Citigroup plans to price 15-year callable leveraged CMS spread notes

By Jennifer Chiou

New York, March 1 - Citigroup Funding Inc. plans to price callable leveraged CMS spread notes due 2026 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 8% 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, up to a maximum of 10% 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 2012, the notes will be callable at par on any interest payment date.

The Cusip for the notes is 1730T0LW7.

Citigroup Global Markets Inc. is the underwriter.

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