Citigroup to sell protected trust certificates linked to S&P 500 index

By Susanna Moon

Chicago, May 26 - Citigroup Funding Inc. plans to price zero-coupon principal-protected trust certificates due 2014 linked to the S&P 500 index through Safety First Trust Series 2009-3, according to a 424B2 filing with the Securities and Exchange Commission.

The payout at maturity will be par of $10 plus 90% to 100% of any index gain, with the exact participation rate to be set at pricing. Investors will receive at least par.

Investors may exchange each $10 principal amount of trust certificates held for one equity index participation security with a $10 face amount and one equity index warrant with a $10 notional amount.

At maturity, each equity index participation security will pay a redemption amount equal to $10 plus 90% to 100% of any index gain or 100% of any index decline.

The equity index warrants will be automatically exercised at maturity. If the index gains or stays flat, the warrants will pay nothing. If the index falls, the warrants will pay $10 times the absolute value of the decline.

The issuer said it will apply to list the certificates on NYSE Arca under the symbol "ADH."

Citigroup Global Markets Inc. is the underwriter.

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