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MLI Income Switch (MLI 2010 - 04)

CitiFirst Protection

Overview

MLI Income Switch (MLI 2010 - 04) is designed for Investors seeking a high fixed rate in the first year, which converts into a floating rate (including a Margin over the Reference Rate) in subsequent years. The structure allows Investors to lock in a competitive fixed rate in Year 1 whilst still affording the opportunity to benefit from potential increases in the Reference Rate in Years 2-5, provided no Call Event occurs.

Indicative Terms

  • Maturity: 29 April 2015
  • Currency: AUD or USD
  • Capital Protection at Maturity
  • Type: Deferred Purchase Agreement
Issuer: Citigroup Global Markets Australia Pty Limited
Guarantor: Citigroup Inc.
Reference Rates: AUD Series: 3 Month AUD BBSW (Reuters: .BBSW; Bloomberg: BBSW3M <Index>)
USD Series: 3 Month USD LIBOR (Reuters: .LIBOR; Bloomberg: US0003M <Index>)
Offer Opening Date: 8 April 2010 at 9:00 am (Sydney time)
Offer Closing Date: 23 April 2010 at 5:00 pm (Sydney time)
Issue Date: AUD Series: 29 April 2010
USD Series: 29 April 2010
Maturity Date: AUD Series: 29 April 2015 ^
USD Series: 29 April 2015 ^
^ or the date on which a Call Event occurs.
Term of Investment: AUD Series: 5 years
USD Series: 5 years
Denomination: AUD Series: Australian dollars
USD Series: United States dollars
Investment: The MLI which is an agreement between the Investor and the Issuer governed by the Terms
Issue Price: AUD Series: AUD1.00 per MLI Unit
USD Series: USD1.00 per MLI Unit
Minimum Investment Amount: AUD Series: AUD 10,000 and multiples of AUD 1,000 thereafter
USD Series: USD 10,000 and multiples of USD 1,000 thereafter
Capital Protection: The value of each MLI Unit on the Maturity Date will be the Issue Price (subject to certain restrictions as described on page 19)*
Call Event: The Issuer has the right, at the Issuer’s absolute discretion, to declare a Call Event on any Call Event Observation Date. If a Call Event occurs on any Call Event Observation Date, the Maturity Date will be deemed to be the Call Event Observation Date on which the Call Event occurs. The Final Value per MLI on the new Maturity Date will be equal to the “Final Value per MLI” specified below. Please refer to the section “How does the Call Event work?” on page 14 for further details.
Call Event Observation Dates: On the first anniversary of the Issue Date and Quarterly thereafter.
Interest Rate Periods: Quarterly. The first Interest Rate Period begins on the Issue Date.
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.
Interest Calculation Dates: AUD Series:
On the first Business Day of the corresponding Interest Rate Period.
USD Series:
On the Business Day 2 London Business Days before the first common Sydney, London and New York Business Day of the corresponding Interest Rate Period.
Interest Rate Payments: AUD Series:
Interest (Year 1) = Investment Amount x Interest Rate x 90 / 360

Interest (Years 2-5) = Investment Amount x Interest Rate x Actual / 365

where: Actual is the number of days in each Interest Rate Period.
USD Series:
Interest (Year 1) = Investment Amount x Interest Rate x 90 / 360

Interest (Years 2-5) = Investment Amount x Interest Rate x Actual / 360

where: Actual is the number of days in each Interest Rate Period.
Interest Rate: AUD Series:
Year 1:          7.25% p.a.
Years 2-5:     3 Month AUD BBSW + Margin
USD Series:
Year 1:          3.00% p.a.        
Years 2-5:    3 Month USD LIBOR + Margin
Margin: AUD Series: The rate determined by the Issuer, notified to the Investor after the Issue Date and expected to be an indicative rate of 0.90% per annum as at the date of this PDS. Please refer to the section “What factors affect the Margin?” on page 16 for further details USD Series: The rate determined by the Issuer, notified to the Investor after the Issue Date and expected to be an indicative rate of 0.50% per annum as at the date of this PDS. Please refer to the section “What factors affect the Margin?” on page 16 for further details
Interest Payment Dates: AUD Series:
On the first Business Day after the corresponding Interest Rate Period
USD Series:
On the first common Sydney, New York and London Business Day after the corresponding Interest Rate Period
Final Value per MLI: AUD Series: AUD 1.00 per MLI Unit
USD Series: USD 1.00 per MLI Unit
Delivery Asset: Ordinary shares in Commonwealth Bank of Australia (“CBA”) (an ASX listed share, ASX code: CBA)
Fees: Distributor Fee: An upfront fee payable by the Issuer of up to 2.00% (including GST) of the Investment Amount. This fee is payable by the Issuer out of its own funds and is not an additional cost to the Applicant, nor is it deducted from the Applicant’s Investment Amount.
* Capital Protection only applies to Investments held at Maturity provided no Early Maturity occurs. Capital Protection safeguards the MLI from market risks but is subject to the credit worthiness of Citigroup Global Markets Australia Pty Limited and Citigroup Inc. For more details, please refer to Section 4 of this PDS.

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  • Investor Sale Form

More Information

For further information on structured financial products contact the Citigroup Structured Products Service Centre.

Phone : 1300 30 70 70.
Email : citifirst.au@citi.com
Mail :GPO Box 557 Sydney NSW 2001

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.

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