.
WARNING TO INVESTORS IN SINGAPORE ONLY:
This
offering document has not been registered as a prospectus with
the Monetary Authority of Singapore under the Securities and
Futures Act, Chapter 289 of the Singapore Statutes (the
Securities and Futures Act). Accordingly, neither this offering
document nor any other document or material in connection with
the offer or sale, or invitation for subscription or purchase,
of the Certificates, the Securities or the Warrants may be
circulated or distributed, nor may the Certificates, the
Securities or the Warrants be offered or sold, or be made the
subject of an invitation for subscription or purchase, whether
directly or indirectly, to the public or any member of the
public in Singapore other than in circumstances where the
registration of a prospectus is not required and thus only
(1) to an institutional investor or other person falling
within section 274 of the Securities and Futures Act,
(2) to a relevant person (as defined in section 275 of
the Securities and Futures Act) or to any person pursuant to
section 275(1A) of the Securities and Futures Act and in
accordance with the conditions specified in section 275 of
the Securities and Futures Act, or (3) pursuant to, and in
accordance with the conditions of, any other applicable
provision of the Securities and Futures Act. No person receiving
a copy of this document may treat the same as constituting any
invitation to him/her, unless in the relevant territory such an
invitation could be lawfully made to him/her without compliance
with any registration or other legal requirements or where such
registration or other legal requirements have been complied
with. Each of the following relevant persons specified in
Section 275 of the Securities and Futures Act who has
subscribed for or purchased Certificates, Securities or
Warrants, namely a person who is:
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(a)
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a corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor, or
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63
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(b)
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a trust (other than a trust the trustee of which is an
accredited investor) whose sole purpose is to hold investments
and of which each beneficiary is an individual who is an
accredited investor,
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should note that securities of that corporation or the
beneficiaries rights and interest in that trust may not be
transferred for 6 months after that corporation or that
trust has acquired the Certificates, the Securities or the
Warrants under Section 275 of the Securities and Futures
Act pursuant to an offer made in reliance on an exemption under
Section 275 of the Securities and Futures Act unless:
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(i)
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the transfer is made only to institutional investors, or
relevant persons as defined in Section 275(2) of the
Securities and Futures Act, or arises from an offer referred to
in Section 275(1A) of the Securities and Futures Act (in
the case of a corporation) or in accordance with
Section 276(4)(i)(B) of the Securities and Futures Act (in
the case of a trust);
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(ii)
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no consideration is or will be given for the transfer; or
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(iii)
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the transfer is by operation of law.
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ERISA
MATTERS
Each purchaser of the Certificates, the Securities or the
Warrants or any interest therein will be deemed to have
represented and warranted on each day from and including the
date of its purchase or other acquisition of the Certificates,
the Securities or the Warrants through and including the date of
disposition of such Certificates, Securities or Warrants that
either:
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(a)
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it is not (i) an employee benefit plan subject to the
fiduciary responsibility provisions of ERISA, (ii) an
entity with respect to which part or all of its assets
constitute assets of any such employee benefit plan by reason of
C.F.R. 2510.3-101 or otherwise, (iii) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended (the Code) (for example, individual
retirement accounts, individual retirement annuities or Keogh
plans), or (iv) a government or other plan subject to
federal, state or local law substantially similar to the
fiduciary responsibility provisions of ERISA or
Section 4975 of the Code (such law, provisions and Section,
collectively, a Prohibited Transaction Provision and
(i), (ii), (iii) and (iv), collectively,
Plans); or
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(b)
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if it is a Plan, either (A)(i) none of Citigroup Global Markets,
its affiliates or any employee thereof is a Plan fiduciary that
has or exercises any discretionary authority or control with
respect to the Plans assets used to purchase the
Certificates, the Securities or the Warrants or renders
investment advice with respect to those assets, and
(ii) the Plan is paying no more than adequate consideration
for the Certificates, the Securities or the Warrants or
(B) its acquisition and holding of the Certificates,
Securities or the Warrants is not prohibited by a Prohibited
Transaction Provision or is exempt therefrom.
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The above representations and warranties are in lieu of the
representations and warranties described in the section
ERISA Matters in the accompanying prospectus
supplement relating to the Securities and the Warrants. Please
also refer to the section ERISA Matters in the
accompanying prospectus relating to the Securities and the
Warrants.
LEGAL
MATTERS
The validity of the Certificates and certain matters relating
thereto will be passed upon for the Trust by Dorsey &
Whitney LLP, as special Delaware counsel. Certain legal matters
will be passed upon for the underwriter by Cleary Gottlieb
Steen & Hamilton LLP, New York, New York. Cleary
Gottlieb Steen & Hamilton LLP has also acted as
special tax counsel to Citigroup Funding and Citigroup Inc. in
connection with the Certificates and Citigroup Inc.s
guarantee. Cleary Gottlieb Steen & Hamilton LLP has
from time to time acted as counsel for Citigroup Inc. and
certain of its subsidiaries, including Citigroup Funding, and
may do so in the future.
64
EXPERTS
The consolidated financial statements of Citigroup Inc. as of
December 31, 2009 and 2008, and for each of the years in
the three-year period ended December 31, 2009, and
managements assessment of effectiveness of internal
control over financial reporting as of December 31, 2009,
have been incorporated by reference herein in reliance upon the
reports of KPMG LLP, independent registered public accounting
firm, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing. To the
extent that KPMG audits and reports on consolidated financial
statements of Citigroup at future dates and consents to the use
of their reports thereon, such consolidated financial statements
also will be incorporated by reference in the registration
statement in reliance upon their reports and said authority. The
report of KPMG LLP on the consolidated financial statements
refers to changes in 2009 in Citigroup Inc.s methods of
accounting for
other-than-temporary
impairments on investment securities, business combinations,
noncontrolling interests in subsidiaries, and earnings per share.
65
We are responsible for the information contained and
incorporated by reference in this pricing supplement and the
accompanying prospectus supplement and prospectus and in any
related free writing prospectus we prepare or authorize. We have
not authorized anyone to give you any other information, and we
take no responsibility for any other information that others may
give you. You should not assume that the information contained
or incorporated by reference in this pricing supplement or the
accompanying prospectus supplement or prospectus is accurate as
of any date other than the date on the front of the document. We
are not making an offer of these securities in any state where
the offer is not permitted.
TABLE OF
CONTENTS
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Page
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Prospectus and Pricing Supplement
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2
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10
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18
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19
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21
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52
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62
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64
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64
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65
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Ex. A
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Medium-Term Notes Prospectus Supplement
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S-3
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S-6
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S-7
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S-33
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S-40
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S-41
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Index Warrant Prospectus Supplement
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S-3
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S-6
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S-7
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S-16
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S-18
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S-19
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Prospectus
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1
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6
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6
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6
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7
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EX-23.A
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EX-24.A
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Safety First Trust
Series 2009-4
Trust Certificates
Linked
to the
S&P
500
®
Index
Due ,
2013
$10.00 per Certificate
Any
Payments Due from
Safety First
Trust Series [2009-4]
Guaranteed by Citigroup Funding Inc.
Any
Payments Due from
Citigroup Funding Inc.
Guaranteed by Citigroup Inc.
PROSPECTUS
,
2011
Pricing
Supplement
,
2011
(Including Medium-Term Notes,
Series D, Prospectus Supplement
Dated
Index Warrants,
Series W-A,
Prospectus Supplement
Dated
and Prospectus
Dated
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 14.
Other
Expenses of Issuance and Distribution.
The following table sets forth the various expenses payable by
the Registrants in connection with the Securities being
registered hereby. All of the fees set forth below, except for
the commission registration fee, are estimates.
|
|
|
|
|
Commission Registration Fee
|
|
$
|
11,610
|
|
Accounting Fees
|
|
|
80,000
|
|
Trustees Fees and Expenses
|
|
|
60,000
|
|
Printing and Engraving Fees
|
|
|
300,000
|
|
FINRA Fee
|
|
|
75,500
|
|
Legal Fees and Expenses
|
|
|
300,000
|
|
Stock Exchange Listing Fees
|
|
|
50,000
|
|
|
|
|
|
|
Total
|
|
$
|
877,110
|
|
|
|
|
|
|
Item 15.
Indemnification
of Directors and Officers.
Citigroup
Subsection (a) of Section 145 of the General
Corporation Law of the State of Delaware, or DGCL, empowers a
corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such
action, suit or proceeding if the person acted in good faith and
in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe the persons conduct was unlawful. The
termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of
nolo
contendere
or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in or not
opposed to the best interest of the corporation, and, with
respect to any criminal action or proceeding, had reasonable
cause to believe that the persons conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a
corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in right of the corporation to
procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against
expenses (including attorneys fees) actually and
reasonably incurred by the person in connection with the defense
or settlement of such action or suit if the person acted in good
faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation and except
that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Subsection (d) of Section 145 of the DGCL provides
that any indemnification under subsections (a) and
(b) of Section 145 (unless ordered by a court) shall
be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the
circumstances because the person has met the applicable standard
of conduct set forth in subsections (a) and (b) of
Section 145. Such determination shall be made, with respect
to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who
are not parties to such action, suit or proceeding,
II-1
even though less than a quorum, or (2) by a committee of
such directors designated by the majority vote of such
directors, even though less than a quorum, or (3) if there
are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by
the stockholders.
Section 145 of the DGCL further provides that to the extent
a present or former director or officer of a corporation has
been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections
(a) and (b) of Section 145, or in defense of any
claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys fees) actually and
reasonably incurred by such person in connection therewith and
that such expenses may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the corporation as authorized in Section 145 of the DGCL;
that any indemnification and advancement of expenses provided
by, or granted pursuant to, Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may
be entitled; that indemnification provided by, or granted
pursuant to, Section 145 shall, unless otherwise provided
when authorized and ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall
inure to the benefit of such persons heirs, executors and
administrators; and empowers the corporation to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any
such capacity, or arising out of such persons status as
such, whether or not the corporation would have the power to
indemnify such person against such liabilities under
Section 145. Section Four of Article IV of
Citigroups By-Laws provides that Citigroup shall indemnify
its directors and officers to the fullest extent permitted by
the DGCL.
Citigroup also provides liability insurance for its directors
and officers which provides for coverage against loss from
claims made against directors and officers in their capacity as
such, including, subject to certain exceptions, liabilities
under the federal securities laws.
Section 102(b)(7) of the DGCL provides that a certificate
of incorporation may contain a provision eliminating or limiting
the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty
as a director, provided that such provision shall not eliminate
or limit the liability of a director (i) for any breach of
the directors duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL, or
(iv) for any transaction from which the director derived an
improper personal benefit. Article Tenth of
Citigroups Restated Certificate of Incorporation limits
the liability of directors to the fullest extent permitted by
Section 102(b)(7).
The directors and officers of Citigroup are covered by insurance
policies indemnifying them against certain liabilities,
including certain liabilities arising under the Securities Act,
which might be incurred by them in such capacities and against
which they cannot be indemnified by Citigroup. Any agents,
dealers or underwriters who execute any underwriting or
distribution agreement relating to securities offered pursuant
to this Registration Statement will agree to indemnify
Citigroups directors and their officers who signed the
Registration Statement against certain liabilities that may
arise under the Securities Act with respect to information
furnished to Citigroup by or on behalf of such indemnifying
party.
Citigroup
Funding
Subsection (a) of Section 145 of the General
Corporation Law of the State of Delaware, or DGCL, empowers a
corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such
action, suit or proceeding if the person acted in good faith and
in a manner the person
II-2
reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the
persons conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of
nolo contendere
or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the
person reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that the
persons conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a
corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in right of the corporation to
procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against
expenses (including attorneys fees) actually and
reasonably incurred by the person in connection with the defense
or settlement of such action or suit if the person acted in good
faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation and except
that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Subsection (d) of Section 145 of the DGCL provides
that any indemnification under subsections (a) and
(b) of Section 145 (unless ordered by a court) shall
be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the
circumstances because the person has met the applicable standard
of conduct set forth in subsections (a) and (b) of
Section 145. Such determination shall be made, with respect
to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who
are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) by a committee of such directors
designated by the majority vote of such directors, even though
less than a quorum, or (3) if there are no such directors,
or if such directors so direct, by independent legal counsel in
a written opinion, or (4) by the stockholders.
Section 145 of the DGCL further provides that to the extent
a present or former director or officer of a corporation has
been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections
(a) and (b) of Section 145, or in defense of any
claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys fees) actually and
reasonably incurred by such person in connection therewith and
that such expenses may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the corporation as authorized in Section 145 of the DGCL;
that any indemnification and advancement of expenses provided
by, or granted pursuant to, Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may
be entitled; that indemnification provided by, or granted
pursuant to, Section 145 shall, unless otherwise provided
when authorized and ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall
inure to the benefit of such persons heirs, executors and
administrators; and empowers the corporation to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any
such capacity, or arising out of such persons status as
such, whether or not the corporation would have the power to
indemnify such person against such liabilities under
Section 145. Section One of Article VII of
Citigroup Fundings By-Laws provides that Citigroup Funding
shall indemnify its directors and officers to the fullest extent
permitted by the DGCL.
Citigroup Funding also provides liability insurance for its
directors and officers which provides for coverage against loss
from claims made against directors and officers in their
capacity as such, including, subject to certain exceptions,
liabilities under the federal securities laws.
Section 102(b)(7) of the DGCL provides that a certificate
of incorporation may contain a provision eliminating or limiting
the personal liability of a director to the corporation or its
stockholders for monetary damages for breach
II-3
of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director
(i) for any breach of the directors duty of loyalty
to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article Seventh of Citigroup Fundings Certificate of
Incorporation limits the liability of directors to the fullest
extent permitted by Section 102(b)(7).
The directors and officers of Citigroup Funding are covered by
insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the
Securities Act, which might be incurred by them in such
capacities and against which they cannot be indemnified by
Citigroup Funding. Any agents, dealers or underwriters who
execute any underwriting or distribution agreement relating to
securities offered pursuant to this Registration Statement will
agree to indemnify Citigroup Fundings directors and their
officers who signed the Registration Statement against certain
liabilities that may arise under the Securities Act with respect
to information furnished to Citigroup Funding by or on behalf of
such indemnifying party.
The
Safety First Trusts
The form of amended and restated declaration of trust for each
of Safety First
Trust Series 2007-2,
Safety First
Trust Series 2007-3,
Safety First
Trust Series 2007-4,
Safety First
Trust Series 2008-1,
Safety First
Trust Series 2008-2,
Safety First
Trust Series 2008-3,
Safety First
Trust Series 2008-4,
Safety First
Trust Series 2008-5,
Safety First
Trust Series 2008-6,
Safety First
Trust Series 2008-7,
Safety First
Trust Series 2009-1,
Safety First
Trust Series 2009-2,
Safety First
Trust Series 2009-3,
Safety First
Trust Series 2009-4,
Safety First
Trust Series 2009-5,
Safety First
Trust Series 2009-6,
Safety First
Trust Series 2009-7
and Safety First
Trust Series 2009-8
(each a Safety First Trust) provides that no
Institutional Trustee (as defined in each amended and restated
declaration of trust) or any of its affiliates, Delaware Trustee
(as defined in each amended and restated declaration of trust)
or any of its affiliates, or officer, director, shareholder,
member, partner, employee, representative, custodian, nominee or
agent of the Institutional Trustee or the Delaware Trustee (each
a Fiduciary Indemnified Person), and no Regular
Trustee (as defined in each amended and restated declaration of
trust), affiliate of any Regular Trustee, or any officer,
director, shareholder, member, partner, employee, representative
or agent of any Regular Trustee, or any employee or agent of
such Safety First Trust or its affiliates (each a Company
Indemnified Person) shall be liable, responsible or
accountable in damages or otherwise to such Safety First Trust,
any Affiliate (as defined in the amended and restated
declaration of trust) of such Safety First Trust or any holder
of securities issued by such Safety First Trust, or to any
officer, director, shareholder, partner, member, representative,
employee or agent of such Safety First Trust or its Affiliates
for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Fiduciary Indemnified
Person or Company Indemnified Person in good faith on behalf of
such Safety First Trust and in a manner such Fiduciary
Indemnified Person or Company Indemnified Person reasonably
believed to be within the scope of the authority conferred on
such Fiduciary Indemnified Person or Company Indemnified Person
by such amended and restated declaration of trust or by law,
except that a Fiduciary Indemnified Person or Company
Indemnified Person shall be liable for any loss, damage, or
claim incurred by reason of such Fiduciary Indemnified
Persons or Company Indemnified Persons negligence or
willful misconduct with respect to such acts or omissions. The
amended and restated declaration of trust of each Safety First
Trust also provides that, to the full extent permitted by law,
Citigroup Funding Inc. (the Company) shall indemnify
any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
right of such Safety First Trust) by reason of the fact that he
is or was a Company Indemnified Person against expenses
(including attorneys fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of such Safety First Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The
amended and restated declaration of trust of each Safety First
Trust also provides that to the full extent permitted by law,
the Company shall indemnify any Company Indemnified Person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in right
of such Safety First Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys fees)
II-4
actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of such Safety First Trust and
except that no indemnification shall be made in respect of any
claim, issue or matter as to which such Company Indemnified
Person shall have been adjudged to be liable to such Safety
First Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such
other court shall deem proper. The amended and restated
declaration of trust of each Safety First Trust further provides
that expenses (including attorneys fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding
referred to in the immediately preceding two sentences shall be
paid by the Company in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or
on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Company as authorized in the
amended and restated declaration of trust. The directors and
officers of the Company and the individual trustees are covered
by insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the
Securities Act, which might be incurred by them in such
capacities and against which they cannot be indemnified by the
Company or the Safety First Trusts. Any agents, dealers or
underwriters who execute any of the agreements filed as
Exhibit 1 to this Registration Statement will agree to
indemnify the Companys directors and their officers and
the Safety First Trust Trustees who signed the Registration
Statement against certain liabilities that may arise under the
Securities Act with respect to information furnished to the
Company or any of the Safety First Trusts by or on behalf of
such indemnifying party.
For the undertaking with respect to indemnification, see
Item 17 herein.
See the Underwriting Agreement Basic Provisions filed as
Exhibit 1(a) for certain indemnification provisions.
Item
16.
Exhibits.
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
1(a)
|
|
|
|
Underwriting Agreement Basic Provisions for the offering of the
Principal-Protected Trust Certificates being registered under
this Registration Statement.**
|
4(a)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2007-2
(formerly Safety First Trust
Series 2006-3)
(incorporated by reference to Exhibit 3(l) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(b)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2007-3
(formerly Safety First Trust
Series 2006-4)
(incorporated by reference to Exhibit 3(m) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(c)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2007-4
(formerly Safety First Trust
Series 2006-5)
(incorporated by reference to Exhibit 3(n) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(d)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-1
(formerly Safety First Trust
Series 2006-6)
(incorporated by reference to Exhibit 3(o) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(e)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-2
(formerly Safety First Trust
Series 2006-7)
(incorporated by reference to Exhibit 3(p) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(f)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-3
(formerly Safety First Trust
Series 2006-8)
(incorporated by reference to Exhibit 3(q) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(g)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-4
(formerly Safety First Trust
Series 2006-9)
(incorporated by reference to Exhibit 3(r) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
II-5
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
4(h)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-5
(formerly Safety First Trust
Series 2006-10)
(incorporated by reference to Exhibit 3(s) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(i)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2007-2
(formerly Safety First
Trust Series 2006-3).**
|
4(j)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2007-3
(formerly Safety First
Trust Series 2006-4).**
|
4(k)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2007-4
(formerly Safety First
Trust Series 2006-5).**
|
4(l)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-1
(formerly Safety First
Trust Series 2006-6).**
|
4(m)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-2
(formerly Safety First
Trust Series 2006-7).**
|
4(n)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-3
(formerly Safety First
Trust Series 2006-8).**
|
4(o)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-4
(formerly Safety First
Trust Series 2006-9)
(formerly Safety First
Trust Series 2006-9).**
|
4(p)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-5
(formerly Safety First
Trust Series 2006-10).**
|
4(q)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-6.**
|
4(r)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-7.**
|
4(s)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-1.**
|
4(t)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-2.**
|
4(u)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-3.**
|
4(v)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-4.**
|
4(w)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-5.**
|
4(x)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-6.**
|
4(y)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-7.**
|
4(z)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-8.**
|
4(aa)
|
|
|
|
Form of Amended and Restated Declaration of Trust (incorporated
by reference to Exhibit 4(a) to the Registrants
Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(bb)
|
|
|
|
Form of the Trust Certificates Guarantee Agreement
(incorporated by reference to Exhibit 4(b) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(cc)
|
|
|
|
Form of the Trust Certificates (incorporated by reference
to Exhibit 4(c) to the Registrants Registration
Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(dd)
|
|
|
|
Form of Common Securities (incorporated by reference to
Exhibit 4(d) to the Registrants Registration
Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
5(a)
|
|
|
|
Opinion of Michael J. Tarpley, Esq. with respect to the
Certificate Guarantee.**
|
5(b)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2007-2.**
|
5(c)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2007-3.**
|
II-6
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
5(d)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2007-4.**
|
5(e)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-1.**
|
5(f)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-2.**
|
5(g)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-3.**
|
5(h)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-4.**
|
5(i)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-5.**
|
5(j)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-6.**
|
5(k)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-7.**
|
5(l)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-1.**
|
5(m)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-2.**
|
5(n)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-3.**
|
5(o)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-4.**
|
5(p)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-5.**
|
5(q)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-6.**
|
5(r)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-7.**
|
5(s)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-8.**
|
8
|
|
|
|
Opinion of Cleary Gottlieb Steen & Hamilton LLP as to
certain federal income tax matters.**
|
12(a)
|
|
|
|
Supplemental Calculation of Ratio of Income to Fixed Charges
(incorporated by reference to Exhibit 12.01 to
Citigroups Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2010
(No. 1-09924)).
|
12(b)
|
|
|
|
Supplemental Calculation of Ratio of Income to Combined Fixed
Charges Including Preferred Stock Dividends (incorporated by
reference to Exhibit 12.02 to Citigroups Quarterly
Report on
Form 10-Q
for the quarter ended September 30, 2010
(No. 1-09924)).
|
23(a)
|
|
|
|
Consent of KPMG LLP, Independent Registered Public Accounting
Firm.*
|
23(b)
|
|
|
|
Consent of Michael J. Tarpley, Esq. (included in
Exhibit 5(a)).**
|
23(c)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2007-2 (included in Exhibit 5(b)).**
|
23(d)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2007-3 (included in Exhibit 5(c)).**
|
23(e)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2007-4 (included in Exhibit 5(d)).**
|
23(f)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-1 (included in Exhibit 5(e)).**
|
23(g)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-2 (included in Exhibit 5(f)).**
|
23(h)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-3 (included in Exhibit 5(g)).**
|
23(i)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-4 (included in Exhibit 5(h)).**
|
23(j)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-5 (included in Exhibit 5(i)).**
|
23(k)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-6 (included in Exhibit 5(j)).**
|
II-7
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
23(l)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-7 (included in Exhibit 5(k)).**
|
23(m)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-1 (included in Exhibit 5(l)).**
|
23(n)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-2 (included in Exhibit 5(m)).**
|
23(o)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-3 (included in Exhibit 5(n)).**
|
23(p)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-4 (included in Exhibit 5(o)).**
|
23(q)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-5 (included in Exhibit 5(p)).**
|
23(r)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-6 (included in Exhibit 5(q)).**
|
23(s)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-7 (included in Exhibit 5(r)).**
|
23(t)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-8 (included in Exhibit 5(s)).**
|
23(u)
|
|
|
|
Consent of Cleary Gottlieb Steen & Hamilton LLP (included
in Exhibit 8).**
|
24(a)
|
|
|
|
Powers of Attorney of Citigroup Inc. Directors.*
|
|
|
|
|
|
25(a)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2007-2.**
|
25(b)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2007-3.**
|
25(c)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2007-4.**
|
25(d)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-1.**
|
25(e)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-2.**
|
25(f)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-3.**
|
25(g)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-4.**
|
25(h)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-5.**
|
II-8
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
25(i)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-6.**
|
25(j)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-7.**
|
25(k)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-1.**
|
25(l)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-2.**
|
25(m)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-3.**
|
25(n)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-4.**
|
25(o)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-5.**
|
25(p)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-6.**
|
25(q)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-7.**
|
25(r)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-8.**
|
25(s)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2007-2.**
|
25(t)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2007-3.**
|
25(u)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2007-4.**
|
25(v)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-1.**
|
25(w)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-2.**
|
II-9
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
25(x)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-3.**
|
25(y)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-4.**
|
25(z)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-5.**
|
25(aa)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-6.**
|
25(bb)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-7.**
|
25(cc)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-1.**
|
25(dd)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-2.**
|
25(ee)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-3.**
|
25(ff)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-4.**
|
25(gg)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-5.**
|
25(hh)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-6.**
|
25(ii)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-7.**
|
25(jj)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-8.**
|
II-10
Item 17.
Undertakings.
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate
offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however,
that paragraphs (i), (ii) and (iii)
above do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by Citigroup
Inc. pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that are
incorporated by reference in this registration statement, or is
contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of this registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, as amended, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act of 1933, as amended, to any purchaser:
(i) Each prospectus filed by a registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of this
registration statement as of the date the filed prospectus was
deemed part of and included in this registration statement; and
(ii) Each prospectus required to be filed pursuant to
rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the
purpose of providing the information required by
Section 10(a) of the Securities Act of 1933, as amended,
shall be deemed to be part of and included in this registration
statement as of the earlier of the date such form of prospectus
is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the securities in
the registration statement to which the prospectus relates, and
the offering of such securities at that time shall be deemed to
be the initial
bona fide
offering thereof.
Provided,
however,
that no statement made in a registration statement
or prospectus that is part of this registration statement or
made in a document incorporated or deemed incorporated by
reference into this registration statement or prospectus that is
part of this registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in this
registration statement or prospectus that was part of this
registration statement or made in any such document immediately
prior to such effective date.
II-11
(5) That, for the purpose of determining liability of the
Registrants under the Securities Act of 1933, as amended, to any
purchaser in the initial distribution of the securities, the
Registrants undertake that in a primary offering of securities
of the Registrants pursuant to this registration statement,
regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following
communications, the Registrants will be sellers to the purchaser
and will be considered to offer or sell such securities to such
purchaser:
(i) Any preliminary prospectus or prospectus of the
Registrants relating to the offering required to be filed
pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the Registrants or used or referred
to by the Registrants;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the Registrants or their securities provided by or on behalf of
the registrants; and
(iv) Any other communication that is an offer in the
offering made by the Registrants to the purchaser.
(6) That, for purposes of determining any liability under
the Securities Act of 1933, as amended, each filing of Citigroup
Inc.s annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934, as
amended, (and, where applicable, each filing of an employee
benefit plans annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934, as amended) that is
incorporated by reference in this registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial
bona fide
offering thereof.
(7) To file an application for the purpose of determining
the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Trust Indenture
Act.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to
directors, officers and controlling persons of the Registrants
pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrants of expenses incurred or paid
by a director, officer or controlling person of the Registrants
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrants
will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by them is against public policy as expressed in
the Securities Act of 1933, as amended, and will be governed by
the final adjudication of such issue.
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, each of Safety First
Trust Series 2007-2,
Safety First
Trust Series 2007-3,
Safety First
Trust Series 2007-4,
Safety First Trust
Series 2008-1,
Safety First Trust
Series 2008-2,
Safety First Trust
Series 2008-3,
Safety First Trust
Series 2008-4,
Safety First Trust
Series 2008-5,
Safety First Trust
Series 2008-6,
Safety First Trust
Series 2008-7,
Safety First Trust
Series 2009-1,
Safety First Trust
Series 2009-2,
Safety First Trust
Series 2009-3,
Safety First Trust
Series 2009-4,
Safety First Trust
Series 2009-5,
Safety First Trust
Series 2009-6,
Safety First Trust
Series 2009-7
and Safety First Trust
Series 2009-8
certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement or Amendment
thereto to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on
February 11, 2011.
SAFETY FIRST
TRUST SERIES 2007-2
(formerly SAFETY FIRST
TRUST SERIES 2006-3)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST
TRUST SERIES 2007-3
(formerly SAFETY FIRST
TRUST SERIES 2006-4)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
II-13
SAFETY FIRST
TRUST SERIES 2007-4
(formerly SAFETY FIRST
TRUST SERIES 2006-5)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST
TRUST SERIES 2008-1
(formerly SAFETY FIRST
TRUST SERIES 2006-6)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST
TRUST SERIES 2008-2
(formerly SAFETY FIRST
TRUST SERIES 2006-7)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
II-14
SAFETY FIRST
TRUST SERIES 2008-3
(formerly SAFETY FIRST
TRUST SERIES 2006-8)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST
TRUST SERIES 2008-4
(formerly SAFETY FIRST
TRUST SERIES 2006-9)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST
TRUST SERIES 2008-5
(formerly SAFETY FIRST
TRUST SERIES 2006-10)
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
II-15
SAFETY FIRST TRUST SERIES 2008-6
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST TRUST SERIES 2008-7
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST TRUST SERIES 2009-1
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
II-16
SAFETY FIRST TRUST SERIES 2009-2
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST TRUST SERIES 2009-3
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST TRUST SERIES 2009-4
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
II-17
SAFETY FIRST TRUST SERIES 2009-5
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST TRUST SERIES 2009-6
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
SAFETY FIRST TRUST SERIES 2009-7
Name: Stephen Gehrmann
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
II-18
SAFETY FIRST TRUST SERIES 2009-8
Name: Stephen Gehrman
Title: Regular Trustee
Name: James McFadden
Title: Regular Trustee
Name: Petrus Weel
Title: Regular Trustee
II-19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, Citigroup Inc. certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement or Amendment
thereto to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on
February 11, 2011.
CITIGROUP INC.
Name: John C. Gerspach
Title: Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement or Amendment thereto has
been signed below by the following persons in the capacities
indicated on February 11, 2011.
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|
|
|
|
Signatures
|
|
Title
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
/s/ Vikram
S. Pandit
Vikram
S. Pandit
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|
Chief Executive Officer and Director
(Principal Executive Officer)
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|
|
|
|
|
|
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|
|
|
|
|
|
/s/ John
C. Gerspach
John
C. Gerspach
|
|
Chief Financial Officer
(Principal Financial Officer)
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|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey
R. Walsh
Jeffrey
R. Walsh
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|
Controller and Chief Accounting Officer
(Principal Accounting Officer)
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|
|
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*
Alain
J.P. Belda
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|
Director
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|
|
|
|
|
|
|
|
*
Timothy
C. Collins
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|
Director
|
|
|
|
*
Jerry
A. Grundhofer
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Robert
L. Joss
|
|
Director
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|
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|
|
*
Andrew
N. Liveris
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|
Director
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|
*
Michael
E. ONeill
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|
Director
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|
*
Richard
D. Parsons
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|
Chairman of the Board
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II-20
|
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|
Signatures
|
|
Title
|
|
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|
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|
*
Lawrence
R. Ricciardi
|
|
Director
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|
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|
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|
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|
|
|
*
Judith
Rodin
|
|
Director
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|
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|
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|
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|
|
|
*
Robert
L. Ryan
|
|
Director
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|
*
Anthony
M. Santomero
|
|
Director
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|
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|
*
Diana
L. Taylor
|
|
Director
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|
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|
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|
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|
*
William
S. Thompson, Jr.
|
|
Director
|
|
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|
|
|
|
|
|
|
*
Ernesto
Zedillo
|
|
Director
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|
*By:
|
|
/s/
John
C. Gerspach
John
C. Gerspach
Attorney-in-Fact
|
|
|
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, Citigroup Funding Inc. certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form
S-3
and has
duly caused this Registration Statement, or Amendment thereto,
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on
February 11, 2011.
CITIGROUP FUNDING INC.
Name: Eric W. Aboaf
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|
|
|
Title:
|
President and Chairman
|
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement, or Amendment thereto, has
been signed below by the following persons in the capacities
indicated on February 11, 2011.
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/
Eric
W. Aboaf
Eric
W. Aboaf
|
|
President and Chairman
(Principal Executive Officer)
|
|
|
|
/s/
Srini
Vasan
Srini
Vasan
|
|
Executive Vice President and Chief Financial Officer(Principal
Financial Officer)
|
|
|
|
/s/
Michael
P. Conway
Michael
P. Conway
|
|
Vice President and Controller
(Principal Accounting Officer)
|
|
|
|
/s/
James M.
Garnett
James M.
Garnett
|
|
Director
|
|
|
|
/s/
Saul M.
Rosen
Saul M.
Rosen
|
|
Director
|
|
|
|
/s/
Jeffrey
R. Walsh
Jeffrey
R. Walsh
|
|
Director
|
II-22
EXHIBIT
INDEX
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
1(a)
|
|
|
|
Underwriting Agreement Basic Provisions for the offering of the
Principal-Protected Trust Certificates being registered under
this Registration Statement.**
|
4(a)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2007-2
(formerly Safety First Trust
Series 2006-3)
(incorporated by reference to Exhibit 3(l) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(b)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2007-3
(formerly Safety First Trust
Series 2006-4)
(incorporated by reference to Exhibit 3(m) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(c)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2007-4
(formerly Safety First Trust
Series 2006-5)
(incorporated by reference to Exhibit 3(n) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(d)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-1
(formerly Safety First Trust
Series 2006-6)
(incorporated by reference to Exhibit 3(o) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(e)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-2
(formerly Safety First Trust
Series 2006-7)
(incorporated by reference to Exhibit 3(p) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(f)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-3
(formerly Safety First Trust
Series 2006-8)
(incorporated by reference to Exhibit 3(q) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(g)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-4
(formerly Safety First Trust
Series 2006-9)
(incorporated by reference to Exhibit 3(r) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(h)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-5
(formerly Safety First Trust
Series 2006-10)
(incorporated by reference to Exhibit 3(s) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(i)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2007-2
(formerly Safety First
Trust Series 2006-3).**
|
4(j)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2007-3
(formerly Safety First
Trust Series 2006-4).**
|
4(k)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2007-4
(formerly Safety First
Trust Series 2006-5).**
|
4(l)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-1
(formerly Safety First
Trust Series 2006-6).**
|
4(m)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-2
(formerly Safety First
Trust Series 2006-7).**
|
4(n)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-3
(formerly Safety First
Trust Series 2006-8).**
|
4(o)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-4
(formerly Safety First
Trust Series 2006-9)
(formerly Safety First
Trust Series 2006-9).**
|
4(p)
|
|
|
|
Certificate of Amendment to Certificate of Trust of Safety First
Trust Series 2008-5
(formerly Safety First
Trust Series 2006-10).**
|
4(q)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-6.**
|
4(r)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2008-7.**
|
4(s)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-1.**
|
4(t)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-2.**
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
4(u)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-3.**
|
4(v)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-4.**
|
4(w)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-5.**
|
4(x)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-6.**
|
4(y)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-7.**
|
4(z)
|
|
|
|
Certificate of Trust of Safety First
Trust Series 2009-8.**
|
4(aa)
|
|
|
|
Form of Amended and Restated Declaration of Trust (incorporated
by reference to Exhibit 4(a) to the Registrants
Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(bb)
|
|
|
|
Form of the Trust Certificates Guarantee Agreement
(incorporated by reference to Exhibit 4(b) to the
Registrants Registration Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(cc)
|
|
|
|
Form of the Trust Certificates (incorporated by reference
to Exhibit 4(c) to the Registrants Registration
Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
4(dd)
|
|
|
|
Form of Common Securities (incorporated by reference to
Exhibit 4(d) to the Registrants Registration
Statement on
Form S-3
filed on July 19, 2006
(No. 333-135867)).
|
5(a)
|
|
|
|
Opinion of Michael J. Tarpley, Esq. with respect to the
Certificate Guarantee.**
|
5(b)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2007-2.**
|
5(c)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2007-3.**
|
5(d)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2007-4.**
|
5(e)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-1.**
|
5(f)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-2.**
|
5(g)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-3.**
|
5(h)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-4.**
|
5(i)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-5.**
|
5(j)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-6.**
|
5(k)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2008-7.**
|
5(l)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-1.**
|
5(m)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-2.**
|
5(n)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-3.**
|
5(o)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-4.**
|
5(p)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-5.**
|
5(q)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-6.**
|
5(r)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-7.**
|
5(s)
|
|
|
|
Opinion of Dorsey & Whitney LLP with respect to Safety
First
Trust Series 2009-8.**
|
8
|
|
|
|
Opinion of Cleary Gottlieb Steen & Hamilton LLP as to
certain federal income tax matters.**
|
12(a)
|
|
|
|
Supplemental Calculation of Ratio of Income to Fixed Charges
(incorporated by reference to Exhibit 12.01 to
Citigroups Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2010
(No. 1-09924)).
|
12(b)
|
|
|
|
Supplemental Calculation of Ratio of Income to Combined Fixed
Charges Including Preferred Stock Dividends (incorporated by
reference to Exhibit 12.02 to Citigroups Quarterly
Report on
Form 10-Q
for the quarter ended September 30, 2010
(No. 1-09924)).
|
23(a)
|
|
|
|
Consent of KPMG LLP, Independent Registered Public Accounting
Firm.*
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
23(b)
|
|
|
|
Consent of Michael J. Tarpley, Esq. (included in
Exhibit 5(a)).**
|
23(c)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2007-2 (included in Exhibit 5(b)).**
|
23(d)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2007-3 (included in Exhibit 5(c)).**
|
23(e)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2007-4 (included in Exhibit 5(d)).**
|
23(f)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-1 (included in Exhibit 5(e)).**
|
23(g)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-2 (included in Exhibit 5(f)).**
|
23(h)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-3 (included in Exhibit 5(g)).**
|
23(i)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-4 (included in Exhibit 5(h)).**
|
23(j)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-5 (included in Exhibit 5(i)).**
|
23(k)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-6 (included in Exhibit 5(j)).**
|
23(l)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2008-7 (included in Exhibit 5(k)).**
|
23(m)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-1 (included in Exhibit 5(l)).**
|
23(n)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-2 (included in Exhibit 5(m)).**
|
23(o)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-3 (included in Exhibit 5(n)).**
|
23(p)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-4 (included in Exhibit 5(o)).**
|
23(q)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-5 (included in Exhibit 5(p)).**
|
23(r)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-6 (included in Exhibit 5(q)).**
|
23(s)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-7 (included in Exhibit 5(r)).**
|
23(t)
|
|
|
|
Consent of Dorsey & Whitney LLP with respect to Safety
First Trust Series 2009-8 (included in Exhibit 5(s)).**
|
23(u)
|
|
|
|
Consent of Cleary Gottlieb Steen & Hamilton LLP (included
in Exhibit 8).**
|
24(a)
|
|
|
|
Powers of Attorney of Citigroup Inc. Directors.*
|
|
|
|
|
|
25(a)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2007-2.**
|
25(b)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2007-3.**
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
|
|
Description
|
|
25(c)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2007-4.**
|
25(d)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-1.**
|
25(e)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-2.**
|
25(f)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-3.**
|
25(g)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-4.**
|
25(h)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-5.**
|
25(i)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-6.**
|
25(j)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2008-7.**
|
25(k)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-1.**
|
25(l)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-2.**
|
25(m)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-3.**
|
25(n)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-4.**
|
25(o)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-5.**
|
25(p)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-6.**
|
25(q)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-7.**
|
25(r)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the amended and restated declaration of trust of Safety First
Trust Series 2009-8.**
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Exhibit
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Number
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Description
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25(s)
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2007-2.**
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25(t)
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2007-3.**
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25(u)
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2007-4.**
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25(v)
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-1.**
|
25(w)
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-2.**
|
25(x)
|
|
|
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-3.**
|
25(y)
|
|
|
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-4.**
|
25(z)
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|
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-5.**
|
25(aa)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-6.**
|
25(bb)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2008-7.**
|
25(cc)
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Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-1.**
|
25(dd)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-2.**
|
25(ee)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-3.**
|
25(ff)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-4.**
|
25(gg)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-5.**
|
25(hh)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-6.**
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Exhibit
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|
|
|
|
Number
|
|
|
|
Description
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25(ii)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-7.**
|
25(jj)
|
|
|
|
Form T-1,
Statement of Eligibility Under the Trust Indenture Act of
1939, as amended, of U.S. Bank National Association, under
the Principal Protected Trust Certificates Guarantee
Agreement with respect to Safety First
Trust Series 2009-8.**
|
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