TERMS AGREEMENT
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February
9, 2007
|
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
| Attention: |
Assistant
Treasurer
|
Ladies
and Gentlemen:
We
understand that Citigroup Inc., a Delaware corporation (the “Company”), proposes
to issue and sell US$750,000,000 aggregate principal amount of its subordinated
debt securities (the “Securities”). Subject to the terms and conditions set
forth herein or incorporated by reference herein, we, Citigroup Global Markets
Inc., Bear, Xxxxxxx & Co. Inc., Deutsche Bank Securities Inc., Xxxxxxx,
Sachs & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated, Banc
of America Securities LLC, Credit Suisse Securities (USA) LLC, Xxxxxx Brothers
Inc., Loop Capital Markets, LLC, UBS Securities LLC, and The Xxxxxxxx Capital
Group, L.P., as underwriters (the “Underwriters”), offer to purchase, severally
and not jointly, the principal amount of the Securities set forth opposite
our
respective names on the list attached as Annex A hereto at 99.817% of the
principal amount thereof, plus accrued interest, if any, from and including
December 11, 2006 but excluding February 16, 2007. The Securities form a part
of
the same series as the Company’s outstanding Subordinated Floating Rate Notes
due 2016, issued on June 9, 2006. The
Closing Date shall be February 16, 2007, at 8:30 A.M. The closing shall take
place at the Corporate Law offices of the Company located at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
The
Securities shall have the following terms:
|
Title:
|
Subordinated
Floating Rate Notes Due 2016
|
|
Maturity:
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June
9, 2016
|
|
Interest
Rate:
|
Three-month
LIBOR (Telerate) plus 0.27% determined as set forth in the Prospectus
dated March 2, 2006 and the Prospectus Supplement dated February
9,
2007
|
|
Interest
Payment Dates:
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Quarterly
on the 9th
day of each March, June, September and December commencing March
9,
2007
|
|
Initial
Price to Public:
|
100.217%
of the principal amount thereof, plus accrued interest from December
11,
2006
|
1
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Redemption
Provisions:
|
The
Securities are not redeemable by the Company prior to Maturity, except
upon the occurrence of certain events involving United States taxation,
as
set forth in the Prospectus dated March 2, 2006
|
|
Record
Date:
|
The
business day immediately preceding each Interest Payment
Date
|
Additional
Terms:
The
Securities shall be issuable as Registered Securities only. The Securities
will
be initially represented by one or more global Securities registered in the
name
of The Depository Trust Company (“DTC”) or its nominees, as described in the
Prospectus relating to the Securities. Beneficial interests in the Securities
will be shown on, and transfers thereof will be effected only through, records
maintained by DTC, Euroclear Bank S.A./N.V., as operator of the Euroclear
System, and Clearstream International and their respective participants. Owners
of beneficial interests in the Securities will be entitled to physical delivery
of Securities in certificated form only under the limited circumstances
described in the Prospectus. Principal and interest on the Securities shall
be
payable in United States dollars. The relevant provisions of Article Eleven
of
the Indenture relating to defeasance shall apply to the Securities.
All
the
provisions contained in the document entitled “Citigroup Inc.— Debt Securities —
Underwriting Agreement — Basic Provisions” and dated March 2, 2006 (the “Basic
Provisions”), a copy of which you have previously received, are herein
incorporated by reference in their entirety and shall be deemed to be a part
of
this Terms Agreement to the same extent as if the Basic Provisions had been
set
forth in full herein. Terms defined in the Basic Provisions are used herein
as
therein defined.
The
Company agrees to use its best efforts to have the Securities approved for
listing on the Luxembourg Stock Exchange and to maintain such listing so long
as
any of the Securities are outstanding, provided, however that:
(a) if
it is
impracticable or unduly burdensome, in the good faith determination of the
Company, to maintain such listing due to changes in listing requirements
occurring after the date of the Prospectus Supplement, or
(b) if
the
Transparency Directive (as defined in the Prospectus Supplement) is implemented
in Luxembourg in a manner that would require the Company to publish financial
information according to accounting principles or standards that are materially
different from United States generally accepted accounting principles,
the
Company may de-list the Securities from the Luxembourg Stock Exchange and shall
use its reasonable best efforts to obtain an alternative admission to listing,
trading and/or quotation of the Securities by another listing authority,
exchange or system within or outside the European Union as it may decide. If
such an alternative admission is not available or is, in the Company’s opinion,
unduly burdensome, such an alternative admission will not be obtained, and
the
Company shall have no further obligation in respect of any listing, trading
or
quotation for the Securities.
2
The
Underwriters hereby agree in connection with the underwriting of the Securities
to comply with the requirements set forth in any applicable sections of Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc.
Each
Underwriter further agrees and hereby represents that:
(a) it
has
only communicated or caused to be communicated and it will only communicate
or
cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets
Xxx 0000 (the “FSMA”) received by it in connection with the issue or sale of the
Securities in circumstances in which Section 21(1) of the FSMA does not apply
to
the Company;
(b) it
has
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom;
(c) it
will
not offer or sell any Securities directly or indirectly in Japan or to, or
for
the benefit of, any Japanese person or to others, for re-offering or re-sale
directly or indirectly in Japan or to any Japanese person except under
circumstances which will result in compliance with all applicable laws,
regulations and guidelines promulgated by the relevant governmental and
regulatory authorities in effect at the relevant time. For purposes of this
paragraph, “Japanese person” means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan;
(d) it
is
aware of the fact that no securities prospectus (Wertpapierprospekt)
under
the German Securities Prospectus Act (Wertpapierprospektgesetz, the
“Prospectus Act”) has been or will be published in respect of the Securities in
the Federal Republic of Germany and that it will comply with the Prospectus
Act
and all other laws and regulations applicable in the Federal Republic of Germany
governing the issue, offering and sale of the Securities;
(e) no
Securities have been offered or sold and will be offered or sold, directly
or
indirectly, to the public in France except to qualified investors (investisseurs
qualifiés)
and/or
to a limited circle of investors (cercle
restreint d’investisseurs)
acting
for their own account as defined in article L. 411-2 of the French Code
Monétaire et
Financier
and
applicable regulations thereunder; and that the direct or indirect resale to
the
public in France of any Securities acquired by any qualified investors
(investisseurs
qualifiés)
and/or
any investors belonging to a limited circle of investors (cercle
restreint d’investisseurs)
may be
made only as provided by articles L. 412-1 and L. 621-8 of the French
Code
Monétaire et
Financier
and
applicable regulations thereunder; and that none of the Prospectus Supplement,
the Prospectus or any other offering materials relating to the Securities has
been released, issued or distributed to the public in France except to qualified
investors (investisseurs
qualifiés)
and/or
to a limited circle of investors (cercle
restreint d’investisseurs)
mentioned above; and
(f) it
and
each of its affiliates has not offered or sold, and it will not offer or sell,
the Securities by means of any document to persons in Hong Kong other than
persons whose ordinary business it is to buy or sell shares or debentures,
whether as principal or agent, or otherwise in circumstances which do not
constitute an offer to the public within the meaning of the Hong Kong Companies
Ordinance (Chapter 32 of the Laws of Hong Kong), and unless permitted to do
so
under the securities laws of Hong Kong, no person has issued or had in its
possession for the purposes of issue, and will not issue or have in its
possession for the purpose of issue, any advertisement, document or invitation
relating to the Securities other than with respect to the Securities to be
disposed of to persons outside Hong Kong or only to persons whose business
involves the acquisition, disposal or holding of securities, whether as
principal or agent.
3
In
addition to the legal opinions required by Sections 6(b) and 6(c) of the Basic
Provisions, the Underwriters shall have received an opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special U.S. tax counsel to the Company, dated
the Closing Date, to the effect that although the discussion set forth in the
Prospectus under the headings “United
States Federal Income Tax Considerations - Introduction” and “- Non-United
States Holders” does not purport to discuss all possible United States federal
income tax consequences of the purchase, ownership and disposition of the
Securities to non-United States holders of the Securities, such discussion
constitutes, in all material respects, a fair and accurate summary of the United
States federal income tax consequences of the purchase, ownership and
disposition of the Securities to
non-United
States holders of the Securities.
Xxxxxxx
X. Xxxxxxx, Esq., General Counsel, Finance and Capital Markets of the Company,
is counsel to the Company. Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP is
special U.S. tax counsel to the Company. Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
LLP is counsel to the Underwriters.
Please
accept this offer no later than 9:00 p.m. (Eastern Time) on February 9, 2007
by
signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
4
“We
hereby accept your offer, set forth in the Terms Agreement, dated February
9,
2007, to purchase the Securities on the terms set forth therein.”
|
Very
truly yours,
CITIGROUP
GLOBAL MARKETS INC.,
on
behalf of the Underwriters named herein
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||
| |
|
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |
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Name: Xxxxxxx X. Xxxxxxx |
||
| Title: Vice President | ||
ACCEPTED:
By:
/s/
Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
Assistant Treasurer
5
ANNEX
A
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Name
of Underwriter
|
Principal
Amount of Securities
|
|||
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Citigroup
Global Markets Inc.
|
$
|
630,000,000
|
||
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Bear,
Xxxxxxx & Co. Inc.
|
18,750,000
|
|||
|
Deutsche
Bank Securities Inc.
|
18,750,000
|
|||
|
Xxxxxxx,
Xxxxx & Co.
|
18,750,000
|
|||
|
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated
|
18,750,000
|
|||
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Banc
of America Securities LLC
|
7,500,000
|
|||
|
Credit
Suisse Securities (USA) LLC
|
7,500,000
|
|||
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Xxxxxx
Brothers Inc.
|
7,500,000
|
|||
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Loop
Capital Markets, LCC
|
7,500,000
|
|||
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USB
Securities LLC
|
7,500,000
|
|||
|
The
Xxxxxxxx Capital Group, L.P.
|
7,500,000
|
|||
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Total
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$
|
750,000,000
|
||
6
