Citigroup Inc. Announces Offers to Purchase up to $500 Million Amount of Notes
February 14, 2013 3:00 AM ET
Citigroup Inc. (the “Company”) announces that it is inviting eligible holders (the “Noteholders”) of its notes denominated in British pounds sterling (the “Sterling Notes”) and its notes denominated in Euros (the “Euro Notes”, and together with the Sterling Notes, the “Notes” and each a “Series”) to tender their Notes for purchase by the Company for cash (each such invitation, an “Offer”, and together, the “Offers”).
The Offers are made on the terms and subject to the conditions contained in the tender offer memorandum dated 14 February 2013 (the “Tender Offer Memorandum”, as may be amended from time to time) prepared by the Company in connection with the Offers, and are subject to the offer and distribution restrictions set out below and as more fully described in the Tender Offer Memorandum. Capitalised terms used but not otherwise defined in this announcement shall have the meanings given to them in the Tender Offer Memorandum.
Notes tendered and accepted pursuant to the Offers reflect the Company’s continued robust liquidity position and are consistent with its recent liability management initiatives. In 2012, the Company decreased its outstanding long-term debt by approximately $17 billion through liability management initiatives, including the previously announced redemptions of trust preferred securities. Coupled with the ongoing natural maturing of long-term debt that requires no refinancing, these initiatives result in lower borrowing costs and reduce the overall level of the Company’s long-term debt outstanding. The Company will continue to consider opportunities to repurchase its long-term as well as short-term debt based on several factors, including without limitation the economic value, potential impact on the Company’s net interest margin and borrowing costs and the overall remaining tenor of its debt portfolio.
|Title of Notes||ISIN|
|Maximum Purchase Spread|
Up to $500,000,000 U.S.-dollar-equivalent nominal amount, subject to the right of the Company to amend such amount.
|£750,000,000 7.625% Fixed Rate Notes due 2018||XS0355738799||£497,615,000||5.00% U.K. Treasury Gilt due March 2018||155 bps||To be determined as set out in this Tender Offer Memorandum by reference to the relevant Clearing Spread determined pursuant to a modified Dutch auction.|
|£400,000,000 6.5% Senior Notes due 2030||XS0116066449||£251,565,000||4.75% U.K. Treasury Gilt due December 2030||140 bps|
|£800,000,000 6.8% Senior Notes due 2038||XS0372391945||£535,073,000||4.75% U.K. Treasury Gilt due December 2038||145 bps|
|€1,500,000,000 7.375% Fixed Rate Notes due 2014||XS0433943718||€902,490,000||Interpolated Euro Mid-Swap Rate||10 bps|
The Company proposes to accept for purchase pursuant to the Offers up to $500,000,000, in aggregate U.S.-dollar-equivalent nominal amount of the Notes validly tendered for purchase pursuant to the Offers (the “Maximum Acceptance Amount”), subject to the right of the Company, in its sole discretion, to accept less than or more than the Maximum Acceptance Amount for purchase pursuant to the Offers. The Company will determine the allocation of funds between each Series in its sole discretion and reserves the right to accept for purchase significantly more or less (or none) of the Notes of any one Series as compared to the other Series.
The Company will pay for each Series of Sterling Notes and Euro Notes validly tendered and accepted by it for purchase pursuant to the Sterling Offer and the Euro Offer, a cash purchase price (for each Series of Sterling Notes, a “Sterling Purchase Price”, for each Series of Euro Notes, a “Euro Purchase Price”, and each a “Purchase Price”) expressed as a percentage of the principal amount thereof and determined by reference to the sum of the relevant purchase spread as determined pursuant to the Modified Dutch Auction Procedure (each, a “Clearing Spread”), and the relevant Benchmark Security Rate in the case of the Sterling Notes or the Interpolated Euro Mid-Swap Rate in the case of the Euro Notes.
The final determination of the Purchase Price in respect of each Series of the Notes will be determined in accordance with standard market convention, at or around 2:00 p.m. (London time) on the Business Day following the Expiration Deadline (the “Pricing Time”). The Company will also pay an Accrued Interest Payment in respect of Notes accepted for purchase pursuant to the Offers, all as further described in the Tender Offer Memorandum.
The anticipated transaction timetable is summarised below:
|Events||Times and Dates|
|Commencement of the Offers|
|Offers announced. Tender Offer Memorandum available from the Dealer Manager and the Tender Agent.||14 February 2013|
|Final deadline for receipt of valid Tender Instructions by the Tender Agent in order for Noteholders to be able to participate in the Offers.||4:00 p.m. (London time) on 20 February 2013|
|Announcement of Clearing Spreads and Indicative Tender Results|
|Announcement by the Company of the Clearing Spread with respect to each Series of Sterling Notes and Euro Notes it intends to accept for purchase, and the indicative Series Acceptance Amount and any indicative Scaling Factor in respect of each Series of Notes it intends to accept for purchase.||At or around 10:00 a.m. (London time) on 21 February 2013|
|Determination of the relevant Benchmark Security Rate or the Interpolated Euro Mid-Swap Rate (as applicable) and calculation of the relevant Purchase Price for each Series of the Notes the Company intends to accept for purchase.||At or around 2:00 p.m. (London time) on 21 February 2013|
|Announcement of Purchase Prices and Final Tender Results|
|Announcement of whether the Company will accept valid tenders of Notes pursuant to each Offer and, if so accepted, (i) the Series Acceptance Amount, (ii) the Interpolated Euro Mid-Swap Rate or the relevant Benchmark Security Rate (as applicable) and (iii) the Purchase Yield and Purchase Price for each Series of Notes accepted for purchase.||As soon as reasonably practicable after the Pricing Time.|
|Expected Settlement Date|
|Expected settlement date for the Offers.||28 February 2013|
This is an indicative timetable and may be subject to change. Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary needs to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offers by the deadlines set out above. Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on, the procedures for participating in, the Offers.
The obligation of Citigroup Inc. to accept for purchase, and to pay the Purchase Price for Notes validly tendered pursuant to the Offers is subject to, and conditional upon, the satisfaction or, where applicable, waiver of a number of conditions described in the Tender Offer Memorandum. Citigroup Inc. reserves the right, in its sole discretion, to waive any one or more of the conditions at any time. The Offers are not contingent upon the tender of any minimum nominal amount of Notes.
Citigroup Inc. has retained its affiliate Citigroup Global Markets Limited to serve as the Dealer Manager, and its affiliate Citibank, N.A., London Branch has been retained to serve as Tender Agent for the Offers.
For additional information regarding the terms of the Offers, please contact: Citigroup Global Markets Limited at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, Attention: Liability Management Group, or by telephone at +44 20 7986 8969 or email firstname.lastname@example.org.
Requests for documents and questions regarding the tender of Notes may be directed to Citibank, N.A., London Branch at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, Attention: Exchange Team, or by telephone at +44 20 7508 3867 or email email@example.com.
This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offers. If any Noteholder is in any doubt as to the action it should take, it is recommended to seek its own financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender Notes in the Offers. None of Citigroup Inc., the Dealer Manager or the Tender Agent nor any of their respective directors, employees or affiliates makes any recommendation whether Noteholders should tender Notes in the Offers.
OFFER AND DISTRIBUTION RESTRICTIONS
Neither this announcement nor the Tender Offer Memorandum constitutes an invitation to participate in the Offers in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by each of the Company, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions.
The Offers are not being made, and will not be made, directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States and the Notes cannot be tendered in the Offers by any such use, means, instrumentality or facility or from within the United States or by any persons located or resident in the United States. Eligibility to participate in the Offer is not dependent on whether the Noteholder is a “U.S. person” as defined for purposes of Regulation S under the U.S. Securities Act of 1933, as amended. Any purported tender of Notes resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by any person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.
Each Noteholder participating in an Offer will represent that it is not located in the United States and is not participating in such Offer from the United States or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such Offer from the United States. For the purposes of this and the above paragraph, “United States” means United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.
The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to persons in the United Kingdom who are Investment Professionals (as defined in Article 19(5) of the Financial Services and Markets 2000 (Financial Promotion) Order 2005 (the “Financial Promotion Order”)) or within Article 43 of the Financial Promotion Order, or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (such persons together being the “Relevant Persons”).
Insofar as the communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers is made to or directed at Relevant Persons, it is made to or directed at persons having professional experience in matters relating to investments, and any investment or investment activity to which it relates is available only to such persons or will be engaged in only with such persons, and persons who do not have professional experience in matters relating to investments should not rely upon it.
Neither this Tender Offer Memorandum nor any other documents or materials relating to the Offers have been submitted to or will be submitted for approval or recognition to the Belgian Financial Services and Markets Authority (“Commission bancaire, financière et des assurances/Commissie voor het Bank, Financie- en Assurantiewezen”) and, accordingly, the Offers may not be made in Belgium by way of a public offering, as defined in Article 6 of the Belgian Law of 1 April 2007 on public takeover bids (“loi relative aux offres publiques d’acquisition/wet op de openbare overnamebiedingen”) (as amended from time to time). Accordingly, the Offers are exclusively conducted under private placement exceptions and the Offers may not be advertised and the Offers will not be extended, and neither this Tender Offer Memorandum nor any other documents or materials relating to the Offers (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than “qualified investors” (“investisseur qualifié/gekwalificeerde belegger”) in the meaning of Article 10 of the Belgian Law of 16 June 2006 on public offering of securities and admission to trading of securities on regulated markets (“loi relative aux offres publiques d'instruments de placement et aux admissions d'instruments de placement à la négociation sur des marchés réglementés/wet op de openbare aanbieding van beleggingsinstrumenten en de toelating van beleggingsinstrumenten tot de verhandeling op een gereglementeerde markt”) (as amended from time to time), acting on their own account. Insofar as Belgium is concerned, this Tender Offer Memorandum has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offers. Accordingly, the information contained in this Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.
The Offers are not being made, directly or indirectly, to the public in France. Neither this Tender Offer Memorandum nor any other documents or offering materials relating to the Offers have been distributed or caused to be distributed and will not be distributed or caused to be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d’investissement de gestion de portefeuille pour compte de tiers), (ii) qualified investors (investisseurs qualifiés), other than individuals, acting for their own account, all as defined in, and in accordance with, Articles L.411-2 and D.411-1 of the French Code monétaire et financier and/or (iii) the other legal entities referred to in Articles L.341-2 1° and D.341-1 of the French Code monétaire et financier, are eligible to participate in the Offer. This Tender Offer Memorandum has not been and will not be submitted to the clearance procedures (visa) of nor approved by the Autorité des marchés financiers.
None of the Offers, this Tender Offer Memorandum or any other document or materials relating to the Offers have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (the “CONSOB”) pursuant to Italian laws and regulations. The Offers are being carried out in Italy as exempted offers pursuant to article 101-bis, paragraph 3-bis of Legislative Decree No. 58 of 24 February 1998, as amended (the “ConsolidatedFinancial Act”) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. .Holders or beneficial owners of the Notes that are resident or located in Italy can tender Notes for purchase through authorized persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Consolidated Financial Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with any other applicable laws and regulations and with any requirements imposed by CONSOB or any other Italian authority.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Additional information may be found at www.citigroup.com.
Certain statements in this release, including without limitation the anticipated consummation and successful completion of the Offers (including the satisfaction of the conditions described in the Tender Offer Memorandum), the possible amendment, extension or abandonment of one or more of the Offers, and Citigroup Inc.’s successful execution of its liability management strategy, are “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission. These statements are based on management’s 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 (i) the level of participation in the Offers, and (ii) the precautionary statements included in this release and in the Tender Offer Memorandum, and those contained in Citigroup Inc.’s filings with the U.S. Securities and Exchange Commission, including without limitation the “Risk Factors” section of Citigroup Inc.’s 2011 Annual Report on Form 10-K.
Jeffrey French, +44 207 500 8304
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