Citigroup plans strategic market access notes linked to MLP basket

By Angela McDaniels

Tacoma, Wash., June 29 - Citigroup Funding Inc. plans to price strategic market access notes due September 2011 linked to a basket of energy-related master limited partnerships, according to a 424B2 filing with the Securities and Exchange Commission.

The equally weighted basket includes the common units of El Paso Pipeline Partners, LP, Energy Transfer Equity, LP, Enterprise Products Partners LP, Inergy, LP, Magellan Midstream Partners, LP, NuStar Energy LP, NuStar GP Holdings, LLC, Oneok Partners, LP, Plains All American Pipeline, LP, Regency Energy Partners LP, Spectra Energy Partners, LP, Suburban Propane Partners, LP, Targa Resources Partners LP, Teekay Offshore Partners LP and Western Gas Partners, LP. The basket components will be rebalanced to equal weighting approximately six months after pricing.

Interest will be payable quarterly. The interest rate will be 0.2% per year plus the total amount of ordinary cash dividends with respect to the basket components for which an ex-date has occurred during each quarterly interest period, if any, for each $1,000 note.

The payout at maturity will be the net investment value on the third trading day prior to maturity.

On the pricing date, the net investment value will be $990 per note. On each subsequent trading day, the net investment value will be (A) (i) $990 multiplied by (ii) the basket return percentage, which compares the value of the basket on that trading day to its value on the pricing date plus (B) any accrued dividends up to and including that trading day minus (C) the 1% per year basket adjustment factor calculated up to and including that trading day.

Citigroup Global Markets Inc. is the underwriter.

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