Citigroup plans to price 10%-14% ELKS linked to Principal Financial

By Angela McDaniels

Tacoma, Wash., May 12 - Citigroup Funding Inc. plans to price Equity LinKed Securities due Nov. 24, 2010 linked to the common stock of Principal Financial Group, Inc., according to an FWP filing with the Securities and Exchange Commission.

The six-month notes will carry an annualized coupon of 10% to 14%, with the exact rate to be set at pricing. Interest will be paid monthly.

If the price of Principal Financial stock declines by 25% or more during the life of the notes, the payout at maturity will be a number of Principal Financial shares equal to par divided by the initial share price or, at each holder's option, the value of those shares in cash. Otherwise, the payout will be par.

The notes are expected to price May 25 and settle three business days later.

Citigroup Global Markets Inc. is the underwriter.

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