Citigroup Inc. Announces Cash Tender Offers and Consent Solicitation

NEW YORK--()--Citigroup Inc. (“Citigroup”) today announced the commencement of its offers to purchase for cash (i) any and all of the $950,000,000 current outstanding principal amount of 6.950% Notes due 2018 (the “2018 Notes”) issued by Citigroup’s wholly owned subsidiary, Associates First Capital Corporation (formerly known as Associates Corporation of North America) (“AFCC”), and (ii) up to U.S. $1,000,000,0000 aggregate principal amount (the “Maximum Tender Cap”) of Citigroup’s current outstanding U.S. $1,660,000,000 5.375% Notes due 2020 (the “2020 Notes,” together with the 2018 Notes, the “Notes”). The offers to purchase the Notes are referred to as the “Offers.Concurrently with the Offers, Citigroup announced its solicitation of consents from holders of the 2018 Notes to adopt certain amendments to the indenture governing the 2018 Notes. The solicitation of consents is referred to as the “Solicitation.”

The Offers and Solicitation are consistent with Citigroup’s liability management strategy, and reflect its ongoing efforts to enhance the efficiency of its funding and capital structure. Since 2013, Citigroup redeemed or retired U.S. $29.3 billion of securities, excluding exchanged securities, of which U.S. $7.2 billion was redeemed or retired in 2015, reducing Citigroup’s overall funding costs. Citigroup will continue to consider opportunities to redeem or repurchase securities, based on several factors, including without limitation, the economic value, potential impact on Citigroup’s net interest margin and borrowing costs, the overall remaining tenor of Citigroup’s debt portfolio, capital impact, as well as overall market conditions.

Title of Security     CUSIP / ISIN     Principal Amount Outstanding     Maximum Tender Cap     Reference U.S. Treasury Security     Bloomberg Reference page     Fixed Spread (basis points)
 
6.950% Notes due 2018 issued by AFCC 046003JU4 / US046003JU47 $950,000,000 N/A 0.875% Treasury due October 15, 2018 FIT1 +75 bps
 
5.375% Notes due 2020 issued by Citigroup 172967FF3 / US172967FF30 $1,660,000,000 $1,000,000,000 1.375% Treasury due September 30, 2020 FIT1 +90 bps
 

The Offers are being made pursuant to the offer to purchase and consent solicitation statement dated October 28, 2015 (the “Offer to Purchase and Consent Solicitation Statement,” as may be amended or supplemented from time to time), and the related consent and letter of transmittal (the “Consent and Letter of Transmittal,” as may be amended or supplemented from time to time) which set forth in more detail the terms and conditions of the Offers and Solicitation.

The Offers will expire at 11:59 p.m., New York City time, on November 25, 2015, unless extended or earlier terminated (such date and time, as the same may be extended, the “Expiration Date”). Subject to the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement and the Consent and Letter of Transmittal, Holders of Notes that are validly tendered and consents validly delivered on or prior to 5:00 p.m., New York City time, on November 10, 2015, unless extended (such date and time, as the same may be extended, the “Early Tender Date”) and accepted for purchase shall be entitled to receive the total consideration calculated in the manner set forth in the Offer to Purchase and Consent Solicitation Statement (the “Total Consideration”), which includes an early tender premium in the amount indicated in the table above (the “Early Tender Premium”). The Total Consideration with respect to (i) the 2018 Notes will be equal to the price, determined in accordance with standard market practice, as described in the Offer to Purchase and Consent Solicitation Statement, that equates to a yield to maturity equal to the fixed spread of 75 basis points over the yield, which shall be based on the bid-side price of the 0.875% U.S. Treasury Note due October 15, 2018, at 2:00 p.m., New York City time, on November 12, 2015 (subject to certain exceptions set forth in the Offer to Purchase and Consent Solicitation Statement, such time and date, as the same may be extended, the “Price Determination Date”) and (ii) the 2020 Notes will be equal to the price, determined in accordance with standard market practice, as described in the Offer to Purchase and Consent Solicitation Statement, that equates to a yield to maturity equal to the fixed spread of 90 basis points over the yield, which shall be based on the bid-side price of the 1.375% U.S. Treasury Note due September 30, 2020, on the Price Determination Date.

Subject to the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement, Holders of Notes that are validly tendered and consents validly delivered after the Early Tender Date but on or before the Expiration Date and accepted for purchase will receive only the tender offer consideration, which is equal to the Total Consideration minus the Early Tender Premium (the “Tender Offer Consideration”).

Notes tendered may be withdrawn and consents may be revoked at any time prior to the earlier of 5:00 p.m., New York City time, on November 10, 2015, unless extended (such date and time, as the same may be extended, the “Withdrawal Date”), but not thereafter.

Subject to the terms and conditions of the Offers, Citigroup is offering to purchase the aggregate principal amount of 2020 Notes up to the Maximum Tender Cap set forth in the table above. If the aggregate principal amount of 2020 Notes validly tendered in the Offer exceeds the Maximum Tender Cap, then, subject to the terms and conditions of the Offer, Citigroup will accept tendered 2020 Notes on a pro rata basis as described in the Offer to Purchase and Consent Solicitation Statement.

Payment for Notes validly tendered at or prior to the Early Tender Date and not validly withdrawn at or prior to the Withdrawal Date, and accepted by Citigroup for purchase in the Offers, will be after the Early Tender Date but prior to the Expiration Date (the “Early Settlement Date”), expected to be November 16, 2015. Payment for Notes validly tendered after the Early Tender Date, but at or prior to the Expiration Date, and accepted by Citigroup for purchase in the Offers, will be promptly after the Expiration Time (the “Final Settlement Date”), expected to be December 1, 2015. Payment for purchased Notes will include accrued and unpaid interest from, and including, the last interest payment date for the applicable series of Notes up to, but not including the Early Settlement Date or Final Settlement Date, as applicable.

Subject to applicable law, Citigroup may increase the Maximum Tender Cap for the 2020 Notes at any time prior to the Final Settlement Date.

The obligation of Citigroup to accept for purchase, and to pay 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 Offer to Purchase and Consent Solicitation Statement. Citigroup reserves the right, in its sole discretion, to waive any one or more of the conditions at any time.

The consents are being solicited to eliminate substantially all of the restrictive covenants contained in the indenture governing the 2018 Notes. Holders may not tender their 2018 Notes without delivering consents or deliver consents without tendering their 2018 Notes.

Citigroup has retained its affiliate Citigroup Global Markets Inc. to serve as the sole dealer manager and solicitation agent for the Offers and Solicitation. Global Bondholder Services Corporation has been retained to serve as the depositary and information agent with respect to the Notes.

For additional information regarding the terms of the Offers and Solicitation, please contact Citigroup Global Markets Inc. at either (800) 558-3745 (toll free) or (212) 723-6106. Requests for copies of the Offer to Purchase and Consent Solicitation Statement and Consent and Letter of Transmittal and questions regarding the tender of Notes or delivery of consents may be directed to Global Bondholder Services Corporation at (866) 807- 2200 (toll free) or (212) 430-3774 (collect).

None of Citigroup or AFCC or their respective boards of directors, the dealer manager and solicitation agent, the depositary or the information agent makes any recommendation as to whether any holder of the Notes should tender or refrain from tendering all or any portion of the principal amount of the Notes or should consent to the proposed indenture amendments.

This press release is neither an offer to purchase, a solicitation to buy nor a solicitation of consents with respect to any of these Notes nor is it a solicitation for acceptance of the Offers. Citigroup is making the Offers and Solicitation only by, and pursuant to the terms of, the Offer to Purchase and Consent Solicitation Statement and the related Consent and Letter of Transmittal. The Offers are not being made to (nor will tenders of Notes be accepted from or on behalf of) holders of Notes nor is any solicitation of consents being made in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This announcement must be read in conjunction with the Offer to Purchase and Consent Solicitation Statement and, where applicable, the related Consent and Letter of Transmittal.

United Kingdom. The communication of the Offer to Purchase and Consent Solicitation Statement and any other documents or materials relating to the Offer and Solicitation is not being made and such documents and/or materials have not been approved by an authorized 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 those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or within Article 43(2) of the Order, or to other persons to whom it may lawfully be communicated in accordance with the Order.

Citigroup, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citigroup 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, transaction services, 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 Offer (including the satisfaction of the conditions described in the Offer to Purchase), the possible amendment, extension or abandonment of the Offer, and Citigroup’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 Offer and Solicitation, and (ii) the precautionary statements included in this release and those contained in Citigroup’s filings with the U.S. Securities and Exchange Commission, including without limitation the “Risk Factors” section of Citigroup’s 2014 Annual Report on Form 10-K.

Contacts

Citigroup Inc.
Media:
Mark Costiglio, 212-559-4114
or
Investors:
Susan Kendall, 212-559-2718
or
Fixed Income Investors:
Peter Kapp, 212-559-5091

Contacts

Citigroup Inc.
Media:
Mark Costiglio, 212-559-4114
or
Investors:
Susan Kendall, 212-559-2718
or
Fixed Income Investors:
Peter Kapp, 212-559-5091