Citigroup in $26.5 Million Offering of TARGETS Linked to Motorola

August 30, 2005

Cleary Gottlieb represented the underwriter, Citigroup Global Markets Inc., in TARGETS Trust XXV’s $26.5 million offering of Targeted Growth Enhanced Terms Securities (TARGETS) due August 15, 2008. The securities are linked to the common stock of Motorola, Inc. Cleary also served as special tax counsel to Citigroup Funding Inc. and Citigroup Inc. in this transaction.

The TARGETS are preferred securities of a trust that owns (1) a forward contract issued by Citigroup Funding Inc., the payout on which is based on the price of Motorola common stock and (2) a portfolio of stripped self-amortizing securities issued by the U.S. Treasury known as Treasury STRIPS. The TARGETS pay quarterly distributions that are much higher than the dividends on Motorola common stock because these distributions are funded largely by the Treasury STRIPS. A significant portion of the quarterly distributions from the Treasury STRIPS is treated as a nontaxable return of capital for U.S. federal income tax purposes. At maturity, the TARGETS pay investors an amount based on the compounded monthly percentage return on Motorola common stock over the term of the TARGETS. The monthly return on Motorola common stock in which investors can participate is subject to a cap of 4.5% and a floor of –11%. As a result of this structure, investors receive tax-advantaged quarterly distributions that are much higher than the dividends they would receive if they owned Motorola common stock directly and partially limit their exposure to any decrease in the value of Motorola common stock, but participate in only a portion of any increase in the value of the stock. The payments due under the TARGETS are fully and unconditionally guaranteed by Citigroup Funding and Citigroup Inc.

Motorola, Inc. is a provider of wireless, broadband and automotive communications technologies and embedded electronic products.