Citi plans callable leveraged CMS spread principal-protected notes

By Angela McDaniels

Tacoma, Wash., Aug. 4 - Citigroup Funding Inc. plans to price callable leveraged CMS spread principal-protected notes due 2024, according to a 424B2 filing with the Securities and Exchange Commission.

Interest will be payable quarterly. The interest rate is initially fixed at 11% to 12%, with the exact coupon to be set at pricing. Beginning two years after issuance, interest will equal six times the spread of the 30-year Constant Maturity Swap rate over the two-year CMS rate. Each interest payment will be subject to a maximum of 15% per year and a minimum of zero.

The payout at maturity will be par.

Beginning two years after issuance, the notes will be callable at par on any interest payment date.

The notes are expected to price in August.

Citigroup Global Markets Inc. is the underwriter.

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