Citigroup in ELKS® Offering Linked to American Depositary Receipts Representing the Preferred Shares of Banco Bradesco S.A.

Cleary Gottlieb represented Citigroup Global Markets Inc., as underwriter, in Citigroup Funding’s $48.3 million offering of Equity LinKed Securities (ELKS ®) due August 24, 2006, and also acted as special tax counsel to the issuer. The offering is linked to American Depositary Receipts representing the preferred shares of Banco Bradesco S.A. (Banco Bradesco ADRs).

Banco Bradesco S.A. provides a wide range of banking and financial products and services in Brazil and abroad to individuals, small to mid-size companies and major local and international corporations and institutions. Banco Bradesco ADRs are negotiable receipts issued by a depositary, Citibank N.A., evidencing American Depositary Shares representing the underlying preferred shares of Banco Bradesco that have been deposited and are held, on behalf of the holders of Banco Bradesco ADRs, by the custodian for the depositary, and/or such other firm or corporation as the depositary may appoint.

ELKS® are debt securities that give investors a much higher semi-annual coupon payment than would a standard Citigroup Funding bond of comparable maturity. At maturity, investors are repaid their full principal amount so long as the price of the underlying stock (or ADR in this case) is greater than a fixed percentage (80% in this case) of its price on the issue date. If the price of the underlying stock declines by 20% or more as of three trading days prior to maturity, investors receive shares of the underlying stock. The payments due under the ELKS are fully and unconditionally guaranteed by Citigroup Inc.

ELKS® also provide a tax benefit to investors because approximately 64% of the semi-annual coupon payment is treated as the payment of an option premium, rather than interest. As a result, (1) investors are not required to include the option premium portion of the first semi-annual coupon payment in income until maturity or other taxable disposition of the ELKS®, and (2) if investors receive stock at maturity, they are not required to include the option premium portion of either semi-annual coupon payment in income at that time, and that portion of the coupon payments instead reduces investors’ basis in the stock.