FWP 1 dfwp.htm FINAL OFFERING SUMMARY Final Offering Summary

Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Nos. 333-132370 and 333-132370-01

LOGO

Equity First

Performance First

LOGO

 

OFFERING SUMMARY

(Related to the Pricing Supplement No. 2008 - MTNDD240 Dated April 24, 2008)

CITIGROUP FUNDING INC.

Medium-Term Notes, Series D

Any Payments Due from Citigroup Funding Inc.

Fully and Unconditionally Guaranteed by Citigroup Inc.

 

1,059,000 Buffer Notes

 

Based Upon the Dow Jones Industrial AverageSM

Due May 7, 2010

$10.00 per Note

Citigroup Funding Inc., the issuer, and Citigroup Inc., the guarantor, have filed a registration statement (including a prospectus and related prospectus supplement) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus and related prospectus supplement in that registration statement (File No. 333-132370) and the other documents Citigroup Funding and Citigroup have filed with the SEC for more complete information about Citigroup Funding, Citigroup and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you can request the prospectus and related prospectus supplement by calling toll-free 1-877-858-5407.

 

       
Investment Products   Not FDIC Insured   May Lose Value   No Bank Guarantee

April 24, 2008

2    Buffer Notes

 

Buffer Notes

Based Upon the Dow Jones Industrial AverageSM

Due May 7, 2010

This offering summary represents a summary of the terms and conditions of the Notes. We encourage you to read the pricing supplement and accompanying prospectus supplement and prospectus related to this offering. Capitalized terms used in this overview are defined in the “Final Terms” below.

Overview of the Notes

The Buffer Notes Based Upon the Dow Jones Industrial AverageSM due 2010 (the “Notes”), are index-linked investments that offer a potential return at maturity based on an enhanced upside participation in any increase in the value of the Dow Jones Industrial AverageSM during the term of the Notes, subject to a maximum total return, while also providing full protection against a decline of 10% or less in the value of the Dow Jones Industrial AverageSM and limited protection against a decline of more than 10% in the value of the Dow Jones Industrial AverageSM. The Notes are not principal protected and do not pay periodic interest. The Notes have a maturity of approximately 2 years and are issued by Citigroup Funding Inc. Some key characteristics of the Notes include:

 

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Limited Downside Protection and Limited Enhanced Upside Participation. At maturity you will receive for each Note you hold a maturity payment based on the percentage change in the value of the Dow Jones Industrial AverageSM from the Pricing Date to the Valuation Date, which may be greater than, equal to, or less than your initial investment in the Notes. We refer to the percentage change in the closing value of the Dow Jones Industrial AverageSM from the Pricing Date to the Valuation Date as the Index Percentage Change. If the Ending Value of the Dow Jones Industrial AverageSM is greater than its Starting Value, at maturity you will receive for each Note you then hold the $10 principal amount per Note plus a note return amount equal to the product of (i) $10 and (ii) the Index Percentage Change (which will be positive) and (iii) 300%, subject to a maximum total return on the Notes of 20% (approximately 9.89% per annum on a simple interest basis) of the principal amount of the Notes. If the Ending Value of the Dow Jones Industrial AverageSM is less than or equal to 100% of its Starting Value but greater than or equal to 11564.06 (90% of its Starting Value), the note return amount will be zero and the maturity payment will equal the $10 principal amount per Note. If the Ending Value of the Dow Jones Industrial AverageSM is less than 90% of its Starting Value (representing a decrease of more than 10% from its Starting Value), at maturity you will receive for each Note you then hold the $10 principal amount per Note plus a note return amount equal to the product of (i) $10 and (ii) the sum of (1) the Index Percentage Change (which will be negative) and (2) 10%. Thus, if the Ending Value of the Dow Jones Industrial AverageSM is less than 11564.06 (regardless of the value of the Dow Jones Industrial AverageSM at any other time during the term of the Notes), the maturity payment will be less than your initial investment of $10 per Note and your investment in the Notes will result in a loss.

Buffer Notes       3

 

 

However, in no case will the maturity payment equal less than 10% of your investment in the Notes, or $1 per $10 Note. Because the maximum total return over the term of the Notes is limited to 20% (approximately 9.89% per annum on a simple interest basis) of the principal amount of the Notes, in no circumstance will the payment you receive at maturity be more than approximately $12 per Note.

 

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No Periodic Payments. The Notes do not offer current income, which means that you will not receive any periodic interest on the Notes. You will also not receive any dividend payments or other distributions, if any, made on the stocks included in the Dow Jones Industrial AverageSM.

 

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No Principal Protection. While the Notes provide limited protection against the decline in the value of the Dow Jones Industrial AverageSM, the Notes are not principal protected. If the Ending Value of the Dow Jones Industrial AverageSM is less than 90% of its Starting Value, the maturity payment you will receive will equal $10 principal amount per Note plus the product of (i) the $10 principal amount per Note and (ii) the sum of (1) the Index Percentage Change (which will be negative) and (2) 10%. Thus, if the Ending Value of the Dow Jones Industrial AverageSM is less than 90% of its Starting Value (regardless of the value of the Dow Jones Industrial AverageSM at any other time during the term of the Notes), the maturity payment will be less than your initial investment in the Notes and your investment in the Notes will result in a loss.

The Notes are a series of unsecured senior debt securities issued by Citigroup Funding. 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 at maturity will rank equally with all other unsecured and unsubordinated debt of Citigroup Inc. The return of the principal amount of your investment in the Notes at maturity is not guaranteed.

Types of Investors

The Notes may be an appropriate investment for the following types of investors:

 

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Investors looking for potential enhanced upside exposure to the Dow Jones Industrial AverageSM, subject to a maximum total return on the Notes of 20% (approximately 9.89% per annum on a simple interest basis) of the principal amount of the Notes

 

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Investors willing to accept downside exposure to the Dow Jones Industrial AverageSM with limited protection

 

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Investors who seek to add an equity index-linked investment to further diversify their portfolio

 

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Current or prospective holders of exchange-traded funds and index funds benchmarked to any of the stocks comprising the Dow Jones Industrial AverageSM who are willing to accept the downside risk in the Dow Jones Industrial AverageSM, subject to limited protection against loss

4    Buffer Notes

 

Final Terms

 

Issuer:

    Citigroup Funding Inc.

Security:

    Buffer Notes Based Upon the Dow Jones Industrial AverageSM Due May 7, 2010

Guarantee:

    Any payments due on the Notes are fully and unconditionally guaranteed by Citigroup Inc., Citigroup Funding’s parent company; however, because the Notes are not principal protected, you may receive a payment at maturity with a value less than the amount you initially invest

Rating of the Issuer’s Obligations:

    Aa3/AA- (Moody’s/S&P) based upon the Citigroup Inc. guarantee and subject to change during the term of the Notes; however, because the Notes are not principal protected, you may receive a payment at maturity with a value less than the amount you initially invest

Principal Protection:

    None

Pricing Date:

    April 24, 2008

Issue Date:

    April 29, 2008

Valuation Date:

    May 4, 2010

Maturity Date:

    May 7, 2010

Issue Price:

    $10 per Note

Coupon:

    None

Underlying Index:

    The Dow Jones Industrial AverageSM

Payment at Maturity:

    For each $10 Note, $10 plus a Note Return Amount, which may be positive, zero or negative

Note Return Amount:

   

·        If the Index Percentage Change is positive, the Note Return Amount will be positive and will equal:

 

$10 x Index Percentage Change x Upside Participation Rate,

 

subject to the maximum total return on the Notes.

 

The Upside Participation Rate will equal 300%. Because the maximum total return on the Notes is limited to 20% (approximately 9.89% per annum on a simple interest basis) of the principal amount of the Notes, in no circumstance will the amount you receive at maturity exceed $12 per Note.

 

·        If the Index Percentage Change is from and including 0% to and including –10%, the Note Return Amount will be zero.

 

·        If the Index Percentage Change is less than –10%, the Note Return Amount will be negative and will equal:

 

$10 x (Index Percentage Change + 10%)

 

Thus, if the value of the Dow Jones Industrial AverageSM decreases by more than 10%, the Index Percentage Change and the Note Return Amount will be negative and the amount you receive at maturity will be less than $10 per Note and could be as low as $1 per $10 Note.

Index Percentage Change:

   

The Index Percentage Change will equal the following fraction, expressed as a percentage:

Ending Value - Starting Value

Starting Value

Starting Value:

    12848.95

Ending Value:

    The closing value of the Dow Jones Industrial AverageSM on the Valuation Date

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Upside Participation Rate:

   300%

Listing:

   The notes have been approved for listing on the American Stock Exchange under the symbol “BUN,” subject to official notice of issuance.

Purchase Price and Proceeds to Issuer:

     Per Note   Total
  Public Offering Price:   $10.00   10,590,000
  Underwriting Discount (including the sales commission described below):   $0.225   238,275
  Proceeds to Citigroup Funding Inc.:   $9.775   10,351,725

Sales Commission Earned:

   $0.20 per Note for each Note sold by a Smith Barney Financial Advisor.

Calculation Agent:

   Citigroup Global Markets Inc.

CUSIP:

   17313G787

Benefits of the Notes

 

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Limited Enhanced Participation in any Appreciation of the Dow Jones Industrial AverageSM.    The return on the Notes, if any, is based upon the performance of the Dow Jones Industrial AverageSM. If the Ending Value of the Dow Jones Industrial AverageSM exceeds its Starting Value, your participation in the basket’s appreciation will be increased by the Upside Participation Rate, subject to a maximum total return on the Notes 20% (approximately 9.89% per annum on a simple interest basis) of the principal amount of the Notes.

 

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Some Protection Against Loss.    At maturity you will receive your original investment in the Notes even if the Ending Value of the Dow Jones Industrial AverageSM has declined from its Starting Value, as long as the Ending Value is not less than 90% of its Starting Value. In this case, you will not suffer the same loss that a direct investment in the Dow Jones Industrial AverageSM would produce. However, if the Ending Value of the Dow Jones Industrial AverageSM is less than 90% of its Starting Value, the amount you receive at maturity will be less than your initial investment in the Notes.

 

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Diversification.    The Notes are linked to the Dow Jones Industrial AverageSM and may allow you to diversify an existing portfolio mix of stocks, bonds, mutual funds and cash.

6    Buffer Notes

 

Key Risk Factors for the Notes

An investment in the Notes involves significant risks. While some of the risk considerations are summarized below, please review the “Risk Factors Relating to the Notes” section of the pricing supplement related to this offering and the “Risk Factors” section of the accompanying prospectus supplement for a full description of risks.

 

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Potential for Loss.    The Notes are not principal protected. The maturity payment on the Notes will depend on the percentage change in the value of the Dow Jones Industrial AverageSM from the Pricing Date to the Valuation Date. If the Ending Value of the Dow Jones Industrial AverageSM is less than 90% of its Starting Value, the maturity payment you will receive will be less than your original investment in the Notes and your investment in the Notes will result in a loss. This will be true even if the value of the Dow Jones Industrial AverageSM exceeded its Starting Value at one or more times over the term of the Notes.

 

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Appreciation is Limited.    The maximum total return on the Notes will be limited to 20% (approximately 9.89% per annum on a simple interest basis) of the principal amount of the Notes. If the Ending Value of the Dow Jones Industrial AverageSM exceeds its Starting Value by more than 20%, the Notes will provide less opportunity for appreciation than an investment in the stocks comprising the Dow Jones Industrial AverageSM or in a similar security that is directly linked to the appreciation of the Dow Jones Industrial AverageSM and not subject to a maximum return. (See the examples under “Hypothetical Maturity Payments” below).

 

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No Periodic Payments.    You will not receive any periodic payments of interest or any other periodic payments on the Notes. In addition, you will not be entitled to receive dividend payments or other distributions, if any, made on the stocks included in the Dow Jones Industrial AverageSM.

 

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Potential for a Lower Comparative Yield.    Because you will not receive any periodic payments of interest or any other periodic payments on the Notes, if the Ending Value of the Dow Jones Industrial AverageSM does not increase sufficiently from its Starting Value, taking into account the Upside Participation Rate, the effective yield on the Notes may be less than that which would be payable on a conventional fixed-rate debt security of Citigroup Funding of comparable maturity.

 

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Exchange Listing and Secondary Market.    The Notes have been approved for listing on the American Stock Exchange, under the symbol “BUN,” subject to official notice of issuance, but a secondary market may not develop or continue for the term of the Notes. Although Citigroup Global Markets intends to make a secondary market for the Notes, it is not obligated to do so.

 

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The Resale Value of the Notes May Be Lower Than Your Initial Investment.    Due to, among other things, changes in the prices of and dividend yields on the stocks included in the Dow Jones Industrial AverageSM, interest rates, the earnings performance of the issuers of the stocks included in the Dow Jones Industrial AverageSM, other economic conditions and Citigroup Funding and Citigroup Inc.’s perceived creditworthiness, the Notes may trade at prices below their initial issue price of $10 per Note. You could receive substantially less than the amount of your initial investment if you sell your Notes.

 

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Fees and Conflicts.    Citigroup Global Markets and its affiliates involved in this offering are expected to receive compensation for activities and services provided in connection with the Notes. Further, Citigroup Funding expects to hedge its obligations under the Notes

Buffer Notes       7

 

 

through the trading of the stocks included in the Dow Jones Industrial AverageSM or other instruments, such as options, swaps or futures, based upon the Dow Jones Industrial AverageSM or the stocks included in the Dow Jones Industrial AverageSM, by one or more of its affiliates. Each of Citigroup Funding’s or its affiliates’ hedging activities and Citigroup Global Markets’ role as the Calculation Agent for the Notes may result in a conflict of interest.

 

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The United States Federal Income Tax Consequences of the Notes are Uncertain.    No statutory, judicial or administrative authority directly addresses the characterization of the Notes or instruments similar to the Notes for U.S. federal income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences of an investment in the Notes are not certain. No ruling is being requested from the Internal Revenue Service with respect to the Notes and no assurance can be given that the Internal Revenue Service will agree with the conclusions expressed under “Certain U.S. Federal Income Tax Considerations” in this offering summary or under “What Are the United States Federal Income Tax Consequences of Investing in the Notes?” and “Certain United States Federal Income Tax Considerations” in the pricing supplement related to this offering. It is also possible that future U.S. legislation, regulations or other IRS guidance would require you to accrue income on the Notes on a current basis at ordinary income rates (as opposed to capital gains rates) or to treat the Notes in another manner that significantly differs from the agreed-to treatment discussed under “Certain U.S. Federal Income Tax Considerations” in this offering summary and under “What Are the United States Federal Income Tax Consequences of Investing in the Notes?” and “Certain United States Federal Income Tax Considerations” in the pricing supplement related to this offering, and that any such guidance could have retroactive effect.

 

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Citigroup Inc. Credit Risk.    The Notes are subject to the credit risk of Citigroup Inc., Citigroup Funding’s parent company and the guarantor of any payments due on the Notes.

8    Buffer Notes

 

Certain U.S. Federal Income Tax Considerations

The following summarizes certain federal income tax considerations for U.S. investors (“U.S. Holders”) and certain non-U.S. investors described below that are initial holders of the Notes and that hold the Notes as capital assets.

For U.S. federal income tax purposes, the Notes generally should be treated as a cash-settled prepaid forward contract, subject to a floor, on the value of the Dow Jones Industrial AverageSM on the Valuation Date, pursuant to which forward contract, at maturity the U.S. Holder will receive the cash value of the Dow Jones Industrial AverageSM subject to certain adjustments. The amounts invested by a U.S. Holder should be treated as a cash deposit that will be used to satisfy the holder’s obligation under the Note. Thus a U.S. Holder’s tax basis in a Note generally will equal the holder’s cost for that Note. Under the above characterization, at maturity or upon the sale or other taxable disposition of a Note, a U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount the U.S. Holder receives and the holder’s tax basis in the Notes. Such gain or loss generally will be long-term capital gain or loss if the U.S. Holder has held the Notes for more than one year at the time of disposition.

No statutory, judicial or administrative authority directly addresses the characterization of the Notes or instruments similar to the Notes for U.S. federal income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences of an investment in the Notes are not certain. Accordingly, a prospective investor (including a tax-exempt investor) in the Notes should consult his or her tax advisor in determining the tax consequences of an investment in the Notes, including the application of State, Local or other tax laws and the possible effects of changes in Federal or other tax laws.

It is also possible that future regulations or other IRS guidance would require you to accrue income on the Notes on a current basis at ordinary income rates (as opposed to capital gains rates) or to treat the Notes in another manner that significantly differs from the agreed-to treatment discussed above. The IRS and U.S. Treasury Department recently issued a notice (the “Notice”) that requests public comments on a comprehensive list of tax policy issues raised by prepaid forward contracts, which include financial instruments similar to the Notes. The Notice contemplates that such instruments may become subject to taxation on a current accrual basis under one or more possible approaches, including a mark-to-market methodology; a regime similar to the Contingent Payment Regulations; categorization of prepaid forward contracts as debt; and treatment of prepaid forward contracts as “constructive ownership” transactions. The Notice also contemplates that all (or significant portions) of an investor’s returns under prepaid forward contracts could be taxed at ordinary income rates (as opposed to capital gains rates). It is currently impossible to predict what guidance, if any, will be issued as a result of the Notice, and whether any such guidance could have retroactive effect.

In addition, legislation recently has been introduced for consideration in the United States Congress that, if enacted into law, would require current accrual of interest income on prepaid derivative contracts with a term of more than one year (which would include financial instruments similar to the Notes) acquired after the date of the legislation’s enactment. The legislation also would implement special income accrual rules for publicly traded prepaid derivative contracts. The schedule for consideration of this legislation and the outcome of the legislative process currently is uncertain.

Buffer Notes       9

 

Any capital gain realized by a holder that is not a U.S. person (“Non-U.S. Holder”) upon the sale or other disposition of the Notes should not be subject to U.S. federal income tax if:

 

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such gain is not effectively connected with a U.S. trade or business of such holder, and

 

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in the case of an individual, such individual is not present in the United States for 183 days or more in the taxable year of the sale or other disposition or the gain is not attributable to a fixed place of business maintained by such individual in the United States.

In the Notice discussed above, the IRS and U.S. Treasury Department specifically question whether, and to what degree, payments (or deemed accruals) in respect of a prepaid forward contract should be subject to withholding. Accordingly, it is possible that future guidance could be issued as a result of the Notice requiring us to withhold on payments made to non-U.S. Holders under the Notes.

You should refer to the pricing supplement related to this offering for additional information relating to U.S. federal income tax and should consult your own tax advisors to determine tax consequences particular to your situation.

Description of the Dow Jones Industrial AverageSM

Unless otherwise stated, we have derived all information regarding the Dow Jones Industrial AverageSM provided in this offering summary, including its composition, method of calculation and changes in components, from Dow Jones & Company, Inc., which we refer to as Dow Jones, or other publicly available sources. Such information reflects the policies of, and is subject to change by, Dow Jones. Dow Jones is under no obligation to continue to publish, and may discontinue or suspend the publication of, the Dow Jones Industrial AverageSM at any time. None of Citigroup Inc., Citigroup Funding, Citigroup Global Markets or the trustee assumes any responsibility for the accuracy or completeness of any information relating to the Dow Jones Industrial AverageSM.

The Dow Jones Industrial AverageSM is a benchmark of performance for leading companies in the U.S. stock market. The index consists of 30 “blue-chip” U.S. stocks, although this has not always been the case. The index initially consisted of twelve common stocks and was first published in The Wall Street Journal in 1896. The index was increased to include 20 common stocks in 1916 and to 30 common stocks in 1928. The number of common stocks in the index has remained at 30 since 1928, and, in an effort to maintain continuity, the constituent corporations represented in the index have been changed on a relatively infrequent basis.

The Dow Jones Industrial AverageSM is a price-weighted index (i.e., the weight of an underlying stock in the index is based on its price per share rather than the total market capitalization of the issuer of such component stock) comprised of 30 common stocks chosen by the editors of The Wall Street Journal from companies outside of the transportation or utility business that are representative of the broad market of U.S. industry. The corporations represented in the Dow Jones Industrial AverageSM tend to be leaders within their respective industries and their stocks are typically widely held by individuals and institutional investors. Changes in the composition of the index are made entirely by the editors of The Wall Street Journal without consultation with the corporations represented in the index, any stock exchange, any official agency, or Citigroup Funding Inc. Changes to the common stocks included in the index tend to

10    Buffer Notes

 

be made infrequently. Historically, most substitutions have been the result of mergers, but from time to time, changes may be made to achieve what the editors of The Wall Street Journal deem to be a more accurate representation of the broad market of U.S. industry. In choosing a new corporation for the Dow Jones Industrial AverageSM, the editors of The Wall Street Journal look for leading industrial companies with a successful history of growth and wide interest among investors. The component stocks of the index may be changed at any time for any reason. Dow Jones, publisher of The Wall Street Journal, is not affiliated with Citigroup Funding Inc. and has not participated in any way in the issuance of the Notes.

The value of the Dow Jones Industrial AverageSM is the sum of the primary exchange prices of each of the 30 common stocks included in the index, divided by a divisor that is designed to provide meaningful continuity in the value of the index. Because the index is price-weighted, stock splits or changes in the component stocks could result in distortions in the index value. In order to prevent such distortions related to extrinsic factors, the divisor is changed in accordance with a mathematical formula that reflects adjusted proportions within the index. The current divisor of the index is published daily in The Wall Street Journal and other publications. In addition, other statistics based on the index may be found in a variety of publicly available sources.

THE DOW JONES INDUSTRIAL AVERAGE SM DOES NOT REFLECT THE PAYMENT OF DIVIDENDS ON THE STOCKS UNDERLYING IT AND THEREFORE THE RETURN ON THE NOTES WILL NOT PRODUCE THE SAME RETURN YOU WOULD RECEIVE IF YOU WERE TO PURCHASE SUCH UNDERLYING STOCKS AND HOLD THEM UNTIL THE MATURITY DATE.

Buffer Notes       11

 

Historical Data on the Dow Jones Industrial AverageSM

Monthly Closing Values

The following table sets forth the closing value of the Dow Jones Industrial AverageSM for each month in the period from January 2003 through March 2008. These historical data on the Dow Jones Industrial AverageSM are not indicative of the future performance of the Dow Jones Industrial AverageSM or what the market value of the Notes may be. Any historical upward or downward trend in the value of the Dow Jones Industrial AverageSM during any period set forth below is not an indication that the Dow Jones Industrial Average SM is more or less likely to increase or decrease at any time during the term of the Notes.

 

     2003   2004   2005   2006   2007   2008

January

   8053.81   10488.07   10489.94   10864.86   12621.69   12650.36

February

   7891.08   10583.92   10766.23   10993.41   12268.63   12266.39

March

   7992.13   10357.70   10503.76   11109.32   12354.35   12262.89

April

   8480.09   10225.57   10192.51   11367.14   13062.91    

May

   8850.26   10188.45   10467.48   11168.31   13627.64    

June

   8985.44   10435.48   10274.97   11150.22   13408.62    

July

   9233.80   10139.71   10640.91   11185.68   13211.99    

August

   9415.82   10173.92   10481.60   11381.15   13357.74    

September

   9275.06   10080.27   10568.70   11679.07   13895.63    

October

   9801.12   10027.47   10440.07   12080.73   13930.01    

November

   9782.46   10428.02   10805.87   12221.93   13371.72    

December

   10453.92   10783.01   10717.50   12463.15   13264.82    

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Historical Graph

The following graph illustrates the historical performance of the Dow Jones Industrial AverageSM based on the daily closing values from January 2, 2003 to April 24, 2008. Past values of the Dow Jones Industrial AverageSM are not indicative of future values of the Dow Jones Industrial AverageSM.

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On April 24, 2008, the closing value of the Dow Jones Industrial AverageSM was 12848.95.

Additional information on the Dow Jones Industrial AverageSM, including its makeup, method of calculation and changes in its components, is included in the pricing supplement related to this offering under “Description of the Dow Jones Industrial AverageSM.” None of Citigroup Funding, Citigroup Inc., or Citigroup Global Markets assumes any responsibility for the accuracy or completeness of such information. You should also be aware that an investment in the Notes does not entitle you to any dividends, voting rights or any other ownership or other interest in respect of the stocks of the companies included in the Dow Jones Industrial AverageSM.

License Agreement

Dow Jones and Citigroup Global Markets have entered into a non-exclusive license agreement providing for the license to Citigroup Inc., Citigroup Funding and its affiliates, in exchange for a fee, of the right to use indices owned and published by Dow Jones in connection with certain financial instruments, including the Notes.

The license agreement between Dow Jones and Citigroup Global Markets provides that the following language must be stated in this offering summary.

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The Notes are not sponsored, endorsed, sold or promoted by Dow Jones (including its affiliates) (Dow Jones, with its affiliates, is referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Notes. The Corporations make no representation or warranty, express or implied to the owners of the Notes or any member of the public regarding the advisability of investing in securities generally or in the Notes particularly, or the ability of the Dow Jones Industrial AverageSM to track general stock market performance. The Corporations’ only relationship to Citigroup Global Markets Inc. and its affiliates (the “Licensee”) is in the licensing of certain trademarks, trade names and service marks of Dow Jones and of the Dow Jones Industrial AverageSM, which is determined, composed and calculated by Dow Jones without regard to the Licensee or the Notes. Dow Jones has no obligation to take the needs of the Licensee or the owners of the Notes into consideration in determining, composing or calculating the Dow Jones Industrial AverageSM. The Corporations are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of the Notes to be issued or in the determination or calculation of the equation by which the Notes are to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Notes.

THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATIONS OF THE DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED BY THE LICENSEE, OWNERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

Hypothetical Maturity Payments

The examples below show hypothetical maturity payments on the Notes for a range of Ending Values of Dow Jones Industrial AverageSM. The following examples are for purposes of illustration only and would provide different results if different assumptions were applied. The value of the actual amount you receive in respect of the Notes at maturity will depend on the actual Note Return Amount, which, in turn, will depend on the actual Starting Value, Ending Value, Upside Participation Rate and maximum total return. All of the hypothetical examples assume an investment is made on the initial issue date and held to maturity and are based on the following additional assumptions:

 

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Issue Price: $10.00 per Note

 

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Starting Value: 12190

 

O  

Upside Participation Rate: 300%

 

O  

Buffer Value: 10%

 

O  

Maturity: 2 years

 

O  

Maximum Total Return: 20% (10% per annum on a simple interest basis)

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TABLE OF HYPOTHETICAL PAYMENTS AT MATURITY

 

Hypothetical
Ending Value

of the
Dow Jones

Industrial
AverageSM

    Hypothetical
Dow Jones
Industrial
AverageSM
Percentage
Change1		   Hypothetical
Return
on Notes2		   Hypothetical
Per Annum
Return on
Notes3		   Hypothetical
Note Return
Amount		    Hypothetical
Maturity
Payment
per Note

0

    -100.00%   -90.00%   -45.00%   -$9.00    $1.00

6095

    -50.00%   -40.00%   -20.00%   -$4.00    $6.00

9143

    -25.00%   -15.00%   -7.50%   -$1.50    $8.50

9447

    -22.50%   -12.50%   -6.25%   -$1.25    $8.75

9752

    -20.00%   -10.00%   -5.00%   -$1.00    $9.00

10057

    -17.50%   -7.50%   -3.75%   -$0.75    $9.25

10362

    -15.00%   -5.00%   -2.50%   -$0.50    $9.50

10666

    -12.50%   -2.50%   -1.25%   -$0.25    $9.75

10971

    -10.00%   0.00%   0.00%   $0.00    $10.00

11276

    -7.50%   0.00%   0.00%   $0.00    $10.00

11581

    -5.00%   0.00%   0.00%   $0.00    $10.00

11885

    -2.50%   0.00%   0.00%   $0.00    $10.00

12190

    0.00%   0.00%   0.00%   $0.00    $10.00

12495

    2.50%   7.50%   3.75%   $0.75    $10.75

12800

    5.00%   15.00%   7.50%   $1.50    $11.50

13104

    7.50%   20.00%   10.00%   $2.00    $12.00

13409

    10.00%   20.00%   10.00%   $2.00    $12.00

13714

    12.50%   20.00%   10.00%   $2.00    $12.00

14019

    15.00%   20.00%   10.00%   $2.00    $12.00

14323

    17.50%   20.00%   10.00%   $2.00    $12.00

14628

    20.00%   20.00%   10.00%   $2.00    $12.00

14933

    22.50%   20.00%   10.00%   $2.00    $12.00

15238

    25.00%   20.00%   10.00%   $2.00    $12.00

15542

    27.50%   20.00%   10.00%   $2.00    $12.00

15847

    30.00%   20.00%   10.00%   $2.00    $12.00

16152

    32.50%   20.00%   10.00%   $2.00    $12.00

16457

    35.00%   20.00%   10.00%   $2.00    $12.00

 

(1)

Excludes any dividends paid on the stocks in the Dow Jones Industrial AverageSM.

(2) The percentage return for the entire term of the Notes limited to the hypothetical 20% maximum total return.
(3) Calculated on a simple interest basis.

ERISA and IRA Purchase Considerations

Employee benefit plans subject to ERISA, entities the assets of which are deemed to constitute the assets of such plans, governmental or other plans subject to laws substantially similar to ERISA and retirement accounts (including Keogh, SEP and SIMPLE plans, individual retirement accounts and individual retirement annuities) are permitted to purchase the Notes as long as either (A)(1) no Citigroup Global Markets affiliate or employee is a fiduciary to such plan or retirement account that has or exercises any discretionary authority or control with respect to the assets of such plan or retirement account used to purchase the Notes or renders investment advice with respect to those assets and (2) such plan or retirement account is

Buffer Notes       15

 

paying no more than adequate consideration for the Notes or (B) its acquisition and holding of the Notes is not prohibited by any such provisions or laws or is exempt from any such prohibition.

However, individual retirement accounts, individual retirement annuities and Keogh plans, as well as employee benefit plans that permit participants to direct the investment of their accounts, will not be permitted to purchase or hold the Notes if the account, plan or annuity is for the benefit of an employee of Citigroup Global Markets or a family member and the employee receives any compensation (such as, for example, an addition to bonus) based on the purchase of Notes by the account, plan or annuity.

You should refer to the section “ERISA Matters” in the pricing supplement related to this offering for more information.

Additional Considerations

If the closing value of the Dow Jones Industrial AverageSM is not available on the Valuation Date, the Calculation Agent may determine the Ending Value in accordance with the procedures set forth in the pricing supplement related to this offering. In addition, if the Dow Jones Industrial AverageSM is discontinued, the Calculation Agent may determine the Ending Value by reference to a successor index or, if no successor index is available, in accordance with the procedures last used to calculate the index prior to any such discontinuance. You should refer to the sections “Description of the Notes—Note Return Amount” and “—Discontinuance of the Dow Jones Industrial AverageSM” in the pricing supplement for more information.

Citigroup Global Markets is an affiliate of Citigroup Funding. Accordingly, the offering will conform with the requirements set forth in Rule 2720 of the NASD Conduct Rules adopted by the of the Financial Industry Regulatory Authority.

Client accounts over which Citigroup Inc. or its subsidiaries have investment discretion are NOT permitted to purchase the Notes, either directly or indirectly.

LOGO

 

 

“Dow Jones Industrial AverageSM” is a service mark of Dow Jones & Company, Inc. and has been licensed for use by Citigroup Funding Inc. The Notes have not been licensed for use by Citigroup Funding Inc. These trademarks have been licensed for use for certain purposes by Citigroup Funding Inc. The Notes have not been passed on by Dow Jones & Company, Inc. The Notes are not sponsored, endorsed, sold or promoted by Dow Jones & Company, Inc. and Dow Jones & Company, Inc. does not make any warranties or bear any liability with respect to the Notes.

© 2008 Citigroup Global Markets Inc. All rights reserved. Citi and Citi Arc Design are trademarks and service marks of Citigroup Inc. or its subsidiaries and are used and registered throughout the world.