New Issue: Citigroup prices $1.48 annual observation coupon notes on S&P 500

By Marisa Wong

Madison, Wis., May 31 - Citigroup Funding Inc. priced $1.48 million of annual observation coupon notes due May 31, 2017 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable annually. If the annual index return is greater than or equal to zero, the coupon will be 7.75%. If the annual index return is negative, the coupon will be 2%. The annual index return will be measured from the prior annual observation date in May of each year.

If the final index level is at least 80% of the initial index level, the payout at maturity will be par. Otherwise, investors will lose 1% for every 1% that the index declines beyond 20%.

Citigroup Global Markets Inc. is the underwriter.

Issuer:	Citigroup Funding Inc.
Issue:	Annual observation coupon notes
Underlying index:	S&P 500
Amount:	$1,482,000
Maturity:	May 31, 2017
Coupon:	If annual index return is greater than or equal to zero, 7.75%; if annual index return is negative, 2%; payable annually
Price:	Par
Payout at maturity:	If final index level is at least 80% of initial index level, par; otherwise, 1% loss for every 1% that index declines beyond 20%
Initial index level:	1,332.42
Pricing date:	May 29
Settlement date:	May 31
Underwriter:	Citigroup Global Markets Inc.
Fees:	3.45%
Cusip:	1730T0XM6

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