Citigroup plans to price 20-year callable leveraged CMS spread notes

By Angela McDaniels

Tacoma, Wash., Dec. 1 - Citigroup Funding Inc. plans to price callable leveraged CMS spread notes due Dec. 23, 2030 linked to the 30-year and two-year Constant Maturity Swap rates, according to a 424B2 filing with the Securities and Exchange Commission.

The coupon will be 11% for the first year. After that, the rate will be four times the spread of the 30-year CMS rate over the two-year CMS rate minus 50 basis points, up to a maximum of 11% per year in each interest period. Interest will be payable quarterly and cannot be less than zero.

The payout at maturity will be par.

Beginning in December 2011, the notes will be callable at par on any interest payment date.

The notes (Cusip 1730T0LH0) are expected to price in December.

Citigroup Global Markets Inc. is the underwriter.

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