TERMS AGREEMENT
December
2, 2008
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$3,750,000,000 aggregate principal amount of its debt
securities (the “Securities”) guaranteed by the Federal Deposit Insurance
Corporation (“FDIC”) under the FDIC’s Temporary Liquidity Guarantee Program
(“TLGP”). Subject to the terms and conditions set forth herein or
incorporated by reference herein, we, Citigroup Global Markets Inc., Banc of
America Securities LLC, Xxxxxxx, Xxxxx & Co., Greenwich Capital Markets,
Inc., X.X. Xxxxxx Securities Inc., Xxxxxx Xxxxxxx & Co. Incorporated,
Barclays Capital Inc., Xxxxxxxx Xxxxxx Van, LLC, BNP Paribas Securities Corp.,
Xxxxxxx Capital Markets, LLC, CastleOak Securities L.P., Credit Suisse
Securities (USA) LLC, Deutsche Bank Securities Inc., Loop Capital Markets, LLC,
RBC Capital Markets Corporation, Xxxxxx Xxxxxxx & Co., Inc., TD Securities
(USA) LLC, UBS Securities LLC, and The Xxxxxxxx Capital Group, 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 99.452% of the principal amount thereof,
plus accrued interest, if any, from the date of issuance. The Closing
Date shall be December 9, 2008, at 8:30 A.M. (Eastern Time). The
closing shall take place at the offices of Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
LLP located at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The
Securities shall have the following terms:
|
Title:
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2.875%
Senior Notes Due 2011
Guaranteed
under the FDIC’s Temporary Liquidity Guarantee Program
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Maturity:
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December
9, 2011
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Interest
Rate:
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2.875%
per annum
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Interest
Payment Dates:
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Semi-annually
on the 9th day of each June and December, commencing June 9,
2009
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Initial
Price to Public:
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99.752%
of the principal amount thereof, plus accrued interest, if any, from
December 9, 2008
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Redemption
Provisions:
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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
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Record
Date:
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The
June 1st
and December 1st
preceding each Interest Payment
Date
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1
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. 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.
In
addition to the representations and warranties provided by the Company in
Section 1 of the Basic Provisions, the Company represents and warrants to, and
agrees with, each Underwriter that, when issued and delivered pursuant to the
Basic Provisions and the terms of this Terms Agreement, the Securities will be
“FDIC-guaranteed debt” as defined in 12 CFR Section 370.2(i).
In
addition to the agreements made by the Company in Section 5 of the Basic
Provisions, the Company agrees with the several Underwriters that:
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(a)
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the
proceeds of the sale of the Securities will not be used to prepay Company
debt that is not FDIC-guaranteed
debt;
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(b)
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payment
of all assessments associated with the Company’s participation in the TLGP
and the issuance of the Securities will be made within the time period and
in the manner required by 12 CFR Section
370.6;
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(c)
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notice
of the issuance of the Securities will be provided to the FDIC within five
(5) calendar days of the date of issuance, as required by 12 CFR
Section 370.6 and the FDIC’s Financial Institution Letter 139-2008;
and
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(d)
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the
Company will comply with all other procedures and requirements of the
TLGP.
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2
The
Company agrees to use its best efforts to have the Securities approved for
listing on the Luxembourg Stock Exchange; provided, however, that if it is
impracticable or unduly burdensome, in the good faith determination of the
Company, to obtain such listing due to listing requirements relating to the FDIC
guarantee, the Company will have no obligation to obtain such
listing. In such circumstance, the Company shall use its 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 good faith determination of the Company, 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.
If
the Securities are listed on the Luxembourg Stock Exchange, the Company agrees
to use its best efforts 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 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 good faith determination
of the Company, 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.
The
Underwriters hereby agree in connection with the underwriting of the Securities
to comply with the requirements set forth in any applicable sections of NASD
Conduct Rule 2720 adopted by the Financial Industry Regulatory
Authority.
The
Underwriters hereby agree that the Securities will not be exclusively marketed
and targeted to retail customers.
Selling
Restrictions:
European
Economic Area
The
Underwriters represent and agree that in relation to each Member State of the
European Economic Area which has implemented the Prospectus Directive (each, a
“Relevant Member State”), with effect from and including the date on which the
Prospectus Directive is implemented in that relevant member state (the “Relevant
Implementation Date”), an offer to the public of any Securities which are the
subject of this offering may not be made in that Relevant Member State prior to
the publication of a prospectus in relation to such Securities that has been
approved by the competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and notified to the
competent authority in that Relevant Member State, all in accordance with the
Prospectus Directive, except that , with effect from and including the Relevant
Implementation Date, an offer to the public in that Relevant Member State of any
Securities may be made at any time:
3
(a) to
legal entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is solely
to invest in securities;
(b) to
any legal entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance sheet of more than
€43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in
its last annual or consolidated accounts;
(c) to
fewer than 100 natural or legal persons (other than qualified investors as
defined in the Prospectus Directive) subject to obtaining the prior consent of
Citigroup Global Markets Inc. for any such offer; or
(d) in
any other circumstances that do not require the publication of a prospectus
pursuant to Article 3 of the Prospectus Directive.
For the
purposes of this provision, the expression an “offer to the public” in relation
to any Securities in any Relevant Member State means the communication in any
form and by any means of sufficient information on the terms of the offer and
any Securities to be offered so as to enable an investor to decide to purchase
any Securities, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression
“Prospectus Directive” means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
This EEA
selling restriction is in addition to any other selling restrictions set out
below.
United
Kingdom
Each
Underwriter represents and agrees that the Prospectus Supplement and
accompanying Prospectus relating to this offering is only being distributed to,
and is only directed at, persons in the United Kingdom that are qualified
investors within the meaning of Article 2(1)(e) of the Prospectus Directive that
are also (i) investment professionals falling within Article 19(5) of the
Financial Services and Markets Xxx 0000 (Financial Promotion) Order 2005 (the
“Order”) or (ii) high net worth entities, and other persons to whom it may
lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as “Relevant
Persons”).
France
No
prospectus (including any amendment, supplement or replacement thereto) has been
prepared in connection with the offering of the Securities that has been
approved by the Autorité des
marchés financiers or by the competent authority of another State that is
a contracting party to the Agreement on the European Economic Area and notified
to the Autorité des marchés
financiers; each Underwriter represents and agrees that no Securities
have been offered or sold nor will be offered or sold, directly or indirectly,
to the public in France; each Underwriter represents and agrees that the
prospectus or any other offering material relating to the Securities have not
been distributed or caused to be distributed and will not be distributed or
caused to be distributed to the public in France; such offers, sales and
distributions have been and shall only be made in France to persons licensed to
provide the investment service of portfolio management for the account of third
parties, qualified investors (investisseurs qualifiés)
and/or a restricted circle of investors (cercle restreint
d’investisseurs), in each case investing for their own account, all as
defined in Articles L. 411-2, D. 411-1, D. 411-2, D. 411-4, D. 734-1, D.744-1,
D. 754-1 and D. 764-1 of the Code monétaire et
financier. Each Underwriter represents and agrees that the
direct or indirect distribution to the public in France of any so acquired
Securities may be made only as provided by Articles L. 411-1, L. 411-2, L. 412-1
and L. 621-8 to L. 621-8-3 of the Code monétaire et financier
and applicable regulations thereunder.
4
Hong
Kong
Each
Underwriter:
(a) has
not offered or sold and will not offer or sell in Hong Kong, by means of any
document, any Securities other than to (i),”professional investors” as defined
in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules
made under that Ordinance; or (ii) in other circumstances which do not result in
the document being a “prospectus” as defined in the Companies Ordinance (Cap.
32) of Hong Kong or which do not constitute an offer to the public within the
meaning of that Ordinance; and
(b) has
not issued or had in its possession for the purposes of issue, and will not
issue or have in its possession for the purposes of issue, whether in Hong Kong
or elsewhere, any advertisement, invitation or document relating to the
Securities, which is directed at, or the contents of which are or are likely to
be accessed or read by, the public in Hong Kong (except if permitted to do so
under securities laws of Hong Kong) other than with respect to Securities which
are or are intended to be disposed of only to persons outside Hong Kong or only
to “professional investors” within the meaning of the Securities and Futures
Ordinance (Cap. 571) of Hong Kong and any rules made under that
Ordinance.
Japan
The
Securities have not been and will not be registered under the Securities and
Exchange Law of Japan. The Underwriters will not offer or sell,
directly or indirectly, any of the Securities in Japan or to, or for the account
or benefit of, any resident of Japan or to, or for the account or benefit of any
resident for reoffering or resale, directly or indirectly, in Japan or to, or
for the account or benefit of, any resident of Japan except (i) pursuant to an
exemption from the registration requirements of, or otherwise in compliance
with, the Securities and Exchange Law of Japan and (ii) in compliance with the
other relevant laws and regulations of Japan.
Singapore
The
Prospectus Supplement and accompanying Prospectus relating to this offering have
not been and will not be registered as a prospectus with the Monetary Authority
of Singapore under the Securities and Futures Act (Chapter 289 of Singapore)
(the “SFA”). Accordingly, each Underwriter has not offered or sold
any Securities or caused the Securities to be made the subject of an invitation
for subscription or purchase and will not offer or sell any Securities or cause
the Securities to be made the subject of an invitation for subscription or
purchase, and has not circulated or distributed, nor will it circulate or
distribute, such Prospectus Supplement and accompanying Prospectus or any other
document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the Securities, whether directly or indirectly, to
persons in Singapore other than (i) to an institutional investor under Section
274 of the SFA, (ii) to a relevant person, or any person pursuant to Section
275(1A), and in accordance with the conditions, specified in Section 275 of the
SFA or (iii) otherwise pursuant to, and in accordance with the conditions of,
any other applicable provision of the SFA.
5
Each
Underwriter will notify (whether through the distribution of the Prospectus
Supplement and accompanying Prospectus relating to this offering or otherwise)
each of the following relevant persons specified in Section 275 of the SFA which
has subscribed or purchased Securities from or through that Underwriter, namely
a person which is:
(a) a
corporation (which is not an accredited investor (as defined in Section 4A of
the SFA)) 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
(b) a
trust (where the trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor, that shares,
debentures and units of shares and debentures of that corporation or the
beneficiaries’ rights and interest in that trust shall not be transferable for 6
months after that corporation or that trust has acquired the Securities under
Section 275 of the SFA except:
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(1)
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to
an institutional investor (for corporations, under Section 274 of the SFA
)or to a relevant person defined in Section 275(2) of the SFA, or to any
person pursuant to an offer that is made on terms that such shares,
debentures and units of shares and debentures of that corporation or such
rights and interest in that trust are acquired at a consideration of not
less than $200,000 (or its equivalent in a foreign currency) for each
transaction, whether such amount is to be paid for in cash or by exchange
of securities or other assets, and further for corporations, in accordance
with the conditions specified in Section 275 of the
SFA;
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(2)
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where
no consideration is given for the transfer;
or
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(3)
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by
operation of law.
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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 December 2, 2008 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:
6
“We
hereby accept your offer, set forth in the Terms Agreement, dated December 2,
2008, to purchase the Securities on the terms set forth therein.”
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Very
truly yours,
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|||
| CITIGROUP GLOBAL MARKETS INC., | |||
| on behalf of the Underwriters named herein | |||
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By:
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/s/ Xxxx X. XxXxxxxxx, Xx. | |
| Name: Xxxx X. XxXxxxxxx, Xx. | |||
| Title: Managing Director | |||
| By: |
/s/
Xxxxxxx X. Xxxxxxxxx
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|
|||
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Xxxxxxx
X. Xxxxxxxxx
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||||
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Assistant
Treasurer
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7
ANNEX
A
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Name of Underwriter
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Principal Amount
of Securities
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|||
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Citigroup
Global Markets Inc.
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$ | 2,634,375,000 | ||
|
Banc
of America Securities LLC
|
150,000,000 | |||
|
Xxxxxxx,
Sachs & Co.
|
150,000,000 | |||
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Greenwich
Capital Markets, Inc.
|
150,000,000 | |||
|
X.X.
Xxxxxx Securities Inc.
|
150,000,000 | |||
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
150,000,000 | |||
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Barclays
Capital Inc.
|
28,125,000 | |||
|
Xxxxxxxx
Xxxxxx Van, LLC
|
28,125,000 | |||
|
BNP
Paribas Securities Corp.
|
28,125,000 | |||
|
Xxxxxxx
Capital Markets, LLC
|
28,125,000 | |||
|
CastleOak
Securities L.P.
|
28,125,000 | |||
|
Credit
Suisse Securities (USA) LLC
|
28,125,000 | |||
|
Deutsche
Bank Securities Inc.
|
28,125,000 | |||
|
Loop
Capital Markets, LLC
|
28,125,000 | |||
|
RBC
Capital Markets Corporation
|
28,125,000 | |||
|
Xxxxxx
Xxxxxxx & Co., Inc.
|
28,125,000 | |||
|
TD
Securities (USA) LLC
|
28,125,000 | |||
|
UBS
Securities LLC
|
28,125,000 | |||
|
The
Xxxxxxxx Capital Group
|
28,125,000 | |||
| 28,125,000 | ||||
|
Total
|
$ | 3,750,000,000 | ||
