Citigroup calls 8.5% preferreds, 6.5% convertible preferreds

By Toni Weeks

San Luis Obispo, Calif., May 14 - Citigroup Inc. plans to redeem all $94.3 million liquidation preference of its 8.5% series F noncumulative preferred stock and its 6.5% series T convertible noncumulative preferred stock, according to a press release.

The 8.5% preferreds will be redeemed on June 15 at $25 per share plus, for holders of record as of June 5, the $0.53125 regular quarterly dividend due June 15.

The 6.5% convertible preferreds will be redeemed on June 17 at $50 per share plus $0.28889 of accrued dividends from the last dividend payment date to June 17.

Citi said that the redemptions reflect its ongoing efforts to enhance the efficiency of its funding and capital structure. Since the beginning of 2012, and including these redemptions, Citigroup has retired $22.7 billion of senior debt, subordinated debt, preferred and trust preferred securities.

According to the press release, the redemptions are also consistent with Citi's liability management strategy and reflect the company's strategy of continuing to optimize its capital structure under Basel III.

Citigroup's tier-1 common capital and related tier-1 common ratio, either under Basel I or as estimated under Basel II, will not be affected by the planned redemptions, the release noted. Citigroup's Basel I tier-1 capital and its Basel tier-1 capital ratio are expected to decrease by about $94 million and 1 basis point, respectively.

Computershare Trust Co., NA is the depositary.

The financial services company is based in New York.

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