MLI Coupon Plus (MLI 2011 - 09)
CitiFirst PerformanceOverviewThe MLI is a five year tenor product that is linked to the performance of S&P/ASX 200 Price Index (AS51 Index). The structure offers the potential for fixed income payments, with Conditional Protection if a Call Event occurs or for Investments held until the Maturity Date, provided neither Early Maturity nor a Knock-In Event occurs. Download
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More Information
For further information on structured financial products contact the Citigroup Structured Products Service Centre.| Phone | : | 1300 30 70 70. | |
| : | citifirst.au@citi.com | ||
| : | GPO Box 557 Sydney NSW 2001 | ||
Indicative Terms
- Offer Open: 8 December 2011
- Offer Close: 23 January 2012
- Issue Date: 31 January 2012
- Maturity: 31 January 2017
- Currency: AUD and USD
- Conditional Protection
- Type: Deferred Purchase Agreement
| Issuer: | Citigroup Global Markets Australia Pty Limited | ||
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| Guarantor: | Citigroup Inc. | ||
| Reference Asset: | S&P/ASX 200 Price Index (“ASX 200”) | ||
| Offer Opening Date: | 8 December 2011 at 9:00 am (Sydney time) | ||
| Offer Closing Date: | 23 January 2012 at 5:00 pm (Sydney time) | ||
| Issue Date: | 31 January 2012 | ||
| Scheduled Maturity Date: | 31 January 2017 However, the Investment will terminate before that date if a Call Event or Early Maturity occurs. |
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| Term: | 5 years | ||
| Denomination: | AUD Series: Australian dollars (AUD) USD Series: United States dollars (USD) |
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| Investment: | The MLI is an unlisted and complex financial product that carries investment risk and is an agreement between the Investor and the Issuer governed by the Terms. | ||
| Issue Price: | AUD Series: AUD 1.00 per Unit USD Series: USD 1.00 per Unit |
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| Investment Amount: | The ‘Investment Amount’ is the total amount paid in respect of an Investment by the Investor to the Issuer by the Offer Closing Date. | ||
| Minimum Investment Amount: | AUD Series: AUD 10,000, with multiples of AUD 1,000 thereafter USD Series: USD 10,000, with multiples of USD 1,000 thereafter |
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| Coupon Rate: | The ‘Coupon Rate’ is a simple (non-compounding) fixed rate per annum to be set by the Issuer on the Issue Date and which applies for the investment term. The Coupon Rate will be communicated to all Investors after the Issue Date in the Confirmation. Please refer to the section “What factors affect the Coupon Rate?” in Section 1 for further details, including the impact of a Coupon Rate below the expected range. |
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| AUD Series: If the Units had been issued on 6 December 2011, the Coupon Rate for the AUD Series would have been 8.90% p.a. On that basis, and assuming no significant change in the factors that affect the Coupon Rate, the Coupon Rate determined by the Issuer is expected to be between 8.50% p.a. and 9.30% p.a. for the AUD Series. |
USD Series: If the Units had been issued on 6 December 2011, the Coupon Rate for the USD Series would have been 6.50% p.a. On that basis, and assuming no significant change in the factors that affect the Coupon Rate, the Coupon Rate determined by the Issuer is expected to be between 6.10% p.a. and 6.90% p.a. for the USD Series. |
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| Investors should note that the MLI will not proceed if the relevant Coupon Rate as at the Issue Date is below the low end of the Coupon Rate range set out above. If this occurs, Investors will receive a full refund of their Investment Amount (without interest). | |||
| Coupon Amount: | Subject to Early Maturity or a Call Event occurring, the Coupon Amount is an amount payable quarterly in arrears on each Coupon Payment Date, determined per MLI in accordance with the formula set out below: The Coupon Amount will be paid Quarterly on each Coupon Payment Date, subject to the occurrence of Early Maturity or a Call Event. If Early Maturity or a Call Event occurs, the Investor will not be entitled to receive any Coupon Amounts in respect of Coupon Record Dates occurring after the Early Maturity Date or the Call Event Observation Date on which the Call Event occurs (as applicable). |
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| Coupon Record Dates: | The Coupon Record Dates will be Quarterly throughout the Term (or, if any such date is not a Business Day, the following Business Day) on the dates set out below: AUD Series and USD Series: 30 April 2012, 31 July 2012, 31 October 2012, 31 January 2013, 30 April 2013, 31 July 2013, 31 October 2013, 31 January 2014, 30 April 2014, 31 July 2014, 31 October 2014, 2 February 2015, 30 April 2015, 31 July 2015, 2 November 2015, 1 February 2016, 2 May 2016, 1 August 2016, 31 October 2016 and 31 January 2017 (same date as the Scheduled Maturity Date) |
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| Coupon Payment Dates: | 5 Business Days after each Coupon Record Date. | ||
| Initial Level: | The Official Closing Level of the Reference Asset on the Issue Date. | ||
| Reference Level: | The Official Closing Level of the Reference Asset as at the date on which it is observed. | ||
| Reference Asset Performance: | The amount determined under the following formula and expressed as a percentage: |
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| Call Event*: | A Call Event will occur if the Reference Asset Performance on any Call Event Observation Date is greater than, or equal to, 0%. In other words, if the Reference Asset has performed positively (since the Issue Date) on any Call Event Observation Date, a Call Event occurs. If a Call Event occurs on any Call Event Observation Date:
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| Call Event Observation Dates: | The Call Event Observation Dates start at the end of the 39th month (i.e. 30 April 2015) and Quarterly thereafter. The Call Event Observation Dates are set out below: AUD Series and USD Series: 30 April 2015, 31 July 2015, 2 November 2015, 1 February 2016, 2 May 2016, 1 August 2016, 31 October 2016, 31 January 2017 (same date as the Scheduled Maturity Date) |
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| Knock-In Event†: | A ‘Knock-In Event’ will occur if the Reference Asset Performance on any Trading Day during the Term up to, and including, the Maturity Date is equal to, or less than, the Knock-In Event Level. The risk to investors of a Knock-In Event occurring is that it affects the Final Value per Unit and Investors may lose some, or all, of their Investment Amount. However if Call Event occurs after a Knock-In Event, the Call Event will over-ride the Knock-In Event when determining the Final Value per Unit. If a Knock-In Event does not occur and the MLI is held to the Maturity Date, Conditional Protection° applies, as explained on the next page. For an explanation of the risks associated with a Knock-In Event and Conditional Protection° please refer to Section 4 of this PDS. |
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| Knock-In Event Level: | The Knock-In Event Level is -40%. Numerically, a Knock-In Event will occur if: |
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| Final Value per Unit: | The Final Value per Unit is linked to the performance of the Reference Asset between the Issue Date and the Maturity Date and will be determined in the following manner: (a) Call Event occurs (including after a Knock-In Event) If a Call Event occurs, the Final Value per Unit will be equal to: This formula gives effect to the Conditional Protection° feature. Investors should note that a Call Event will over-ride any prior Knock-In Event that may have occurred. (b) No Call Event or Knock-In Event occurs If neither a Call Event nor a Knock-In Event occurs on, or prior to, the Scheduled Maturity Date, then the Final Value per Unit will be equal to: This formula also gives effect to the Conditional Protection° feature. (c) Knock-In Event occurs and no Call Event occurs If a Knock-In Event occurs and no Call Event occurs the Final Value per Unit will be equal to: Min (100% + Reference Asset Performance on the Scheduled Maturity Date, 100%) Investors should note that if no Call Event occurs and if the Reference Asset Performance on the Scheduled Maturity Date is a negative percentage, they may receive less than their Investment Amount and that the Conditional Protection° feature does not apply in that scenario. Investors should refer to the section “How is the Final Value per Unit determined at Maturity” in Section 1 for more information on how the Final Value per Unit is calculated. |
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| Conditional Protection°: | Conditional Protection means that the Issuer will deliver to an Investor the Delivery Assets with a value equal to the number of Units held multiplied by the Issue Price if the requirements below for Conditional Protection apply. The value of each Unit will not be capital guaranteed but is conditionally protected if:
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| Delivery Asset: | Ordinary share in BHP Billiton Limited (“BHP”) (an ASX quoted share, ASX code: BHP). Please refer to ‘Information about the Delivery Asset’ in Section 2 of this PDS and Section 4 of this PDS for further details on the Delivery Asset and the risks associated with it. |
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| Risks: | The MLI is subject to investment risks, including the possible loss of the Investment Amount if Early Maturity or a Knock-In Event occurs in the absence of a Call Event, and possible delays in payment. Investors should be aware of the possibility that the MLI will not generate a return other than through Coupon Amounts. For information regarding the risks associated with the MLI, please refer to Section 4 of this PDS. For information regarding the possible returns that an Investor can receive, please refer to the worked examples in Section 5 of this PDS. | ||
| Fees: | Distributor Fee– an upfront fee payable by the Issuer of up to 2.50% (including GST if applicable) of the Investment Amount. This fee is payable by the Issuer out of its own funds to distributors at no additional cost to Investors, nor is it deducted from the Investment Amount. Please refer to Section 6 of this PDS for more information on what fees and commissions are payable in connection with an investment in the MLI. |
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* A Call Event is not an Early Maturity Event. For an explanation of the risks associated with a Call Event, please refer to Section 4 of this PDS.
† For an explanation of the risks associated with a Knock-In Event, please refer to Section 4 of this PDS.
° Conditional Protection only applies if a Call Event occurs or to Investments held on the Scheduled Maturity Date provided that no Knock-In Event occurs. This means that if a Knock-In Event occurs, Investors will not have the benefit of Conditional Protection unless a Call Event subsequently occurs and accordingly, they may lose some or all of their Investment Amount. Conditional Protection safeguards the MLI from certain market risks up to the value of the Issue Price, but is subject to conditions and the credit worthiness of Citigroup Global Markets Australia Pty Limited and Citigroup Inc. For more details, please refer to Section 4 of this PDS.
Disclaimer
This material is made available by Citigroup Global Markets Australia Pty Limited (“Citigroup Global Markets”) ABN 64 003 114 832 and AFSL 240992, Participant of the ASX Group and a Participant of the Sydney Futures Exchange Limited. The Financial Products referred to in this document are issued by Citigroup Global Markets. Warrants can be traded on ASX and investors can obtain a copy of the relevant Product Disclosure Statement by contacting Citigroup. Investors may also apply for Instalment Warrants under the Product Disclosure Statement. This information does not take into account the investment objectives or financial situation of any particular person. Investors should be aware that there are risks of investing and that prices both rise and fall. Investors should seek their own independent financial advice based on their own circumstances before making a decision. Warrants are not bank deposits or obligations of, or guaranteed by, Citibank, N.A., Citibank Pty Limited or any of its affiliates or subsidiaries and are subject to investment risks, including the possible loss of the principal amount invested.
The terms set forth herein are intended for discussion purposes only and subject to the final expression of the terms of a transaction as set forth in a definitive agreement and/or confirmation. Although the information contained herein is based upon generally available information and has been obtained from sources believed to be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed. Any prices used herein are historic and may not be available when any order is entered. All opinions and estimates included in this document constitute our judgment as of this date and are subject to change without notice. This material does not purport to identify the nature of the specific market or other risks associated with a particular transaction. Before entering into a derivative transaction, you should ensure that you fully understand the terms of the transaction, relevant risk factors, the nature and extent of your risk of loss and the nature of the contractual relationship into which you are entering. You should also carefully evaluate whether the transaction is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances and whether you have the operational resources in place to monitor the associated risks and contractual obligations over the term of the transaction.
The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor or agent. Therefore prior to entering into the proposed transaction you should determine, without reliance upon us or our affiliates, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences of the transaction, and independently determine that you are able to assume these risks. In this regard, by acceptance of these materials, you acknowledge that you have been advised that (a) we are not in the business of providing legal, tax or accounting advice, (b) you understand that there may be legal, tax or accounting risks associated with the transaction, (c) you should receive legal tax and accounting advice from advisors with appropriate expertise to assess relevant risks, and (d) you should apprise senior management in your organization as to the legal, tax and accounting advice (and, if acceptable, risks) associated with this transaction and our disclaimers as to these maters. If you are acting as a financial adviser or agent, you should evaluate these considerations in light of the circumstances applicable to your principal and the scope of your authority. If you believe you need assistance in evaluating and understanding the terms or risks of a particular derivative transaction, you should consult appropriate advisers before entering into the transaction.
We and/or our affiliates (together, the “Firm”) may from time to time take proprietary positions and/or make a market in instruments identical or economically related to derivative transactions entered into with you, or may have an investment banking or other commercial relationship with and access to information from the issuer(s) of financial products underlying derivative transactions entered into with you. We may also undertake proprietary activities, including hedging transactions related to the initiation or termination of a derivative transaction with you, that may adversely affect the market price, rate, index or other market factors(s) underlying a derivative transaction entered into with you and consequently the value of the transaction. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding.
© Citigroup 2012. All Rights Reserved. Citi and the Red Arc Device are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. Any unauthorized use, duplication, redistribution or disclosure is prohibited by law and will result in prosecution.
This material is made available by Citigroup Global Markets Australia Pty Limited (“Citigroup Global Markets”) ABN 64 003 114 832 and AFSL 240992, Participant of the ASX Group and a Participant of the Sydney Futures Exchange Limited. The Financial Products referred to in this document are issued by Citigroup Global Markets. Warrants can be traded on ASX and investors can obtain a copy of the relevant Product Disclosure Statement by contacting Citigroup. Investors may also apply for Instalment Warrants under the Product Disclosure Statement. This information does not take into account the investment objectives or financial situation of any particular person. Investors should be aware that there are risks of investing and that prices both rise and fall. Investors should seek their own independent financial advice based on their own circumstances before making a decision. Warrants are not bank deposits or obligations of, or guaranteed by, Citibank, N.A., Citibank Pty Limited or any of its affiliates or subsidiaries and are subject to investment risks, including the possible loss of the principal amount invested.
The terms set forth herein are intended for discussion purposes only and subject to the final expression of the terms of a transaction as set forth in a definitive agreement and/or confirmation. Although the information contained herein is based upon generally available information and has been obtained from sources believed to be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed. Any prices used herein are historic and may not be available when any order is entered. All opinions and estimates included in this document constitute our judgment as of this date and are subject to change without notice. This material does not purport to identify the nature of the specific market or other risks associated with a particular transaction. Before entering into a derivative transaction, you should ensure that you fully understand the terms of the transaction, relevant risk factors, the nature and extent of your risk of loss and the nature of the contractual relationship into which you are entering. You should also carefully evaluate whether the transaction is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances and whether you have the operational resources in place to monitor the associated risks and contractual obligations over the term of the transaction.
The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor or agent. Therefore prior to entering into the proposed transaction you should determine, without reliance upon us or our affiliates, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences of the transaction, and independently determine that you are able to assume these risks. In this regard, by acceptance of these materials, you acknowledge that you have been advised that (a) we are not in the business of providing legal, tax or accounting advice, (b) you understand that there may be legal, tax or accounting risks associated with the transaction, (c) you should receive legal tax and accounting advice from advisors with appropriate expertise to assess relevant risks, and (d) you should apprise senior management in your organization as to the legal, tax and accounting advice (and, if acceptable, risks) associated with this transaction and our disclaimers as to these maters. If you are acting as a financial adviser or agent, you should evaluate these considerations in light of the circumstances applicable to your principal and the scope of your authority. If you believe you need assistance in evaluating and understanding the terms or risks of a particular derivative transaction, you should consult appropriate advisers before entering into the transaction.
We and/or our affiliates (together, the “Firm”) may from time to time take proprietary positions and/or make a market in instruments identical or economically related to derivative transactions entered into with you, or may have an investment banking or other commercial relationship with and access to information from the issuer(s) of financial products underlying derivative transactions entered into with you. We may also undertake proprietary activities, including hedging transactions related to the initiation or termination of a derivative transaction with you, that may adversely affect the market price, rate, index or other market factors(s) underlying a derivative transaction entered into with you and consequently the value of the transaction. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding.
© Citigroup 2012. All Rights Reserved. Citi and the Red Arc Device are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. Any unauthorized use, duplication, redistribution or disclosure is prohibited by law and will result in prosecution.