Citigroup in $1.6 Billion Enhanced TruPS Offering

November 22, 2006

Cleary Gottlieb advised the underwriters, led by Citigroup Global Markets Inc., in an offering of $1.6 billion 6.45% Enhanced Capital Securities (Enhanced TruPS®) issued by Citigroup Capital XVI and guaranteed by Citigroup. The Enhanced TruPS will be listed on the New York Stock Exchange. The offering closed on November 22.

The Enhanced TruPS are “hybrid” securities that combine features of traditional debt — such as regular fixed-rate distributions — and traditional equity — such as subordination in bankruptcy to the claims of holders of debt securities. The sole assets of the trust issuing the Enhanced TruPS are Citigroup-issued junior subordinated debt securities. The junior subordinated debt is “super-subordinated,” ranking junior to all of Citigroup’s senior debt, subordinated debt and junior subordinated debt issued with traditional trust preferred securities. Citigroup is entitled to defer interest payments on the junior subordinated debt, and the trust is entitled to defer distributions on the Enhanced TruPS, for up to 40 consecutive quarters. However, after five years of deferral, Citigroup must sell common stock and use the proceeds to pay the deferred interest, except upon the occurrence of certain events that prevent Citigroup from selling stock. Citigroup had also entered into a capital replacement covenant for the benefit of holders of securities ranking senior to the junior subordinated debt; the covenant prevents Citigroup from redeeming the junior subordinated debt unless it does so with the proceeds from the sale of equity or equity-like securities.

Citigroup Inc., a global financial services company with approximately 200 million customer accounts in over 100 countries, provides financial products and services, including banking, securities brokerage and asset management.