Terms Agreement, dated April 22, 2024, among Citigroup Inc. (the Company) and the underwriters named therein, relating to the offer and sale of the Companys 5.070% Fixed Rate / Floating Rate Callable Senior Notes due April 29, 2028
Exhibit 1.01
Execution Version
TERMS AGREEMENT
April 22, 2024
Citigroup Inc.
388 Greenwich Street
New York, New York 10013
Attention: Assistant Treasurer
Ladies and Gentlemen:
We understand that Citigroup Inc., a Delaware corporation (the “Company”), proposes to issue and sell C$1,000,000,000 aggregate principal amount of its 5.070% Fixed Rate / Floating Rate Notes Due 2028 (the “Securities”). Subject to the terms and conditions set forth herein or incorporated by reference herein, we, the entities listed on Annex A hereto, as underwriters (the “Underwriters”), offer to purchase, severally and not jointly, the principal amount of the Securities set forth opposite our respective names on the list attached as Annex A hereto at 99.750% of the principal amount thereof, plus accrued interest, if any, from the date of issuance. The Closing Date shall be April 29, 2024, at 9:30 a.m. (Eastern Time). The closing shall take place at the offices of Cleary Gottlieb Steen & Hamilton LLP located at One Liberty Plaza, New York, New York 10006.
The Securities shall have the terms set forth in Annex B hereto. The Securities shall be issuable as Registered Securities only. The Securities will be initially represented by one or more global Securities registered in the name of CDS & Co. as nominee for CDS Clearing and Depository Services Inc. (“CDS”) or its nominees, as described in the Prospectus relating to the Securities. Beneficial interests in the Securities will be shown on, and transfers thereof will be effected only through, records maintained by CDS, Euroclear Bank SA/NV and Clearstream Banking S.A. and their respective participants. Owners of beneficial interests in the Securities will be entitled to physical delivery of Securities in certificated form only under the limited circumstances described in the Prospectus. Principal and interest on the Securities shall be payable in Canadian dollars, and the record date for the Securities shall be the business day immediately preceding each interest payment date. Sections 12.02 and 12.03 of the indenture, dated as of November 13, 2013, between the Company and The Bank of New York Mellon, as trustee (the “Trustee”) (as amended from time to time, the “Indenture”) relating to defeasance and discharge and covenant defeasance, respectively, shall apply to the Securities. Any funds or securities deposited pursuant to the defeasance provisions will be C$ or Canadian government notes.
All the provisions contained in the document entitled “Citigroup Inc.— Amended and Restated Debt Securities — Underwriting Agreement — Basic Provisions” dated March 7, 2023 (the “A&R Basic Provisions”), a copy of which you have previously received, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Terms Agreement to the same extent as if the A&R Basic Provisions had been set forth in full herein.
The Company agrees to reimburse the Underwriters for the applicable CIRO fees related to the offer and sale of the Securities, as well as 50% of the fees and expenses of counsel to the Underwriters, upon receipt of a written invoice.
Terms defined in the A&R Basic Provisions are used herein as therein defined. The Execution Time means 3:55 p.m. (Eastern Time).
The Underwriters hereby agree in connection with the underwriting of the Securities to comply with the requirements set forth in any applicable sections of Rule 5121 of the Financial Industry Regulatory Authority, Inc.
Selling Restrictions:
European Economic Area
Each Underwriter represents and agrees that no Securities which are the subject of the offering contemplated by the Prospectus Supplement may be offered, sold or otherwise made available to any retail investor in the European Economic Area. For the purposes of this provision:
(a) the expression “retail investor” means a person who is one (or more) of the following:
(1) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (“MiFID II”); or
(2) a customer within the meaning of Directive (EU) 2016/97 (the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or
(3) not a qualified investor as defined in the Regulation (EU) 2017/1129 (the “Prospectus Regulation”); and
(b) the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities.
United Kingdom
Each Underwriter represents and agrees that no Securities which are the subject of the offering contemplated by the Prospectus Supplement may be offered, sold or otherwise made available to any retail investor in the United Kingdom. For the purposes of this provision:
(a) the expression “retail investor” means a person who is one (or more) of the following:
(1) a retail client as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the “EUWA”); or
(2) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (the “FSMA”) and any rules or regulations made under the FSMA to implement the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or
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(3) not a qualified investor as defined in the Prospectus Regulation as it forms part of domestic law by virtue of the EUWA; and
(b) the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities.
Additionally, in the United Kingdom, the Prospectus Supplement and the accompanying Prospectus is being distributed only to, and is directed only at qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive who are, (i) persons who have professional experience in matters relating to investments falling within Article 19 (5) of the FSMA (Financial Promotion) Order 2005, as amended, or the Order, and/or (ii) high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order, which persons together we refer to in this prospectus as “relevant persons.” Accordingly, each Underwriter represents and agrees that such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The Prospectus Supplement and the accompanying Prospectus must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which the Prospectus Supplement and the accompanying Prospectus relates is only available to, and will be engaged in with, relevant persons only.
Hong Kong
Each Underwriter:
(a) has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Securities other than to (i) “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (ii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and
(b) has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Securities, which is directed at, or the contents of which are or are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under securities laws of Hong Kong) other than with respect to Securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance.
Japan
The Securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “FIEA”). Each Underwriter represents and agrees that it has not and will not offer or sell, directly or indirectly, any of the Securities in Japan or to, or for the account or benefit of, any resident of Japan (including any corporation or other entity organized
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under the laws of Japan), or to, or for the account or benefit of, any resident of Japan for reoffering or resale, directly or indirectly, in Japan or to, or for the account or benefit of, any resident of Japan except (1) pursuant to an exemption from the registration requirements of, or otherwise in compliance with, the FIEA and (2) in compliance with the other applicable laws, regulations and governmental guidelines of Japan.
Singapore
The Prospectus Supplement and accompanying Prospectus relating to this offering have not been and will not be registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act 2001 (the “SFA”). Accordingly, each Underwriter has not offered or sold any Securities or caused the Securities to be made the subject of an invitation for subscription or purchase and will not offer or sell any Securities or cause the Securities to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, such Prospectus Supplement and accompanying Prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Securities, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA or (ii) to an accredited investor (as defined in Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA.
Solely for the purposes of its obligations pursuant to sections 309B(1)(a) and 309B(1)(c) of the SFA, the Company has determined, and hereby notifies all relevant persons (as defined in Section 309A of the SFA) that the Securities are “prescribed capital markets products” (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
Certain of the Underwriters may not be U.S. registered broker-dealers and accordingly will not effect any sales within the United States except in compliance with applicable U.S. laws and regulations, including the rules of the Financial Industry Regulatory Authority.
Karen Wang, Esq., Senior Vice President – Corporate Securities Issuance Legal of the Company, is counsel to the Company. Cleary Gottlieb Steen & Hamilton LLP is special tax counsel to the Company and counsel to the Underwriters.
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Please accept this offer no later than 9:00 p.m. (Eastern Time) on April 22, 2024 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us, or by sending us a written acceptance in the following form:
“We hereby accept your offer, set forth in the Terms Agreement, dated April 22, 2024, to purchase the Securities on the terms set forth therein.”
| Very truly yours, | ||
| CITIGROUP GLOBAL MARKETS INC., | ||
| on behalf of the Underwriters named herein | ||
| By: | /s/ Adam D. Bordner | |
| Name: Adam D. Bordner | ||
| Title: Managing Director | ||
| ACCEPTED: | ||
| CITIGROUP INC. | ||
| By: | /s/ Elissa Steinberg | |
| Name: Elissa Steinberg | ||
| Title: Assistant Treasurer | ||
ANNEX A
| Name of Underwriter | Principal Amount of Securities | |||
| Citigroup Global Markets Inc. | C$ | 140,000,000 | ||
| TD Securities Inc. | C$ | 140,000,000 | ||
| RBC Dominion Securities Inc. | C$ | 130,000,000 | ||
| Scotia Capital Inc. | C$ | 130,000,000 | ||
| BMO Nesbitt Burns Inc. | C$ | 130,000,000 | ||
| CIBC World Markets Inc. | C$ | 130,000,000 | ||
| National Bank Financial Inc. | C$ | 130,000,000 | ||
| Desjardins Securities Inc. | C$ | 70,000,000 | ||
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| Total | C$ | 1,000,000,000 | ||
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ANNEX B
Citigroup Inc.
5.070% Fixed Rate/Floating Rate Callable Senior Notes Due 2028
Final Term Sheet
This term sheet supplements the information set forth under the section “Description of Notes” in the Preliminary Prospectus Supplement, subject to completion, dated April 22, 2024 (the “Preliminary Prospectus Supplement”) to the Prospectus dated March 7, 2023.
| Issuer: | Citigroup Inc. (“Issuer” or “we”) | |
| Expected Credit Ratings(1): | [Omitted] | |
| Issue Type: | Canadian Dollar Fixed Rate/Floating Rate Callable Senior Notes | |
| Status of Notes: | Senior unsecured obligations of the Issuer, ranking equally with all other unsecured and senior indebtedness of the Issuer | |
| Specified Currency: | Canadian Dollars (CAD) | |
| Principal Amount: | CAD $1.0 billion | |
| Stated Maturity Date: | April 29, 2028 | |
| Par Call Date: | April 29, 2027 | |
| Launch Date: | April 22, 2024 | |
| Pricing Date: | April 22, 2024 | |
| Settlement Date: | April 29, 2024 (T+5) | |
| Spread to the GoC Benchmark Bond Curve: | +107 basis points versus the Government of Canada curve, interpolated between CAN 1.25% due March 1, 2027 and CAN 2.75% due September 1, 2027
+103.5 bps (includes a curve adjustment of -3.5 bps) vs. the CAN 1.25% due March 1, 2027 (priced at $92.563; to yield 4.035%) | |
| Fixed Rate Coupon: | 5.070% | |
| Interest Rate: | 5.070% per annum fixed rate payable semi-annually in arrears on each Interest Payment Date from and including the Settlement Date, to, but excluding, the Par Call Date.
On each Interest Payment Date from, and including, the Par Call Date to, but excluding, the Maturity Date or earlier redemption date (the “Floating Rate Period”), the rate per annum equal to Daily Compounded CORRA determined for the relevant Observation Period in respect of such interest period in the Floating Rate Period plus 99 bps, payable quarterly in arrears.
Upon the occurrence of certain specified events, certain fallback rates may replace the Daily Compounded CORRA administered by the Bank of Canada (or any successor administrator). These fallback rates will be triggered in a specified order and upon the occurrence of specified events as outlined in the Preliminary Prospectus Supplement. | |
| Interest Payment Dates: | Payable on the 29th day of each April and October in each year, commencing October 29, 2024 to and including the Par Call Date.
If applicable, the 29th day of each April, July, October, and January, from but excluding the Par Call Date to and including the Maturity Date or earlier redemption date. | |
| Daily Compounded CORRA: | For an Observation Period the rate will be calculated as follows, with the resulting percentage rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards and -0.000005% being rounded downwards: | |
| Daily Compounded CORRA = |
| |||
| Where:
• “CORRA Compounded Indexstart” is the CORRA Compounded Index value on the date that is two Bank of Canada Business Days preceding the first date of the relevant interest period in the Floating Rate Period, as published by the Bank of Canada, as the administrator of such rate (or any successor administrator of such rate), on the website of the Bank of Canada or any successor website;
• “CORRA Compounded Indexend” is the CORRA Compounded Index value on the date that is two Bank of Canada Business Days preceding the Interest Payment Date relating to the relevant interest period in the Floating Rate Period, as published by the Bank of Canada, as the administrator of such rate (or any successor administrator of such rate), on the website of the Bank of Canada or any successor website;
• “d” is the number of calendar days in the relevant Observation Period; and
• “CORRA Compounded Index” means the measure of the cumulative impact of the Canadian Overnight Repo Rate Average (CORRA) compounding over time administered and published by the Bank of Canada (or any successor administrator). | ||
| Interest Period: | Each interest period from and including an Interest Payment Date during the Floating Rate Period (or, in the case of the first interest period in the Floating Rate Period, the Par Call Date) to, but excluding, the next following Interest Payment Date (or in the case of the final interest period in the Floating Rate Period, the Maturity Date or earlier redemption date). | |
| Observation Period: | In respect of each interest period during the Floating Rate Period, the period from, and including, the date that is two Bank of Canada Business Days preceding the first date in such interest period to, but excluding, the date that is two Bank of Canada Business Days preceding the Interest Payment Date or, in the case of the final Interest Payment Date, the Maturity Date or earlier redemption date. | |
| Redemption at Issuer Option: | We may, at our option, on or after October 29, 2024 (or if additional notes are issued after April 29, 2024, beginning six months after the issue date of such additional notes) and prior to April 29, 2027, redeem the notes, in whole or in part, at a redemption price equal to the greater of (i) 100% of the principal amount of notes being redeemed and (ii) the Canada Yield Price (as defined in the Preliminary Prospectus), plus, in either case, accrued and unpaid interest thereon to, but excluding, the date of redemption.
We may, at our option, on April 29, 2027 redeem the notes, in whole, but not in part, at a redemption price equal to the sum of 100% of the principal amount of notes plus accrued and unpaid interest to, but excluding, the date of redemption. | |
| Redemption for Tax Purposes: | We may redeem the notes, at our option, in whole at any time, but not in part, at a redemption price equal to 100% of the principal amount of the notes plus accrued and unpaid interest thereon to, but excluding, the date of redemption, if, as a result of changes in U.S. tax law, withholding tax or information reporting requirements are imposed on payments on the notes to non-U.S. persons. | |
| Issue Price: | CAD $100.00 | |
| Yield: | 5.070% to April 29, 2027 | |
| Net Proceeds: | CAD $997,500,000 (before expenses) | |
| Business Day: | Toronto and New York | |
| Day Count Convention: | To, but excluding, April 29, 2027 Actual/Actual (Canadian Compound Method), which means when calculating interest for a full semi-annual interest period, the day count convention is 30/360 and when calculating for a period that is shorter than a full semi-annual interest period, the day count convention is Actual/365 (Fixed).
From April 29, 2027, Actual/365. | |
| Form and Denominations: | Registered Global note, CAD $150,000 and integral multiples of CAD $1,000 in excess thereof. | |
| Clearing System: | CDS | |
| Governing Law: | State of New York | |
| Sales Restrictions: | Available for sale in Canada to accredited investors. Available for sale in the U.S. as notes are Registered Global notes. Resales in Canada will be subject to resale restrictions. | |
| Defeasance: | Applicable. Provisions of Sections 12.02 and 12.03 of the Indenture (as defined in the Preliminary Prospectus Supplement) apply. | |
| Paying Agent: | Citibank, N.A., London office | |
| CUSIP / ISIN: | 172967MJ7 / CA172967MJ70 | |
| Lead Managers/Book Runners: | Citigroup Global Markets Inc., TD Securities Inc., RBC Dominion Securities Inc., Scotia Capital Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., National Bank Financial Inc. | |
| Co-Managers: | Desjardins Securities Inc. | |
| (1) | A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. |
Citigroup Inc. has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents Citigroup Inc. has filed with the SEC for more complete information about Citigroup Inc. and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. The file number for Citigroup Inc.’s registration statement is No. 333-270327. Alternatively, you can request the prospectus by calling toll-free in the United States at ###-###-####.
