Citi wraps tenders for up to $500 million notes in Dutch auction offer

By Susanna Moon

Chicago, Feb. 21 - Citigroup Inc. said it plans to accept the following amounts in the tender offers to purchase up to $500 million equivalent of four series of notes under a modified Dutch auction:

• £48 million of outstanding 7.625% fixed-rate notes due 2018;

• £138 million of outstanding 6.5% senior notes due 2030 and 6.8% senior notes due 2038; and

• €115 million of outstanding 7.375% fixed-rate notes due 2014.

The offers expired at 11 a.m. ET on Feb. 20, with settlement occurring on Feb. 28.

Pricing for the outstanding notes was slated for 9 a.m. ET on Feb. 21 using a benchmark security plus a fixed spread, as follows:

• For the £497,615,000 outstanding of the £750 million 7.625% notes, pricing is based on the 5% U.K. Treasury gilt due March 2018 plus a spread of 154 bps;

• For the £251,565,000 outstanding of the £400 million 6.5% notes, pricing is based on the 4.75% U.K. Treasury gilt due December 2030 plus 140 bps;

• For the £535,073,000 outstanding of the £800 million 6.8% notes, pricing is based on the 4.75% U.K. Treasury gilt due December 2038 plus 145 bps; and

• For the €902.49 million outstanding of the €1.5 billion 7.375% notes, pricing is based on the interpolated euro mid-swap rate plus 10 bps.

The company also will pay accrued interest.

Citigroup Global Markets Ltd. (attn.: liability management group, +44 20 7986 8969 or email liabilitymanagement.europe@citi.com) is the dealer manager, and Citibank, NA, London Branch (attn.: exchange team, +44 20 7508 3867 or email exchange.gats@citi.com) is the tender agent.

The offers reflect the company's continued robust liquidity position and are consistent with its recent liability management initiatives, according to a press release.

In 2012, the company reduced its outstanding long-term debt by about $17 billion through liability management initiatives, including the redemptions of trust preferred securities. Along with the natural maturing of long-term debt that requires no refinancing, these initiatives result in lower borrowing costs and reduce the overall level of the company's long-term debt outstanding, the release noted.

The company said it will continue to consider opportunities to repurchase its long-term as well as short-term debt based on several factors, including without limitation the economic value, potential impact on the company's net interest margin and borrowing costs and the overall remaining tenor of its debt portfolio.

The financial services company is based in New York City.

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