Citigroup in SEQUINS Offering Linked to IAC/InterActiveCorp

Cleary Gottlieb represented Citigroup Global Markets Inc., as underwriter, in Citigroup Global Markets Holdings Inc.’s $13.5 million offering of 1.35 million 7.5% Select Equity Indexed Notes (SEQUINSSM) due April 3, 2006.  The offering is linked to the common stock of IAC/InterActiveCorp, a multi-brand interactive commerce company operating a diversified portfolio of specialized and global brands in the travel, home shopping, ticketing, personals, local services, financial services, real estate and teleservices industries.  Cleary also acted as special tax counsel to the issuer in the transaction.  

The SEQUINS are unsecured senior debt securities issued under a shelf registration statement.  If not called, at maturity the SEQUINS return a fixed number of shares of IAC common stock.  If the SEQUINS are called, investors receive an annual yield to call of 12%. Until the SEQUINS are called, investors receive quarterly interest payments.  The call feature effectively caps upside potential at 12%, but in return investors receive interest at a rate that is significantly greater than IAC’s dividend payments. IAC historically has not paid dividends on its common stock.

Prior to this offering, Cleary worked with Citigroup on the issuance of SEQUINS linked to the common stock of Intel Corporation, Texas Instruments Incorporated, Hewlett-Packard Company, Motorola, Inc. and Apple Computer Inc., and the Class A special common stock of Comcast Corporation.