TERMS
AGREEMENT
February 5,
2007
Citigroup
Inc.
399 Park
Avenue
New York, New
York 10043
Attention: Assistant Treasurer
Ladies and
Gentlemen:
We understand
that Citigroup Inc., a Delaware corporation (the
“Company”), proposes to issue and sell US$1,250,000,000
aggregate principal amount of its subordinated debt securities (the
“Securities”). Subject to the terms and conditions set
forth herein or incorporated by reference herein, we, Citigroup
Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs
& Co., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner
& Smith, Inc., Banc of America Securities, Barclays Capital
Inc., Bear, Stearns & Co. Inc., Jackson Securities LLC, Muriel
Siebert & Co, Inc. and UBS Securities LLC, 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
99.169% of the principal amount thereof, plus accrued interest, if
any, from the date of issuance. The Closing Date shall be February
12, 2007, at 8:30 A.M. The closing shall take place at the
Corporate Law offices of the Company located at 425 Park Avenue,
New York, New York 10043.
The Securities
shall have the following terms:
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5.500%
Subordinated Notes Due 2017
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February 15,
2017
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Semi-annually
on the 15th day of each February and August commencing August 15,
2007
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99.619% of the
principal amount thereof, plus accrued interest, if any, from
February 12, 2007
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The Securities
are not redeemable by the Company prior to Maturity, except upon
the occurrence of certain events involving United States taxation,
as set forth in the Prospectus dated March 2, 2006
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The February 1
or August 1 preceding each Interest Payment Date
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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 The
Depository Trust Company (“DTC”) 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 DTC, Euroclear
Bank S.A./N.V., as operator of the Euroclear System, and
Clearstream International 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 United States
dollars. The relevant provisions of Article Eleven of the Indenture
relating to defeasance shall apply to the Securities.
All the provisions contained in the document
entitled “Citigroup Inc.— Debt Securities —
Underwriting Agreement — Basic Provisions” and dated
March 2, 2006 (the “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 Basic Provisions had been
set forth in full herein. Terms defined in the Basic Provisions are
used herein as therein defined.
The Company agrees to use its best efforts to
have the Securities approved for listing on the Luxembourg Stock
Exchange and to maintain such listing so long as any of the
Securities are outstanding, provided, however that:
(a) if it is impracticable or unduly burdensome, in
the good faith determination of the Company, to maintain such
listing due to changes in listing requirements occurring after the
date of the Prospectus Supplement, or
(b) if the Transparency Directive (as defined in the
Prospectus Supplement) is implemented in Luxembourg in a manner
that would require the Company to publish financial information
according to accounting principles or standards that are materially
different from United States generally accepted accounting
principles,
the Company may
de-list the Securities from the Luxembourg Stock Exchange and shall
use its reasonable best efforts to obtain an alternative admission
to listing, trading and/or quotation of the Securities by another
listing authority, exchange or system within or outside the
European Union as it may decide. If such an alternative admission
is not available or is, in the Company’s opinion, unduly
burdensome, such an alternative admission will not be obtained, and
the Company shall have no further obligation in respect of any
listing, trading or quotation for the Securities.
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 2720 of the Conduct
Rules of the National Association of Securities Dealers,
Inc.
In relation to each Member State of the European
Economic Area which has implemented the Prospectus Directive (each,
a "Relevant Member State"), each underwriter has represented and
agreed that with effect from and including the date on which the
Prospectus Directive is implemented in that Relevant Member State
("Relevant Implementation Date") it has not made and will not make
an offer of Securities to the public in that Relevant M
