Citigroup buys back $569 million of seven series of notes in offers

By Susanna Moon

Chicago, Aug. 24 – Citigroup Inc. said it received tenders for $569 million of seven series of notes in the offers that ended at 11:59 p.m. ET on Aug. 21 and accepted all the tendered notes for purchase.

The breakdown for the tendered amounts is provided below, with final settlement set for Aug. 26.

The bank offered to buy all the securities tendered in the any and all offer, with the purchase amounts as follows:

• C$90,267,000, unchanged since the early deadline, of the C$228,393,000 of 5.365% subordinated notes due 2036. Citi will pay C$1,087.03 per C$1,000 principal amount, set using the 5% Government of Canada Bond due June 1, 2037 plus 260 basis points;

• $5,639,000, up from $5,637,000, of the $123.21 million of 5.875% senior notes due 2037. The purchase price is $1,201.07 per $1,000 principal amount, based on the 2.5% Treasury due Feb. 15, 2045 plus 150 bps; and

• $31,578,000, up from $31,572,000, of the $320,904,000 of 6.875% senior notes due 2038. Pricing is $1,347.05 per $1,000 principal amount, set using the 2.5% Treasury due Feb. 15, 2045 plus 150 bps.

The final response in the capped offers were as follows:

• $21,733,000, unchanged since the early date, of the outstanding $213,483,000 of 5.85% senior notes due 2034. The tender for this series is capped at $100 million. Citi will pay $1,183.49 per $1,000 principal amount, based on the 2.5% Treasury due Feb. 15, 2045 plus 150 bps;

• $45.91 million, up from $45,885,000, of the outstanding $597,425,000 of 5.875% subordinated notes due 2033. The tender for this series is capped at $180 million. Pricing is $1,135.76 per $1,000 principal amount, set using the 2.5% Treasury due Feb. 15, 2045 plus 180 bps;

• $131,829,000, up from $131.64 million, of the outstanding $806,524,000 of 6% subordinated notes due 2033. The cap for these notes is $250 million. The purchase price is $1,153.24 per $1,000 principal amount, based on the 2.5% Treasury due Feb. 15, 2045 plus 180 bps; and

• $263.66 million, unchanged, of the outstanding $989,931,000 of 6.125% subordinated notes due 2036. The cap for this series is $300 million. Pricing is $1,177.63 per $1,000 principal amount, calculated using the 2.5% Treasury due Feb. 15, 2045 plus 185 bps.

Holders who tendered their notes by the early tender date, 5 p.m. ET on Aug. 7, received the total amount, which included an early tender premium of $30.00 or C$30.00, as applicable, per $1,000 or C$1,000 of notes, respectively.

The company will also pay accrued interest up to the applicable settlement date.

Pricing was set at 2 p.m. ET on Aug. 10. The offers were announced on July 27.

Citi said it could have increased the tender cap for one or more series of the notes under the maximum tender offer.

According to the press release, the offers are consistent with Citi’s liability management strategy and reflect its ongoing efforts to enhance the efficiency of its funding and capital structure.

Since 2013, Citi has redeemed or retired $28.1 billion of securities, excluding exchanged securities, of which $6 billion was redeemed or retired in 2015, reducing the company’s overall funding costs.

Citi said it will continue considering opportunities to redeem or repurchase securities based on several factors, including the economic value, potential impact on Citi’s net interest margin and borrowing costs, the overall remaining tenor of Citi’s debt portfolio, capital impact and overall market conditions.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) is the dealer manager for the offers. Global Bondholder Services Corp. (866 470-4300 or 212 430-3774) is the depositary and information agent for U.S. dollar-denominated notes. Kingsdale Shareholder Services (888 518-1557 or 416 867-2272) is the depositary and information agent for Canadian dollar-denominated notes.

Citigroup is a financial services company based in New York City.

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