424B2 1 d424b2.htm FINAL PRICING SUPPLEMENT Final Pricing Supplement
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Filed Pursuant to Rule 424(b)(2)

Registration Nos. 333-132370 and 333-132370-01

CALCULATION OF REGISTRATION FEE

 

Class of securities offered

   Aggregate
offering price
   Amount of
registration fee
 

Medium-Term Senior Notes, Series D

   $ 10,000,000    $ 307.00  (1)

 


(1) The filing fee of $307.00 is calculated in accordance with Rule 457(r) of the Securities Act of 1933. Pursuant to Rule 457(p) under the Securities Act of 1933, the $665,155.62 remaining of the filing fee previously paid with respect to unsold securities that were registered pursuant to a Registration Statement on Form S-3 (No. 333-119615) filed by Citigroup Global Market Holdings Inc., a wholly owned subsidiary of Citigroup Inc., on October 8, 2004 is being carried forward, of which $307.00 is offset against the registration fee due for this offering and of which $664,848.62 remains available for future registration fees. No additional registration fee has been paid with respect to this offering.


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Pricing Supplement No. 2007—MTNDD089 Dated March 9, 2007

(To Prospectus Supplement Dated April 13, 2006 and Prospectus Dated March 10, 2006)

US$10,000,000 principal amount

Citigroup Funding Inc.

Medium-Term Notes, Series D

Any Payments Due from Citigroup Funding Inc.

Fully and Unconditionally Guaranteed by Citigroup Inc.

Range Accrual Notes Due 2009

 

 

The notes will bear interest at the rate of 5.52% per annum on each calendar day when the 5-year Constant Maturity Swap Rate (“CMS5”) is determined to be greater than or equal to 4.02% and less than or equal to 6.02%. On each calendar day on which CMS5 is determined to be less than 4.02% or greater than 6.02%, no interest will accrue on the notes. Interest on the notes is payable quarterly on the 20th day of each June, September, December and March beginning on June 20, 2007 and ending on the maturity date.

 

 

The notes will mature on March 20, 2009. At maturity you will receive an amount in cash equal to 100% of the principal amount of notes you then hold, plus any accrued and unpaid interest.

 

 

The notes will be issued in minimum denominations and integral multiples of US$1,000.

 

 

We will not apply to list the notes on any exchange.

Investing in the Notes involves a number of risks. See “ Risk Factors Relating to the Notes” beginning on page PS-5.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or determined that this prospectus, prospectus supplement and pricing supplement is truthful or complete. Any representation to the contrary is a criminal offense.

 


The notes are not deposits or savings accounts but are unsecured debt obligations of Citigroup Funding Inc. The notes are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality.

 

     Per Note    Total

Public Offering Price

   US$  1,000    US$  10,000,000

Agent’s Discount

   US$ 0    US$ 0

Proceeds to Citigroup Finding Inc. (before expenses)

   US$ 1,000    US$ 10,000,000

We expect that delivery of the notes will be made against payment therefor on or about March 20, 2007. Because the notes will not settle in T+3, purchasers who wish to trade the notes on the date hereof or the next two business days will be required to specify an alternative cycle at the time of any such trade to prevent a failed settlement and should consult their own investment advisor.

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SUMMARY INFORMATION — Q&A

This summary includes questions and answers that highlight selected information from the accompanying prospectus and prospectus supplement and this pricing supplement to help you understand the Range Accrual Notes due 2009. You should carefully read the entire prospectus, prospectus supplement and pricing supplement to understand fully the terms of the notes, as well as the principal tax and other considerations that are important to you in making a decision about whether to invest in the notes. You should, in particular, carefully review the section entitled “Risk Factors Relating to the Notes,” which highlights a number of risks, to determine whether an investment in the notes is appropriate for you. All of the information set forth below is qualified in its entirety by the more detailed explanation set forth elsewhere in this pricing supplement and the accompanying prospectus supplement and prospectus.

What Are the Notes?

The notes are a series of unsecured senior debt securities issued by Citigroup Funding Inc. Any payments due on the notes are fully and unconditionally guaranteed by Citigroup Inc., Citigroup Funding’s parent company. The notes will rank equally with all other unsecured and unsubordinated debt of Citigroup Funding, and, as a result of the guarantee, any payments due under the notes will rank equally with all other unsecured and unsubordinated debt of Citigroup. The notes mature on March 20, 2009, and do not provide for earlier redemption by you.

You may transfer the notes only in minimum denominations and integral multiples of US$1,000. You will not have the right to receive physical certificates evidencing your ownership except under limited circumstances. Instead, we will issue the notes in the form of a global certificate, which will be held by the Depository Trust Company or its nominee. Direct and indirect participants in DTC will record beneficial ownership of the notes by individual investors. Accountholders in the Euroclear or Clearstream clearance systems may hold beneficial interests in the notes through the accounts that each of these systems maintains as a participant in DTC. You should refer to the sections, “Description of the Notes — Book-Entry System” in the prospectus supplement and the section “Book-Entry Procedures and Settlement” in the prospectus.

Will I Receive Interest on the Notes?

We expect to pay interest in cash quarterly on the 20th of each June, September, December and March, commencing on June 20, 2007 and ending March 20, 2009. We refer to each of these quarterly payment dates as an interest payment date and each three-month period from and including an interest payment date to and including the day immediately preceding the next interest payment date or maturity as an interest calculation period.

The interest rate for each interest calculation period will equal the product of (x) 5.52% per annum and (y) number of accrual days in the interest calculation period divided by the number of calendar days in the interest calculation period. An accrual day is any calendar day in an interest calculation period on which CMS5 is determined to be greater than or equal to 4.02% and less than or equal to 6.02%.

No interest will accrue on the notes on any calendar day on which CMS5 is determined to be less than 4.02% or greater than 6.02%. As a result, interest payments could be zero. You should refer to the section “Risk Factors Relating to the Notes” for further information.

The structure of the interest payments on the notes differs from notes that bear interest at a fixed rate and notes that bear interest at a rate directly related to CMS5 or another index. You should understand how the interest rate calculations work before you invest in the notes. You can find more information in the section “Description of the Notes — Interest” in this pricing supplement.

What Will I Receive at Maturity of the Notes?

The notes mature on March 20, 2009. You will receive at maturity an amount in cash equal to 100% of the principal amount of notes you then hold, plus any accrued and unpaid interest.

 

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What Will I Receive if I Sell the Notes Prior to Maturity?

You will only receive 100% of the principal amount of your notes if you hold the notes at maturity. If you choose to sell your notes before maturity, you are not guaranteed to receive the full principal amount of the notes you sell. You should refer to the sections “Risk Factors Relating to the Notes—The Price at Which You Will Be Able to Sell Your Notes Prior to Maturity Will Depend on a Number of Factors and May Be Substantially Less Than the Amount You Originally Invest” and “—You May Not Be Able to Sell Your Notes if an Active Trading Market for the Notes Does Not Develop” in this pricing supplement for further information.

What Has the CMS5 Level Been Historically?

We have provided a table showing what the CMS5 level has been historically, since 1997. You can find this table in the section “Historical Data on CMS5” in this pricing supplement. We have provided this historical information to help you evaluate the behavior of CMS5 in recent years. However, past performance is not necessarily indicative of how CMS5 will perform in the future.

Can You Tell Me More About the Effect of Citigroup Funding’s Hedging Activity?

We expect to hedge our obligations under the notes through one or more of our affiliates. This hedging activity will likely involve trading in instruments, such as options, swaps or futures, based on CMS5. This hedging activity may result in us or our affiliates receiving a profit, even if the market value of the notes declines. The costs of maintaining or adjusting this hedging activity could affect the price at which our affiliate Citigroup Global Markets may be willing to purchase your notes in the secondary market. You should refer to “Risk Factors Relating to the Notes — The Price at Which You Will Be Able to Sell Your Notes Prior to Maturity Will Depend on a Number of Factors and May Be Substantially Less Than the Amount You Originally Invest” in this pricing supplement, “Risk Factors — Citigroup Funding’s Hedging Activity Could Result in a Conflict of Interest” in the accompanying prospectus supplement and “Use of Proceeds and Hedging” in the accompanying prospectus.

What Are the U.S. Federal Income Tax Consequences of Investing in the Notes?

Payments of stated interest on the notes will be taxable as ordinary interest income at the time that such payments are accrued or are received (in accordance with the holder’s method of tax accounting). Upon the sale or other taxable disposition of a note, a holder generally will recognize capital gain or loss equal to the difference between the amount realized on such disposition and such holder’s tax basis in such note. Such gain or loss generally will be long-term capital gain or loss if the holder has held the note for more than one year at the time of disposition.

Will the Notes Be Listed on a Stock Exchange?

The notes will not be listed on any exchange.

Can You Tell Me More About Citigroup and Citigroup Funding?

Citigroup is a diversified global financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup Funding is a wholly-owned subsidiary of Citigroup whose business activities consist primarily of providing funds to Citigroup and its subsidiaries for general corporate purposes.

What Is the Role of Citigroup Funding’s and Citigroup’s Affiliates, Citigroup Global Markets and Citigroup Financial Products?

Our affiliate, Citigroup Global Markets, is the agent for the offering and sale of the notes. After the initial offering, Citigroup Global Markets and/or other of our broker-dealer affiliates currently intends, but is not obligated, to buy and sell the notes to create a secondary market for holders of the notes, and may engage in other activities described in the section “Plan of Distribution” in the accompanying prospectus supplement. However, neither Citigroup Global Markets nor any of these affiliates will be obligated to engage in any market-making activities, or continue those activities once it has started them.

 

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Our affiliate, Citigroup Financial Products, will act as calculation agent for the notes. Potential conflicts of interest may exist between Citigroup Financial Products as calculation agent and you as a holder of the notes.

Are There Any Risks Associated With My Investment?

Yes, the notes are subject to a number of risks. Please refer to the section “Risk Factors Relating to the Notes” in this pricing supplement.

 

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RISK FACTORS RELATING TO THE NOTES

An investment in the notes entails significant risks not associated with similar investments in a conventional debt security, including, among other things, fluctuations in the levels of CMS5 and other events that are difficult to predict and beyond our control.

The Amount of Interest Payable on the Notes Will Vary and May Be Zero

Because CMS5 is a floating rate, the amount of interest earned on the notes will fluctuate. You will not earn interest on any day on which CMS5 is determined to be less than 4.02% or greater than 6.02%. If CMS5 remains less than 4.02% or greater than 6.02% for an entire interest calculation period, the applicable interest rate for that interest calculation period will be zero.

The Yield on the Notes May Be Lower Than the Yield On a Standard Debt Security of Comparable Maturity

The notes bear interest at a rate of 5.52% per annum on each calendar day when CMS5 is determined to be greater than or equal to 4.02% and less than or equal to 6.02%. As a result, if CMS5 is less than 4.02% or greater than 6.02% for a substantial number of days during an interest calculation period, the effective yield on your notes for such interest calculation period will be less than that which would be payable on a conventional fixed-rate debt security of Citigroup Funding of comparable maturity.

The Price at Which You Will Be Able to Sell Your Notes Prior to Maturity Will Depend on a Number of Factors and May Be Substantially Less Than the Amount You Originally Invest

We believe that the value of the notes in any secondary market will be affected by supply of and demand for the notes, the level of CMS5 and a number of other factors. Some of these factors are interrelated in complex ways. As a result, the effect of any one factor may be offset or magnified by the effect of another factor. The following paragraphs describe what we expect to be the impact on the market value of the notes of a change in a specific factor, assuming all other conditions remain constant.

CMS5. We expect that the market value of the notes at any time may be affected by changes in CMS5. For example, a decrease in CMS5 could cause a decrease in the market value of the notes because no interest will be payable on the notes if CMS5 is less than 4.02%. Conversely, an increase in CMS5 above 4.02% up to and including 6.02% may cause an increase in the market value of the notes because interest will be payable.

CMS5 will be influenced by complex and interrelated political, economic, financial and other factors that can affect the swap markets generally.

Volatility of CMS5. Volatility is the term used to describe the size and frequency of market fluctuations. If the volatility of CMS5 changes, the market value of the notes may change.

Interest Rates. We expect that the market value of the notes will be affected by changes in U.S. interest rates. In general, if U.S. interest rates increase, the market value of the notes may decrease, and if U.S. interest rates decrease, the market value of the notes may increase.

Hedging Activities. Hedging activities related to the notes by one or more of our affiliates will likely involve trading in one or more instruments, such as options, swaps or futures, based upon CMS5. It is possible that we or our affiliates may profit from our hedging activity, even if the market value of the notes declines. Profits or loss from this hedging activity could affect the price at which our affiliate Citigroup Global Markets may be willing to purchase your notes in the secondary market.

Citigroup Funding and Citigroup’s Credit Ratings, Financial Condition and Results. Actual or anticipated changes in our credit ratings, financial condition or results or those of Citigroup may affect the market value of the notes. The notes are subject to the credit risk of Citigroup, the guarantor of any payments due on the notes.

 

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We want you to understand that the impact of one of the factors specified above, such as an increase in interest rates, may offset some or all of any change in the market value of the notes attributable to another factor, such as an increase in CMS5.

The Historical CMS5 Level Is Not an Indication of the Future CMS5 Level

The historical CMS5 level, which is included in this pricing supplement, should not be taken as an indication of the future CMS5 level during the term of the notes. Changes in the level of CMS5 will affect the trading price of the notes, but it is impossible to predict whether those rates will rise or fall.

You May Not Be Able to Sell Your Notes if an Active Trading Market for the Notes Does Not Develop

The notes have not been and will not be listed on any exchange. There is currently no secondary market for the notes. Citigroup Global Markets Inc. currently intends, but is not obligated, to make a market in the notes. Even if a secondary market does develop, it may not be liquid and may not continue for the term of the notes. If the secondary market for the notes is limited, there may be few buyers should you choose to sell your notes prior to maturity and this may reduce the price you receive.

Citigroup Financial Products Is the Calculation Agent, Which Could Result in a Conflict of Interest

Citigroup Financial Products, which is acting as the calculation agent for the notes, is an affiliate of ours. As a result, Citigroup Financial Products Inc.’s duties as calculation agent, including with respect to certain determinations and judgments that the calculation agent must make in determining amounts due to you, may conflict with its interest as an affiliate of ours.

 

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DESCRIPTION OF THE NOTES

General

The description in this pricing supplement of the particular terms of the Range Accrual Notes Due 2009 (the “Notes”) supplements, and to the extent inconsistent therewith replaces, the descriptions of the general terms and provisions of the registered Notes set forth in the accompanying prospectus and prospectus supplement.

Payment at Maturity

At maturity, you will receive an amount in cash equal to 100% of the principal amount of Notes you then hold, plus accrued and unpaid interest.

Interest

Interest on the Notes, if any, will be payable quarterly on the 20th of each June, September, December and March of each year, starting on June 20, 2007, and ending on March 20, 2009, each an Interest Payment Date. Each three-month period from and including an Interest Payment Date to and including the day immediately preceding the next Interest Payment Date or maturity is an Interest Calculation Period. During each of these Interest Calculation Periods interest will be calculated on the basis of the actual number of Accrual Days elapsed and a 360-day year consisting of twelve 30-day months.

The interest rate for each Interest Calculation Period will equal the product of (x) 5.52% per annum and (y) the number of Accrual Days in the Interest Calculation Period divided by the number of calendar days in the Interest Calculation Period. An Accrual Day is any calendar day in an Interest Calculation Period on which CMS5 is determined to be greater than or equal to 4.02% and less than or equal to 6.02%, as described in detail below in “—Determination of CMS5.” No interest will accrue on the Notes on any calendar day that is not an Accrual Day.

Interest will be payable to the persons in whose names the Notes are registered at the close of business on the Business Day preceding each Interest Payment Date. If an Interest Payment Date falls on a day that is not a Business Day, the interest payment to be made on that Interest Payment Date will be made on the next succeeding Business Day, unless that day falls in the next calendar month, in which case the Interest Payment Date will be the first preceding Business Day. Such payment will have the same force and effect as if made on that Interest Payment Date, and no additional interest will accrue as a result of delayed payment.

Business Day means any day that is not a Saturday, a Sunday or a day on which the securities exchanges or banking institutions or trust companies in the City of New York are authorized or obligated by law or executive order to close.

Determination of CMS5

For purposes of determining whether any calendar day in an Interest Calculation Period is an Accrual Day, CMS5 will equal the 5-year 30/360 U.S. dollar semi-annual swap rate, as quoted on Reuters page “ISDAFIX1” (or any successor page as determined by the calculation agent) at 11:00 am (New York time) on such calendar day or, in the case of a calendar day that is not a New York Business Day, the 5-year 30/360 U.S. dollar semi-annual swap rate appearing on Reuters page “ISDAFIX1” (or any successor page as determined by the calculation agent) at 11:00 am (New York time) on the New York Business Day immediately preceding such calendar day; provided, however that for each calendar day beginning on the fourth New York Business Day immediately preceding any Interest Payment Date, CMS5 will be the 5-year 30/360 U.S. dollar semi-annual swap rate appearing on Reuters page “ISDAFIX1” (or any successor page as determined by the calculation agent) at 11:00 am (New York time) on the fifth New York Business Day prior to that Interest Payment Date.

If a rate for the 5-year 30/360 U.S. dollar semi-annual swap rate is not published on “ISDAFIX1” (or any successor page as determined by the calculation agent) on any New York Business Day on which such rate is required, then the calculation agent will request the principal London office of each of five major reference banks in

 

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the London interbank market, selected by the calculation agent, to provide such bank’s offered quotation to prime banks in the London interbank market for deposits in U.S. dollars in an amount that is representative of a single transaction in that market at that time (a “Representative Amount”) and for a term of 5 years, as of 11:00 am (London time) on such New York Business Day. If at least two such quotations are so provided, CMS5 will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, the calculation agent will request each of three major banks in The City of New York to provide such bank’s rate to leading European banks for loans in U.S. dollars in a Representative Amount and for a term of 5 years, as of approximately 11:00 am (New York City time) on such London Business Day. If at least two such rates are so provided, CMS5 will be the arithmetic mean of such rates. If fewer than two such rates are so provided or if the New York Business Day is not also a London Business Day, then CMS5 will be the rate for CMS5 in effect at 11:00 am (London time) on the immediately preceding London Business Day.

London Business Day means any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

Redemption at the Option of the Holder; Defeasance

The Notes are not subject to redemption at the option of any holder prior to maturity and are not subject to the defeasance provisions described in the accompanying prospectus under “Description of Debt Securities—Defeasance.”

Default Interest Rate

In case of default in payment at maturity of the Notes or on any Interest Payment Date, the Notes will bear interest, payable upon demand of the beneficial owners of the Notes in accordance with the terms of the Notes, from and after the maturity date or relevant Interest Payment Date through the date when payment of the unpaid amount has been made or duly provided for, at the rate of 5.50% per annum on the unpaid amount due. If default interest is required to be calculated for a period of less than one year, it will be calculated on the basis of the actual number of days elapsed and a 360-day year consisting of twelve 30-day months.

Paying Agent and Trustee

Citibank, N.A. will serve as paying agent and registrar for the Notes and will also hold the global security representing the Notes as custodian for DTC. The Bank of New York, as successor trustee under an indenture dated as of June 1, 2005, will serve as trustee for the Notes.

Calculation Agent

The calculation agent for the Notes will be Citigroup Financial Products. All determinations made by the calculation agent will be at the sole discretion of the calculation agent and will, in the absence of manifest error, be conclusive for all purposes and binding on Citigroup Funding, Citigroup and the holders of the Notes. Because the calculation agent is an affiliate of Citigroup Funding and Citigroup, potential conflicts of interest may exist between the calculation agent and the holders of the Notes, including with respect to certain determinations and judgments that the calculation agent must make in determining amounts due to holders of the Notes. Citigroup Financial Products Inc. is obligated to carry out its duties and functions as calculation agent in good faith and using its reasonable judgment.

 

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HISTORICAL DATA ON CMS5

The following table sets forth, for each of the periods indicated, the high and the low level of CMS5 as was reported on Bloomberg. The historical CMS5 levels should not be taken as an indication of the future performance of CMS5 during the term of the Notes or what the value of the Notes may be. Any historical upward or downward trend in CMS5 during any period set forth below is not any indication that CMS5 is more or less likely to increase or decrease at any time over the term of the Notes.

CMS Rate Spread

 

     High %    Low %

1997

     

Quarter

     

First

   7.0350    6.3050

Second

   7.1250    6.5350

Third

   6.6050    6.2250

Fourth

   6.4550    6.0750

1998

     

Quarter

     

First

   6.1250    5.6900

Second

   6.1850    5.8250

Third

   5.9750    5.1250

Fourth

   5.4400    4.8750

1999

     

Quarter

     

First

   5.9400    5.2100

Second

   6.6100    5.5900

Third

   6.9600    6.2800

Fourth

   7.0400    6.4300

2000

     

Quarter

     

First

   7.4830    7.0800

Second

   7.7950    7.0530

Third

   7.3030    6.7890

Fourth

   6.8400    5.8770

2001

     

Quarter

     

First

   5.9130    5.2760

Second

   5.8330    5.3250

Third

   5.7850    4.5010

Fourth

   5.3300    4.0540

2002

     

Quarter

     

First

   5.4410    4.7430

Second

   5.4300    4.4700

Third

   4.5750    3.2300

Fourth

   3.8950    3.1550

2003

     

Quarter

     

First

   3.6250    2.8950

Second

   3.3650    2.3710

Third

   4.0950    2.7450

Fourth

   3.8750    3.2450

 

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     High %    Low %

2004

     

Quarter

     

First

   3.7750    3.0050

Second

   4.5560    3.2480

Third

   4.3355    3.6505

Fourth

   4.1600    3.6510

2005

     

Quarter

     

First

   4.7765    3.9635

Second

   4.6205    4.0300

Third

   4.7295    4.2610

Fourth

   5.0710    4.6770

2006

     

Quarter

     

First

   5.3215    4.7460

Second

   5.7725    5.2810

Third

   5.7465    4.9765

Fourth

   5.2790    4.7710

2007

     

Quarter

     

First (through March 9)

   5.3301    4.8980

The CMS5 level at 11:00 a.m. (New York time) on March 9, 2007, was 5.0025%.

 

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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain U.S. federal income tax considerations material to the purchase, ownership and disposition of the Notes. Unless otherwise specifically indicated herein, this summary addresses the tax consequences only to a person that is a holder or a beneficial owner of a Note that is a citizen or resident of the United States or a domestic corporation or otherwise subject to U.S. federal income tax on a net income basis in respect of a Note (a “U.S. Holder”). All references to “holders” (including U.S. Holders) are to beneficial owners of the Notes. This summary is based on U.S. federal income tax laws, regulations, rulings and decisions in effect as of the date of this prospectus supplement, all of which are subject to change at any time (possibly with retroactive effect).

This summary addresses the U.S. federal income tax consequences to U.S. Holders who are initial holders of the Notes and who will hold the Notes as capital assets. This summary does not address all aspects of U.S. federal income taxation that may be relevant to a particular holder in light of its individual investment circumstances or to certain types of holders subject to special treatment under the U.S. federal income tax laws, such as dealers in securities or foreign currency, financial institutions, insurance companies, tax-exempt organizations and taxpayers holding the Notes as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated financial transaction. Moreover, the effect of any applicable state, local or foreign tax laws is not discussed.

Investors should consult their own tax advisors in determining the tax consequences to them of holding the Notes, including the application of state, local or other tax laws and the possible effects of changes in federal or other tax laws.

U.S. Holders

Payments of Interest. Payments of stated interest on the Notes will be taxable to a U.S. Holder as ordinary interest income at the time that such payments are accrued or are received (in accordance with such U.S. Holder’s method of tax accounting).

Purchase, Sale and Retirement of Notes. Upon the sale, exchange or retirement of a Note, a U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount realized on the sale, exchange or retirement (less any accrued stated interest, which will be taxable as such) and the U.S. Holder’s tax basis in such Note. A U.S. Holder’s tax basis in a Note generally will equal the cost of such Note to such holder. Gain or loss recognized by a U.S. Holder generally will be long-term capital gain or loss if the U.S. Holder has held the Note for more than one year at the time of disposition. Long-term capital gains recognized by an individual holder generally are subject to tax at a lower rate than short-term capital gains or ordinary income. The deductibility of capital losses is subject to limitations.

Information Reporting and Backup Withholding. Information returns may be required to be filed with the Internal Revenue Service (“IRS”) relating to payments made to a particular U.S. Holder of Notes. In addition, U.S. Holders may be subject to backup withholding tax on such payments if they do not provide their taxpayer identification numbers to the trustee in the manner required, fail to certify that they are not subject to backup withholding tax, or otherwise fail to comply with applicable backup withholding tax rules. U.S. Holders may also be subject to information reporting and backup withholding tax with respect to the proceeds from a sale, exchange, retirement or other taxable disposition of the Notes.

Non-U.S. Holders

A holder or beneficial owner of Notes that is not a U.S. Holder (a “Non-U.S. Holder”) generally will not be subject to U.S. federal income or withholding tax on interest payments on the Notes, provided that the Non-U.S. Holder certifies on IRS Form W-8BEN (or a successor form), under penalties of perjury, that it is a Non-U.S. Holder and provides its name and address or otherwise satisfies applicable documentation requirements and the payments are not effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States (or, where a tax treaty applies, are not attributable to a United States permanent establishment). Any gain realized on the sale of Notes by a Non-U.S. Holder will generally be exempt from U.S. federal income and withholding tax

 

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unless the gain is effectively connected with the conduct of a trade or business in the United States by the Non-U.S. Holder (or, where a tax treaty applies, is attributable to a United States permanent establishment), or in the case of gain realized by an individual Non-U.S. Holder, the Non-U.S. Holder is present in the United States for 183 days or more in the taxable year of the sale and certain other conditions are met.

In general, a Non-U.S. Holder will not be subject to U.S. federal backup withholding or information reporting with respect to payments of interest on the Notes if the Non-U.S. Holder provides an IRS Form W-8BEN (or a successor form) with respect to such payments.

PLAN OF DISTRIBUTION

The terms and conditions set forth in the Global Selling Agency Agreement dated April 20, 2006 among Citigroup Funding, Citigroup and the agents named therein, including Citigroup Global Markets, govern the sale and purchase of the Notes.

Citigroup Global Markets, acting as principal, has agreed to purchase from Citigroup Funding, and Citigroup Funding has agreed to sell to Citigroup Global Markets, US$10,000,000 principal amount of Notes (10,000 Notes), any payments due on which are fully and unconditionally guaranteed by Citigroup.

The Notes will not be listed on any exchange.

In order to hedge its obligations under the Notes, Citigroup Funding expects to enter into one or more swaps or other derivatives transactions with one or more of its affiliates. You should refer to the section “Risk Factor Relating to the Notes—The Price at Which You Will Be Able to Sell Your Notes Prior to Maturity Will Depend on a Number of Factors and May Be Substantially Less Than the Amount You Originally Invest” in this pricing supplement, “Risk Factors—Citigroup Funding’s Hedging Activity Could Result in a Conflict of Interest” in the accompanying prospectus supplement and the section “Use of Proceeds and Hedging” in the accompanying prospectus.

Citigroup Global Markets is an affiliate of Citigroup Funding. Accordingly, the offering will conform to the requirements set forth in Rule 2720 of the Conduct Rules of the National Association of Securities Dealers. Client accounts over which Citigroup or its affiliates have investment discretion are not permitted to purchase the Notes, either directly or indirectly.

 

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ERISA MATTERS

Each purchaser of the Notes or any interest therein will be deemed to have represented and warranted on each day from and including the date of its purchase or other acquisition of the Notes through and including the date of disposition of such Notes that either:

 

  (a) it is not (i) an employee benefit plan subject to the fiduciary responsibility provisions of ERISA, (ii) an entity with respect to which part of all of its assets constitute assets of any such employee benefit plan by reason of C.F.R. 2510.3-101 or otherwise, (iii) a plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the “Code”) (for example, individual retirement accounts, individual retirement annuities or Keogh plans), or (iv) a government or other plan subject to federal, state or local law substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code (such law, provisions and Section, collectively, a “Prohibited Transaction Provision” and (i), (ii), (iii) and (iv), collectively, “Plans”); or

 

  (b) if it is a Plan, either (A)(i) none of Citigroup Global Markets, its affiliates or any employee thereof is a Plan fiduciary that has or exercises any discretionary authority or control with respect to the Plan’s assets used to purchase the Notes or renders investment advice with respect to those assets, and (ii) the Plan is paying no more than adequate consideration for the Notes or (B) the representations and warranties described in the section “ERISA Matters” in the accompanying prospectus supplement are true.

Please also refer to the section “ERISA Matters” in the accompanying prospectus supplement and prospectus.

 

PS-13


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You should rely only on the information contained or incorporated by reference in this pricing supplement and the accompanying prospectus supplement and prospectus. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained or incorporated by reference in this pricing supplement is accurate as of any date other than the date on the front of the document.

 


TABLE OF CONTENTS

     Page
Pricing Supplement   

Summary Information — Q&A

   PS-2

Risk Factors Relating to the Notes

   PS-5

Description of the Notes

   PS-7

Historical Data on the CMS Rate Spread

   PS-9

Certain United States Federal Income Tax Considerations

   PS-11

Plan of Distribution

   PS-12

ERISA Matters

   PS-13
Prospectus Supplement   
  

Risk Factors

   S-3

Important Currency Information

   S-6

Description of the Notes

   S-7

Certain United States Federal Income Tax Considerations

   S-33

Plan of Distribution

   S-40

ERISA Matters

   S-41
Prospectus   
  

Prospectus Summary

   1

Forward-Looking Statements

   6

Citigroup Inc.

   6

Citigroup Funding Inc.

   6

Use of Proceeds and Hedging

   7

European Monetary Union

   8

Description of Debt Securities

   8

Description of Index Warrants

   21

Description of Debt Security and Index Warrant Units

   24

Limitations on Issuances in Bearer Form

   25

Plan of Distribution

   26

ERISA Matters

   29

Legal Matters

   29

Experts

   29


Table of Contents

 


Citigroup Funding Inc.

Medium-Term Notes, Series D

US$10,000,000

Range Accrual Notes

Due March 20, 2009

(US$1,000 Principal Amount per Note)

Payments Due from Citigroup Funding Inc.

Fully and Unconditionally Guaranteed

by Citigroup Inc.

 


Pricing Supplement

March 9, 2007

(Including Prospectus Supplement dated

April 13, 2006 and Prospectus dated

March 10, 2006)

 


Citigroup