Safety First Trust Series 2008-3, the issuer, and the guarantors, Citigroup Funding Inc. and
Citigroup Inc., have filed registration statements (including prospectuses) with the Securities
and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you
invest, you should read the prospectuses in those registration statements (File Nos. 333-135867 and
333-132370) and the other documents Safety First Trust Series 2008-3, Citigroup Funding and
Citigroup Inc. have filed with the SEC for more complete information about Safety First Trust
Series 2008-3, Citigroup Funding, Citigroup Inc. and this offering. You may get these documents for
free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you can request the
prospectus by calling toll-free 1-877-858-5407.
This offering summary represents a summary of the terms and
conditions of the Certificates. We encourage you to read the
prospectus and pricing supplement related to this offering.
Capitalized terms used in this summary are defined in
“Final Terms” on page 4 of this offering
summary.
Overview
of the Trust Certificates
The
Principal-Protected Trust Certificates Linked to the Global
Index Basket due September 12, 2013 are equity index-linked
preferred securities issued by Safety First
Trust Series 2008-3
that will mature on September 12, 2013. Some key
characteristics of the Certificates
include:
£
Principal Protection Like a Fixed-Income
Investment. Similar
to a fixed-income investment, an investor’s initial
investment is 100% principal protected if the investor either
(i) holds the Certificates to maturity or
(ii) exercises its Exchange Right and holds both the
Securities and the Warrants until maturity. Because neither the
Securities nor the Warrants are principal protected if held
individually, if an investor exercises its Exchange Right and
holds only the Securities or only the Warrants, the investor
will lose the benefit of principal protection at maturity and
could receive substantially less than the amount of its initial
investment.
£
No Periodic
Payments. The
Certificates do not offer current income, which means that
investors do not receive any periodic interest or other periodic
payments on the Certificates. Instead of a periodic fixed or
floating rate of interest, return on the Certificates is paid at
maturity and is based upon the appreciation, if any, of the
value of the Global Index Basket, subject to a Participation
Rate of 85%. In addition, you will not receive any dividend
payments or other distributions, if any, on the stocks included
in the indices that comprise the Global Index
Basket.
£
Limited Equity Index-Linked
Participation. If
you hold the Certificates to maturity, you will be entitled to
receive (i) $10 (your initial investment), plus
(ii) the Supplemental Distribution Amount, which may be
positive or zero, based on the percentage change of the value of
the Global Index Basket, and on the Participation
Rate.
£
Citigroup Inc. Guarantee of
Trust Assets. The
payments under the Certificates will be made to the extent that
Citigroup Funding Inc. makes payments under the Securities and
Warrants, the assets of the Trust. Any payment obligations of
Citigroup Funding under the Securities and Warrants are
guaranteed by its parent company Citigroup
Inc.
£
No Interim Income Recognition; Generally Short-Term Capital
Gain or
Loss. U.S. investors
who make a “mixed straddle” election should not be
required to recognize income or gain until maturity or sale of
the Certificates. Except for the possibility of long-term
capital gain treatment if the Exchange Right described in the
paragraphs below is exercised, upon maturity or sale of the
Certificates, investors should recognize short-term capital gain
or loss, regardless of how
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long
they have held the Certificates. U.S. investors can make
the mixed straddle election by complying with the identification
requirements described in the prospectus and pricing supplement
related to this offering and by filing IRS Form 6781
attached to it. Prospective investors should consult their tax
advisors.
Beginning on the
date the Certificates are issued and ending on the date that is
one business day prior to the Valuation Date, you will have the
right to exchange each Certificate you hold for a pro rata
portion of the assets of the Trust, which consist of the
Securities and Warrants issued by Citigroup Funding, upon proper
notice to the trustee. You cannot recognize long-term capital
gain from your investment in the Certificates unless you
exercise your Exchange Right, then dispose of either the
Securities or the Warrants, and then hold the remaining
instrument for more than one year after that disposition.
Neither the
Securities nor the Warrants are principal protected. You should
be aware that if you choose to exercise your Exchange Right and
hold only the Securities or only the Warrants, you will lose the
benefit of principal protection at maturity and may receive
substantially less than the amount of your initial investment in
the Certificates.
In order to exercise
your Exchange Right, your brokerage account must be approved for
options trading. You should consult with your financial advisor
to determine whether your brokerage account would meet the
options trading requirements.
Types
of Investors
The Certificates are
hybrid investments that combine characteristics of equity and
fixed-income instruments. They may be an appropriate investment
for an investor seeking growth potential on a
principal-protected basis and willing to forego current income.
This type of investor may include, but is not limited to:
£
Fixed-income
investors currently invested in zero coupon bonds who are
seeking an opportunity to earn potentially higher equity
index-linked returns.
£
Conservative equity
investors who wish to participate in the upside potential of
broad-based equity market indices, while limiting their exposure
to the downside.
£
Investors who can
hold the Certificates for approximately five years.
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Commissions
and Fees
Citigroup
Global Markets Inc., an affiliate of Citigroup Funding and the
underwriter of the sale of the Certificates, will receive an
underwriting fee from Citigroup Funding of $0.325 for each
$10.000 Certificate sold in this offering. Certain dealers,
including Citi International Financial Services, Citigroup
Global Markets Singapore Pte. Ltd. and Citigroup Global Markets
Asia Limited, broker-dealers affiliated with Citigroup Global
Markets, will receive $0.300 from this underwriting fee for each
Certificate they sell. Financial Advisors employed by Smith
Barney, a division of Citigroup Global Markets, will receive a
fixed sales commission of $0.300 from this underwriting fee for
each Certificate they sell. Additionally, it is possible that
Citigroup Global Markets and its affiliates may profit from
expected hedging activity related to this offering, even if the
value of the Certificates declines. You should refer to
“Risk Factors” and “Underwriting” in the
accompanying prospectus and pricing supplement; “Risk
Factors” and “Plan of Distribution” in the
accompanying medium-term notes prospectus supplement; “Risk
Factors” and “Plan of Distribution” in the
accompanying index warrant prospectus supplement; and “Use
of Proceeds and Hedging” and “Plan of
Distribution” in the accompanying prospectus related to
this offering for more information.
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Final
Terms
Issuer:
Safety First Trust Series 2008-3 (the “Trust”).
Certificates:
Principal-Protected Trust Certificates Linked to the Global
Index Basket.
Assets of the Trust:
Equity Index Participation Securities Linked to the Global Index
Basket (the “Securities”) and Equity Index Warrants
Linked to the Global Index Basket (the “Warrants”),
both issued by Citigroup Funding.
Guarantee:
Any payments due on the Securities and Warrants are fully and
unconditionally guaranteed by Citigroup Inc., Citigroup
Funding’s parent company. Citigroup Inc. and Citigroup
Funding will also guarantee any payments due on the Certificates
to the extent of funds available at the Trust.
Rating of the Issuer’s Obligations:
Aa3/AA- (Moody’s/S&P) based upon the Citigroup Inc.
guarantee and subject to change during the term of the
Certificates, the Securities and the Warrants
Principal Protection:
100% if you hold the Certificates, or both the Securities and
the Warrants received upon exercise of your Exchange Right, on
the Maturity Date.
A basket based on the values of the S&P
500®
Index, the Dow Jones EURO STOXX
50®
Index and the S&P BRIC
40®
Index, initially weighted approximately one-third each. The
percentage of the value of the Global Index Basket represented
by each index will vary over the term of the Certificates.
Issue Price:
$10 per Certificate.
Coupon:
None.
Payment at Maturity on the Certificates:
For each $10 Certificate, $10 plus a Supplemental Distribution
Amount, which may be positive or zero.
Supplemental Distribution Amount:
For each $10 Certificate, $10 × Basket Return ×
Participation Rate, provided that the Supplemental Distribution
Amount will not be less than zero.
Basket Return:
Will equal the following fraction, expressed as a percentage:
Ending
Value - Starting Value
Starting
Value
Starting Value:
100.
Ending Value:
The closing value of the Global Index Basket on the Valuation
Date.
Participation Rate:
85%.
Exchange Right:
Holders of the Certificates will have the right to exchange,
beginning on the Issue Date and ending on the date that is one
business day prior to the Valuation Date, each Certificate for a
pro rata portion of the assets of the Trust (each
Certificate is exchangeable into one Security and one Warrant).
On the maturity date of the Securities or exercise date of the
Warrants, which will be the same date as the Maturity Date of
the Certificates,
£ each
Security will pay $10 plus a Security Return Amount; and
£ each
Warrant will pay zero if the Basket Return is positive or zero,
and pay a positive amount equal to $10 × the percentage
decrease represented by the Basket Return if the Basket Return
is negative.
In order to exercise your Exchange Right, your brokerage account
must be approved for options trading. You should consult with
your financial advisor to determine whether your brokerage
account would meet the options trading requirements. If you
choose to exercise your Exchange Right and hold only the
Securities or only the Warrants, you will lose the benefit of
principal protection at maturity.
Security Return Amount:
If the Basket Return is positive, the Security Return Amount for
each security will equal the product of (a) $10, (b) the
percentage increase in the Global Index Basket and (c) the
Participation Rate.
If the Basket Return is zero or negative, the Security Return
Amount will equal the product of (a) $10 and (b) the percentage
decrease in the Global Index Basket. Because an investor’s
participation in the depreciation of the Global Index Basket is
not limited to the Participation Rate, if the Ending Value is
less than the Starting Value, the investor will participate
fully in the depreciation of the Global Index Basket.
Listing:
The Certificates have been approved for listing on the American
Stock Exchange under the symbol “AHB,” subject to
official notice of issuance. The Securities and the Warrants
will not be listed on any exchange.
Purchase Price and
Per
Certificate Total
Proceeds to Issuer:
Public Offering
Price: $10.000 $21,540,000
Underwriting
Discount $ 0.325 $ 700,050
(to be paid by Citigroup
Funding and which
includes the Sales
Commission described
below):
Proceeds to Safety
First $10.000 $21,540,000
Trust Series 2008-3:
Sales Commission Earned:
$0.300 per Certificate for each Certificate sold by a Smith
Barney Financial Advisor.
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Key
Benefits
£
Growth
Potential. The
Supplemental Distribution Amount payable at maturity is based on
the Ending Value of the Global Index Basket on the Valuation
Date, enabling you to participate in 85% of the potential
increase in the value of the Global Index Basket during the term
of the Certificates without directly investing in the indices
comprising the Global Index Basket or having to acquire each of
the component stocks of the indices.
£
Capital
Preservation. At
maturity, unless you have exercised your Exchange Right, we will
pay you at least the principal amount of the Certificates
regardless of the performance of the Global Index Basket.
£
Diversification. The
Certificates are linked to the Global Index Basket and may allow
you to diversify an existing portfolio mix of stocks, bonds,
mutual funds and cash.
£
No Interim Income
Recognition. If
you make the tax elections as described in detail in the
prospectus and pricing supplement related to this offering, you
should not be required to accrue income or to take into account
any gain or loss with respect to the Certificates until maturity
or disposition of the Certificates.
Key
Risks
An investment in the Certificates, Securities and Warrants
involves significant risks. While some of the risk
considerations are summarized below, please review the
“Risk Factors” section of the prospectus and pricing
supplement related to this offering for a full description of
risks.
£
Appreciation Will Be Limited and May Be
Zero. If
the Ending Value is greater than the Starting Value, your
participation in the appreciation of the Global Index Basket
will be limited to the Participation Rate, 85% of the Basket
Return. In addition, if the Ending Value is equal to or less
than the Starting Value, the payment you receive at maturity
will be limited to the amount of your initial investment in the
Certificates, even if the closing value of the Global Index
Basket is greater than the Starting Value at one or more times
during the term of the Certificates or if the closing value of
the Global Index Basket at maturity exceeds its Starting Value.
Because of the possibility of limited or zero appreciation of
your initial investment, the Certificates may provide less
opportunity for appreciation than an investment in a similar
security that would allow you to participate fully in the
appreciation of the Global Index Basket or in some or all of the
stocks included in the S&P
500®
Index, the Dow Jones EURO STOXX
50®
Index and the S&P BRIC
40®
Index.
£
No Periodic
Payments. You
will not receive any periodic payments of interest or any other
periodic payments on the Certificates. In addition, you will not
be entitled to receive dividend payments or other distributions,
if any, made on the stocks included in the indices comprising
the Global Index Basket.
£
Potential for a Lower Comparable
Yield. The
Certificates do not pay any periodic interest. As a result, even
if the Ending Value is greater than the Starting Value, the
effective yield on the Certificates may be less than that which
would be payable on a conventional fixed-rate debt security of
Citigroup Funding of comparable maturity.
£
Secondary Market May Not Be
Liquid. The
Certificates have been approved for listing on the American
Stock Exchange under the symbol “AHB,” subject to
official notice of issuance, but the secondary market may not be
liquid and may not continue for the term of the Certificates. In
addition, neither the Securities nor the Warrants will be listed
on any exchange. Although Citigroup Global Markets intends to
make a market in the Certificates, Securities and Warrants, it
is not obligated to do so.
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£
Resale Value of the Certificates May Be Lower Than Your
Initial
Investment. Due
to, among other things, changes in the price of and dividend
yields on the stocks included in the indices comprising the
Global Index Basket, interest rates, the earnings performance of
the issuers of the stocks included in the indices, other
economic conditions and Citigroup Funding’s and Citigroup
Inc.’s perceived creditworthiness, the Certificates may
trade at prices below their initial issue price of $10 per
Certificate. You could receive substantially less than the
amount of your initial investment if you sell your Certificates
prior to maturity.
£
Fees and
Conflicts. Citigroup
Global Markets Inc. and its affiliates involved in this offering
are expected to receive compensation for activities and services
provided in connection with the Certificates. Further, Citigroup
Funding expects to hedge its obligations under the Certificates
through the trading of the stocks included in the indices
comprising the Global Index Basket or other instruments, such as
options, swaps or futures, based upon the Global Index Basket,
the indices comprising the Global Index Basket or the stocks
included in the indices by one or more of its affiliates. Each
of Citigroup Funding’s or its affiliates’ hedging
activities and Citigroup Global Market’s role as the
Calculation Agent for the Certificates may result in a conflict
of interest.
£
The United States Federal Income Tax Consequences of the
Certificates Are
Uncertain. No
statutory, judicial or administrative authority directly
addresses the characterization of the Certificates or
instruments similar to the Certificates for U.S. federal
income tax purposes. As a result, significant aspects of the
U.S. federal income tax consequences of an investment in
the Certificates or the Securities are not certain. No ruling is
being requested from the Internal Revenue Service with respect
to the Certificates and no assurance can be given that the
Internal Revenue Service will agree with the conclusions
expressed under “Certain U.S. Federal Income Tax
Considerations” in this offering summary or under
“What Are the United States Federal Income Tax Consequences
of Investing in the Certificates?” and “Certain United
States Federal Income Tax Considerations” in the prospectus
and pricing supplement related to this offering, and that any
such guidance could have retroactive effect.
£
Citigroup Inc. Credit
Risk. The
Securities and Warrants are subject to the credit risk of
Citigroup Inc., Citigroup Funding’s parent company and the
guarantor of any payments due on the Securities and Warrants.
£
Neither the Securities nor the Warrants are Principal
Protected
Individually. If
you exercise your Exchange Right, you will receive a pro rata
portion of the assets of the Trust, which consist of the
Securities and the Warrants. In order to exercise your Exchange
Right, your brokerage account must be approved for options
trading. You should consult with your financial advisor to
determine whether your brokerage account would meet the options
trading requirements. Neither the Securities nor the Warrants
are principal protected if held individually. Thus, if you
choose to exercise your Exchange Right and hold only the
Securities or only the Warrants, you will lose the benefit of
principal protection at maturity and could receive substantially
less than the amount of your initial investment. If you hold
only the Securities, your investment may result in a loss if the
Ending Value is less than the Starting Value. If you hold only
the Warrants, the payment on the Warrants will be zero unless
the Ending Value is less than the Starting Value.
£
Additional Risks Upon Exchange If You Hold Only the
Securities or Only the
Warrants. If
you exercise your Exchange Right and hold only the Securities or
only the Warrants, you will be subject to other risks in
addition to the loss of principal protection at maturity. In the
case of the Securities, these additional risks include that
although any return on your investments will be limited to the
Participation Rate, 85% of the Basket Return, your participation
in the depreciation of the Global Index Basket is not similarly
limited. Thus, if the Ending Value of
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the Global Index
Basket is less than the Starting Value, you will participate
fully in the depreciation of the Global Index Basket. In the
case of the Warrants, these additional risks include that the
Warrants may lose substantially all their value due to
relatively small increases in the value of the Global Index
Basket, and all their value due to an increase above the
Starting Value. In addition, the Securities and the Warrants may
trade at prices substantially below their initial purchase
prices.
Certain
U.S. Federal Income Tax Considerations
The following
summarizes certain federal income tax considerations for
U.S. investors that purchase the Certificates at the
initial offering and hold the Certificates as capital assets. In
general, a U.S. investor will be treated as owning a pro
rata share of the assets of the Trust. Under the treatment
that each holder will agree to with the Trust and Citigroup
Funding, the Securities and the Warrants will be treated as two
separate financial instruments.
A
U.S. holder’s tax treatment may depend on the
applicability of certain elections. The Trust will make a
“mixed straddle” election on behalf of all holders of
the Certificates by identifying on its records the Securities
and the Warrants as a mixed straddle and by filing IRS
form 6781. The Trust also will make an “identified
straddle” election on behalf of all holders of the
Certificates by identifying on its records each Security and
each Warrant as a separate identified straddle. It is unclear,
however, whether such elections made by the Trust on behalf of a
holder will be effective. Therefore, it is generally advisable
that U.S. investors also make a mixed straddle election and
an identified straddle election by complying with the
identification requirements described in the prospectus and
pricing supplement and by filing IRS form 6781 (applicable
to the mixed straddle election) attached thereto. Assuming that
the “mixed straddle” election and the identified
straddle election will apply, the Certificates will be taxed as
follows:
£
A U.S. holder
will not be required to accrue income or take into account gain
with respect to Certificates until maturity or disposition.
£
At maturity or upon
a sale of all of a U.S. holder’s Certificates, such
holder will recognize net capital gain or loss equal to the
difference between the amount of cash received and the amount
that U.S. holder paid for the Certificates. Such capital
gain or loss will be short-term gain or loss regardless of how
long the U.S. holder has held the Certificates.
£
If a
U.S. holder exchanges its Certificates for Securities and
Warrants and disposes of one but not the other, such holder will
have long-term capital gain or loss at maturity or on
disposition of the Securities or the Warrants only if the
U.S. holder has held the Securities or the Warrants for
more than one year after the disposition of the other
instrument, respectively. In order to exercise your Exchange
Right, your brokerage account must be approved for options
trading. You should consult with your financial advisor to
determine whether your brokerage account would meet the options
trading requirements. You should be aware, however, that if you
hold only the Securities or only the Warrants, you will lose the
benefit of principal protection at maturity. Losses realized on
the disposition of the Securities or the Warrants may be
required to be capitalized into the tax basis of the Warrants or
the Securities (as the case may be) retained by the
U.S. holder.
No statutory,
judicial or administrative authority addresses the
characterization of the Securities and the Warrants or similar
instruments for U.S. federal income tax purposes. As a
result, significant aspects of the U.S. federal income tax
consequences of an investment in the Certificates are not
certain. The IRS and U.S. Treasury Department recently
issued a Notice (the “Notice”) that requests public
comments on a comprehensive list of tax policy issues raised by
prepaid forward contracts, which include financial instruments
similar to the Certificates and the
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Securities.
The Notice contemplates that such instruments may become subject
to taxation on a current accrual basis under one or more
possible approaches, including mark-to-market methodology; a
regime similar to the Contingent Payment Regulations;
categorization of prepaid forward contracts as debt; and
treatment of prepaid forward contracts as “constructive
ownership” transactions discussed below. The Notice also
contemplates that all (or significant portions) of an
investor’s returns under prepaid forward contracts could be
taxed at ordinary income rates (as opposed to capital gains
rates). It is currently impossible to predict what guidance, if
any, will be issued as a result of the Notice, and whether any
such guidance could have retroactive effect. In addition,
legislation recently has been introduced for consideration in
the United States Congress that, if enacted into law, would
require current accrual of interest income on prepaid derivative
contracts with a term of more than one year (which would include
financial instruments similar to the Securities and may include
financial instruments similar to the Certificates) acquired
after the date of the legislation’s enactment. The
legislation also would implement special income accrual rules
for publicly traded prepaid derivative contracts. The schedule
for consideration of this legislation and the outcome of the
legislative process currently is uncertain. Accordingly, a
prospective investor (including a tax exempt investor) in the
Certificates should consult its own tax advisor in determining
the tax consequences of an investment in the Certificates.
In the case of a
holder of the Certificates that is not a U.S. person, any
gain realized upon the sale, maturity, exchange or other taxable
disposition of the Certificates, the Securities or the Warrants
generally will not be subject to U.S. income or withholding
tax provided that: (i) the holder complies with applicable
certification requirements (including in general the furnishing
of an IRS
form W-8
or substitute form), (ii) in the case of an individual,
such individual is not present in the United States for
183 days or more in the taxable year of the sale or other
disposition or the gain is not attributable to a fixed place of
business maintained by such individual in the United States, and
(iii) the holder does not own, actually or constructively,
10% or more of the total combined voting power of all classes of
the Citigroup Funding’s stock entitled to vote, and are not
a controlled foreign corporation related, directly or
indirectly, to Citigroup Funding through stock ownership.
In the Notice
discussed above, the IRS and U.S. Treasury Department
specifically question whether, and to what degree, payments (or
deemed accruals) in respect of a prepaid forward contract should
be subject to withholding. Accordingly, it is possible that
future guidance could be issued as a result of the Notice
requiring us to withhold on payments made to
non-U.S. Holders
under the Certificates or the Securities.
You should refer to the prospectus and pricing supplement
related to this offering for additional information relating to
U.S. federal income tax and consult your own tax advisors
to determine tax consequences particular to your situation.
The
Global Index Basket
General. The
Global Index Basket was established on the Pricing Date and will
be calculated by Citigroup Global Markets, as Calculation Agent.
The Global Index Basket will represent the values of three
equity indices from the Pricing Date through the Valuation Date:
the S&P
500®
Index, the Dow Jones EURO STOXX
50®
Index and the S&P BRIC
40®
Index. The indices track the price return of the broad equity
markets in each respective geographic region.
The three indices
included in the Global Index Basket were initially weighted
approximately one-third each, as set forth below, based on the
value of each index on the Pricing Date, as
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determined
by the Calculation Agent, to achieve a Starting Value of 100 for
the Global Index Basket on that date:
Underlying
Index
Percentage of
Basket
Initial Index
Value
Basket
Composition Ratio
S&P
500®
Index
33.4
%
1,266.84
0.026365
Dow Jones EURO STOXX
50®
Index
33.3
%
3,280.41
0.010151
S&P BRIC
40®
Index
33.3
%
2,480.65
0.013424
The value of the
Global Index Basket on any index business day, including the
Valuation Date, will equal the sum of the products of each
index’s closing level and that index’s basket
composition ratio. The value of the Global Index Basket will be
published by the New York Stock Exchange under the symbol
“CGAHB.” However, for purposes of calculating amounts
due to holders of the Certificates, the Securities and the
Warrants, the value of the Global Index Basket will be
determined as described under “Description of the Global
Index Basket” in the prospectus and pricing supplement
related to this offering.
The following graph
illustrates the hypothetical historical performance of the
Global Index Basket on each index business day, commencing on
January 2, 2003 and ending on August 25, 2008. Each
value was calculated as if the Global Index Basket had been
created on January 2, 2003 with an initial value of 100.
The Global Index Basket will actually be established on the
Pricing Date with an initial value of 100. The hypothetical
historical closing values set forth below in the graph have not
been reviewed or verified by Standard & Poor’s
(“S&P”), Dow Jones & Company, Inc.
(“Dow Jones”), STOXX Limited (“STOXX”) or
any other independent third party.
Actual historical
closing values of each component index were used to calculate
the hypothetical historical closing values of the Global Index
Basket. However, these hypothetical historical closing values
should not be taken as an indication of the actual composition
of the Global Index Basket on the Pricing Date or the future
performance of the Global Index Basket. Any hypothetical
historical upward or downward trend in the value of the Global
Index Basket during any period set forth below is not an
indication that the Global Index Basket is more or less likely
to increase or decrease at any time during the term of the
Certificates.
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The source of the
data on each component index used to compute the hypothetical
historical closing values of the Global Index Basket is
Bloomberg.
You should refer to
the prospectus and pricing supplement related to this offering
for additional information on the Global Index Basket and each
component index, including its respective makeup, method of
calculation and changes in its components. All such disclosures
in the prospectus and pricing supplement are derived from
publicly available information. None of the Trust, Citigroup
Funding, Citigroup Inc., Citigroup Global Markets or any of the
trustees assumes any responsibility for the accuracy or
completeness of such information. You should also be aware that
an investment in the Certificates does not entitle you to any
dividends, voting rights or any other ownership or other
interest in respect of the stocks included in the indices
comprising the Global Index Basket.
License
Agreements. Citigroup
Funding or its affiliates have entered into a non-exclusive
license arrangement with the publisher of each index comprising
the Global Index Basket, providing for the license to Citigroup
Inc., Citigroup Funding and its affiliates, in exchange for a
fee, of the right to use each index in connection with certain
financial instruments, including the Certificates, the
Securities and the Warrants. Each license agreement provides
that the following language, as applicable must be stated in
this offering summary.
The Certificates,
the Securities and the Warrants are not sponsored, endorsed,
sold or promoted by S&P. S&P makes no representation
or warranty, express or implied, to the holders of the
Certificates, the Securities or the Warrants or any member of
the public regarding the advisability of investing in securities
generally or in the Certificates, the Securities or the Warrants
particularly. S&P’s only relationship to Citigroup
Funding and its affiliates (other than transactions entered into
in the ordinary course of business) is the licensing of certain
trademarks, trade names and service marks of S&P and of the
S&P
500®
Index, which is determined, composed and calculated by S&P
without regard to Citigroup Funding, its affiliates or the
Certificates, the
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Securities or the
Warrants. S&P has no obligation to take the needs of
Citigroup Funding, its affiliates or the holders of the
Certificates, the Securities or the Warrants into consideration
in determining, composing or calculating the S&P
500®
Index. S&P is not responsible for and has not participated
in the determination of the timing of, prices at or quantities
of the Certificates, the Securities or the Warrants to be issued
or in the determination or calculation of the equation by which
the Certificates, the Securities or the Warrants are to be
converted into cash. S&P has no obligation or liability in
connection with the administration, marketing or trading of the
Certificates, the Securities or the Warrants.
S&P DOES NOT
GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500®
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO
BE OBTAINED BY CITIGROUP FUNDING, HOLDERS OF THE CERTIFICATES,
THE SECURITIES OR THE WARRANTS, OR ANY OTHER PERSON OR ENTITY
FROM THE USE OF THE S&P
500®
INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P
500®
INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE
NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS
BETWEEN S&P AND CITIGROUP FUNDING.
STOXX and Dow Jones
have no relationship to Citigroup Funding, other than the
licensing of the use of the Dow Jones EURO STOXX
50®
Index and the related trademarks as the case may be for use in
connection with the calculation of the Certificates, the
Securities or the Warrants.
STOXX and Dow Jones
do not:
£
sponsor, endorse,
sell or promote the Certificates, the Securities or the Warrants;
£
make investment
recommendations that any person invest in the Certificates, the
Securities or the Warrants or any other securities;
£
have any
responsibility or liability for or make any decisions about the
timing, amount or pricing of the Certificates, the Securities or
the Warrants;
£
have any
responsibility or liability for the administration, management
or marketing of the Certificates, the Securities or the
Warrants; or
£
consider the
Certificates, the Securities or the Warrants or the owners of
the Certificates, the Securities or the Warrants in determining,
composing or calculating the Dow Jones EURO STOXX
50®
Index or have any obligation to do so.
NEITHER STOXX NOR
DOW JONES GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
DOW JONES EURO STOXX
50®
INDEX OR ANY DATA INCLUDED THEREIN AND NEITHER STOXX NOR DOW
JONES SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR
INTERRUPTIONS THEREIN, NEITHER STOXX NOR DOW JONES MAKES ANY
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
CITIGROUP FUNDING, OWNERS OF THE CERTIFICATES, THE SECURITIES OR
THE WARRANTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
INDEX OR ANY DATA INCLUDED THEREIN. NEITHER DOW JONES NOR STOXX
MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE
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FOREGOING, IN NO
EVENT SHALL DOW JONES OR STOXX HAVE ANY LIABILITY FOR ANY LOST
PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF
SUCH DAMAGES.
The license
agreement with STOXX and Dow Jones is solely for the benefit of
Citigroup Funding and its affiliates, and not for the benefit of
the owners of the Certificates, the Securities or the Warrants
or any other third parties.
The Certificates,
the Securities and the Warrants are not sponsored, endorsed,
sold or promoted by S&P. S&P makes no representation
or warranty, express or implied, to the holders of the
Certificates, the Securities or the Warrants or any member of
the public regarding the advisability of investing in securities
generally or in the Certificates, the Securities or the Warrants
particularly. S&P’s only relationship to Citigroup
Funding Inc. is the licensing of certain trademarks, trade names
and service marks of S&P and of the S&P BRIC
40®
Index, which is determined, composed and calculated by S&P
without regard to Citigroup Funding Inc. or the Notes. S&P
has no obligation to take the needs of Citigroup Funding Inc. or
the holders of the Certificates, the Securities or the Warrants
into consideration in determining, composing or calculating the
S&P BRIC
40®
Index. S&P is not responsible for and has not participated
in the determination of the timing of, prices at, or quantities
of the Certificates, the Securities or the Warrants to be
issued. S&P has no obligation or liability in connection
with the administration, marketing or trading of the
Certificates, the Securities or the Warrants.
S&P DOES NOT
GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
BRIC 40®
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO
BE OBTAINED BY CITIGROUP FUNDING, HOLDERS OF THE CERTIFICATES,
THE SECURITIES OR THE WARRANTS, OR ANY OTHER PERSON OR ENTITY
FROM THE USE OF THE S&P BRIC
40®
INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P BRIC
40®
INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE
NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS
BETWEEN S&P AND CITIGROUP FUNDING.
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Hypothetical
Maturity Payment Examples
The
examples of hypothetical maturity payments set forth below are
intended to illustrate the effect of different Ending Values on
the amount payable on the Certificates at maturity. All of the
hypothetical examples are based on the following
assumptions:
£ Issue
Price:
$10.00
£ Term
of the
Certificates:
5 years
£ Starting
Value:
100
£ Participation
Rate:
85%
£ The
Certificates are held to maturity and are not exchanged for the
Securities and the Warrants.
As
shown by the examples below, if the Basket Return is 0% or less,
you will receive an amount at maturity equal to $10.00 per
Certificate, the amount of your initial investment in the
Certificates. If the Basket Return is greater than 0%, you will
receive an amount at maturity that is greater than your initial
investment in the Certificates.
Supplemental
Total
Annualized
Distribution
Maturity
Return
on the
Return
on the
Ending
Value
Basket
Return
Amount(1)
Payment(2)
Certificates
Certificates(3)
30
.0
−70.00
%
$
0.00
$
10.00
0.00
%
0.00
%
40
.0
−60.00
%
$
0.00
$
10.00
0.00
%
0.00
%
50
.0
−50.00
%
$
0.00
$
10.00
0.00
%
0.00
%
60
.0
−40.00
%
$
0.00
$
10.00
0.00
%
0.00
%
70
.0
−30.00
%
$
0.00
$
10.00
0.00
%
0.00
%
75
.0
−25.00
%
$
0.00
$
10.00
0.00
%
0.00
%
80
.0
−20.00
%
$
0.00
$
10.00
0.00
%
0.00
%
85
.0
−15.00
%
$
0.00
$
10.00
0.00
%
0.00
%
90
.0
−10.00
%
$
0.00
$
10.00
0.00
%
0.00
%
95
.0
−5.00
%
$
0.00
$
10.00
0.00
%
0.00
%
97
.5
−2.50
%
$
0.00
$
10.00
0.00
%
0.00
%
100
.0
0.00
%
$
0.00
$
10.00
0.00
%
0.00
%
102
.5
2.50
%
$
0.21
$
10.21
2.13
%
0.42
%
105
.0
5.00
%
$
0.43
$
10.43
4.25
%
0.84
%
107
.5
7.50
%
$
0.64
$
10.64
6.38
%
1.24
%
110
.0
10.00
%
$
0.85
$
10.85
8.50
%
1.64
%
115
.0
15.00
%
$
1.28
$
11.28
12.75
%
2.43
%
120
.0
20.00
%
$
1.70
$
11.70
17.00
%
3.19
%
125
.0
25.00
%
$
2.13
$
12.13
21.25
%
3.93
%
130
.0
30.00
%
$
2.55
$
12.55
25.50
%
4.65
%
140
.0
40.00
%
$
3.40
$
13.40
34.00
%
6.03
%
150
.0
50.00
%
$
4.25
$
14.25
42.50
%
7.34
%
160
.0
60.00
%
$
5.10
$
15.10
51.00
%
8.59
%
(1)
Supplemental
Distribution Amount = $10.00 × Basket Return ×
Participation Rate, provided that the Supplemental Distribution
Amount will not be less than zero.
(2)
Maturity Payment =
$10.00 + Supplemental Distribution
Amount.
(3)
Compounded
annually.
The
examples above are for purposes of illustration only. The actual
maturity payment will depend on the actual Supplemental
Distribution Amount, which, in turn, will depend on the actual
Ending Value and Participation Rate.
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ERISA
and IRA Purchase Considerations
Employee benefit
plans subject to ERISA, entities the assets of which are deemed
to constitute the assets of such plans, governmental or other
plans subject to laws substantially similar to ERISA and
retirement accounts (including Keogh, SEP and SIMPLE plans,
individual retirement accounts and individual retirement
annuities) are permitted to purchase the Certificates, the
Securities and the Warrants as long as either (A) (1) no
Citigroup Global Markets affiliate or employee is a fiduciary to
such plan or retirement account that has or exercises any
discretionary authority or control with respect to the assets of
such plan or retirement account used to purchase the
Certificates, the Securities or the Warrants or renders
investment advice with respect to those assets, and
(2) such plan or retirement account is paying no more than
adequate consideration for the Certificates, the Securities or
the Warrants or (B) its acquisition and holding of the
Certificates, the Securities or the Warrants is not prohibited
by any such provisions or laws or is exempt from any such
prohibition.
However, individual
retirement accounts, individual retirement annuities and Keogh
plans, as well as employee benefit plans that permit
participants to direct the investment of their accounts, will
NOT be permitted to purchase or hold the Certificates, the
Securities or the Warrants if the account, plan or annuity is
for the benefit of an employee of Citigroup Global Markets or a
family member and the employee receives any compensation (such
as, for example, an addition to bonus) based on the purchase of
the Certificates, the Securities or the Warrants by the account,
plan or annuity.
You should refer to the section “ERISA Matters” in
the prospectus and pricing supplement related to this offering
for more information.
Additional
Considerations
If the closing value
of any of the indices comprising the Global Index Basket is not
available on the Valuation Date, the Calculation Agent may
determine the Ending Value in accordance with the procedures set
forth in the prospectus and pricing supplement related to this
offering. In addition, if any of the indices comprising the
Global Index Basket is discontinued, the Calculation Agent may
determine the Ending Value by reference to a successor index or,
if no successor index is available, in accordance with the
procedures last used to calculate the relevant index prior to
any such discontinuance. You should refer to the sections
“Description of the Certificates — Supplemental
Distribution Amount” and “— Discontinuance
of an Index Comprising the Global Index Basket” in the
prospectus and pricing supplement for more information.
Citigroup Global
Markets is an affiliate of the Trust and Citigroup Funding.
Accordingly, the offering will conform to the requirements set
forth in Rule 2810 of the NASD Conduct Rules adopted by the
Financial Industry Regulatory Authority regarding direct
participation programs.
Client accounts over
which Citigroup Inc. or its affiliates have investment
discretion are NOT permitted to purchase the Certificates,
either directly or indirectly.
“Standard & Poor’s,”“S&P,”“S&P 500,”“Standard & Poor’s 500,”“S&P BRIC 40” and “Standard &
Poor’s BRIC 40” are trademarks of The McGraw-Hill Companies, Inc. “Dow Jones” is a service mark of
Dow Jones & Company, Inc. (“Dow Jones”). “STOXX,”“EURO STOXX,” and “EURO STOXX 50” are trademarks
and/or service marks of STOXX Limited (“STOXX”). These trademarks and service marks have been
licensed for use for certain purposes by Citigroup Funding Inc. or one of its affiliates. None of
the Certificates, the Securities or the Warrants have been passed on by Standard & Poor’s, the
McGraw-Hill Companies, Dow Jones or STOXX. None of the Certificates, the Securities or the Warrants
are sponsored, endorsed, sold or promoted by Standard & Poor’s, the McGraw-Hill Companies, Dow
Jones or STOXX and none of the above makes any warranties or bears any liability with respect
thereto.
