Citigroup Inc.
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Non-Callable Floating Rate Notes Due January
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, 2025
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General Information
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Temporary adjustment period:
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For a period of approximately four months following issuance of the notes, the price, if any, at which CGMI would be willing to buy the notes from investors, and the value that will be indicated for the notes on any brokerage account statements prepared by CGMI or its affiliates (which value CGMI may also publish through one or more financial information vendors), will reflect a temporary upward adjustment from the price or value that would otherwise be determined. This temporary upward adjustment represents a portion of the hedging profit expected to be realized by CGMI or its affiliates over the term of the notes. The amount of this temporary upward adjustment will decline to zero on a straight-line basis over the four-month temporary adjustment period. However, CGMI is not obligated to buy the notes from investors at any time. See “Risk Factors—The notes will not be listed on any securities exchange and you may not be able to sell them prior to maturity.”
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U.S. federal income tax considerations:
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In the opinion of our counsel, Davis Polk & Wardwell LLP,
the notes will be treated as “variable rate debt instruments” for U.S. federal income tax purposes. Under this treatment,
stated interest on the notes will be taxable to a U.S. Holder (as defined in the accompanying prospectus supplement) as ordinary
interest income at the time it accrues or is received in accordance with the U.S. Holder’s method of tax accounting. 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 realized on the disposition (other than any amount attributable to accrued interest, which will be treated as
a payment of interest) and the U.S. Holder’s adjusted tax basis in the note. A U.S. Holder’s adjusted tax basis in
a note generally will equal the cost of the note to the U.S. Holder. Such gain or loss 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.
Subject to the discussion below, under current law Non-U.S. Holders
(as defined in the accompanying prospectus supplement) generally will not be subject to U.S. federal withholding or income tax
with respect to interest paid on and amounts received on the sale, exchange or retirement of the notes if they comply with applicable
certification requirements. Special rules apply to Non-U.S. Holders whose income on the notes is effectively connected with the
conduct of a U.S. trade or business or who are individuals present in the United States for 183 days or more in a taxable year.
As discussed in the section of the accompanying prospectus supplement
entitled “United States Federal Tax Considerations,” withholding under legislation commonly referred to as “FATCA”
(if applicable) will generally apply to amounts treated as interest paid with respect to the notes and to the payment of gross
proceeds of a disposition (including a retirement) of the notes. However, under an Internal Revenue Service notice, withholding
under “FATCA” will apply to payments of gross proceeds (other than amounts treated as interest) only with respect to
dispositions after December 31, 2018. You should consult your tax adviser regarding the potential application of “FATCA”
to the notes.
You should read the section entitled “United States
Federal Tax Considerations” in the accompanying prospectus supplement. The preceding discussion, when read in combination
with that section, constitutes the full opinion of Davis Polk & Wardwell LLP regarding the material U.S. federal tax consequences
of owning and disposing of the notes.
You should also consult your tax adviser regarding all aspects
of the U.S. federal tax consequences of an investment in the notes and any tax consequences arising under the laws of any state,
local or non-U.S. taxing jurisdiction.
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Trustee:
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The Bank of New York Mellon (as trustee under an indenture dated November 13, 2013) will serve as trustee for the notes.
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Use of proceeds and hedging:
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The net proceeds received from the sale of the notes will be
used for general corporate purposes and, in part, in connection with hedging our obligations under the notes through one or more
of our affiliates.
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 and/or futures, based on 3-month U.S.
dollar LIBOR and/or taking positions in any other available securities or instruments that we may wish to use in connection with
such hedging. It is possible that our affiliates may profit from this hedging activity, even if the value of the notes declines.
Profit or loss from this hedging activity could affect the price at which Citigroup Inc.’s affiliate, CGMI, may be willing
to purchase your notes in the
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Citigroup Inc.
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Non-Callable Floating Rate Notes Due January
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, 2025
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secondary market. For further information on our use of proceeds and hedging,
see “Use of Proceeds and Hedging” in the accompanying prospectus.
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ERISA and IRA purchase considerations:
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Please refer to “Benefit Plan Investor Considerations” in the accompanying prospectus supplement for important information for investors that are ERISA or other benefit plans or whose underlying assets include assets of such plans.
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Fees and selling concessions:
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CGMI, an affiliate of Citigroup Inc. and the underwriter of the
sale of the notes, is acting as principal and will receive an underwriting fee of $5.50 for each note sold in this offering (or
up to $5.00 for each note sold to fee-based advisory accounts). The actual underwriting fee will be equal to $5.50 for each note
sold by CGMI directly to the public and will otherwise be equal to the selling concession provided to selected dealers, as described
in this paragraph. CGMI will pay selected dealers not affiliated with CGMI a selling concession of $5.50 for each note they sell
to accounts other than fee-based advisory accounts. CGMI will pay selected dealers not affiliated with CGMI, which may include
dealers acting as custodians, a variable selling concession of up to $5.00 for each note they sell to fee-based advisory accounts.
Additionally, it is possible that CGMI and its affiliates may
profit from expected hedging activity related to this offering, even if the value of the notes declines. You should refer to “Risk
Factors” above and the section “Use of Proceeds and Hedging” in the accompanying prospectus.
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Supplemental information regarding plan of distribution; conflicts of interest:
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The terms and conditions set forth in the Global Selling Agency
Agreement dated November 13, 2013 among Citigroup Inc. and the agents named therein, including CGMI, govern the sale and purchase
of the notes.
The notes will not be listed on any securities exchange.
In order to hedge its obligations under the notes, Citigroup
Inc. expects to enter into one or more swaps or other derivatives transactions with one or more of its affiliates. You should refer
to the sections “Risk Factors—Hedging and trading activity by Citigroup Inc. could result in a conflict of interest,”
and “General Information—Use of proceeds and hedging” in this pricing supplement and the section “Use of
Proceeds and Hedging” in the accompanying prospectus.
CGMI is an affiliate of Citigroup Inc. Accordingly, the offering
of the notes will conform with the requirements addressing conflicts of interest when distributing the securities of an affiliate
set forth in Rule 5121 of the Conduct Rules of the Financial Industry Regulatory Authority, Inc. Client accounts over which Citigroup
Inc., its subsidiaries or affiliates of its subsidiaries have investment discretion are not permitted to purchase the notes, either
directly or indirectly, without the prior written consent of the client. See “Plan of Distribution; Conflicts of Interest”
in the accompanying prospectus supplement for more information.
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Calculation agent:
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Citibank, N.A., an affiliate of Citigroup Inc., will serve as calculation agent for the notes. 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 Inc. and the holders of the notes. Citibank, N.A. is obligated to carry out its duties and functions as calculation agent in good faith and using its reasonable judgment.
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Paying agent:
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Citibank, N.A. will serve as paying agent and registrar and will also hold the global security representing the notes as custodian for The Depository Trust Company (“DTC”).
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Contact:
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Clients may contact their local brokerage representative. Third party distributors may contact Citi Structured Investment Sales at (212) 723-7005.
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We encourage you to also read the accompanying prospectus
supplement and prospectus, which can be accessed via the hyperlink on the cover page of this pricing supplement.
Determination of Interest Payments
On each interest payment date, the amount of each interest payment
will equal (i) the stated principal amount of the notes multiplied by the interest rate in effect during the applicable interest
period
multiplied by
(ii) the number of days in the applicable interest period
divided by
360.
Citigroup Inc.
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Non-Callable Floating Rate Notes Due January
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, 2025
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Determination of 3-month U.S. Dollar LIBOR
3-month U.S. dollar LIBOR is a daily reference rate fixed in
U.S. dollars based on the interest rates at which banks borrow funds from each other for a term of three months, in marketable
size, in the London interbank market. For any relevant date, 3-month U.S. dollar LIBOR will equal the rate for 3-month U.S. dollar
LIBOR appearing on Reuters page “LIBOR01” (or any successor page as determined by the calculation agent) as of 11:00
am (London time) on that date.
If a rate for 3-month U.S. dollar LIBOR is not published on Reuters
page “LIBOR01” (or any successor page as determined by the calculation agent) on any day on which the rate for 3-month
U.S. dollar LIBOR is required, then the calculation agent will request the principal London office of each of five major reference
banks in 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 three months as of 11:00 am (London time) on
such day. If at least two such quotations are so provided, the rate for 3-month U.S. dollar LIBOR 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
New York City 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 three months as of approximately 11:00 am (New York City time) on such day. If at least two such rates are so
provided, the rate for 3-month U.S. dollar LIBOR will be the arithmetic mean of such rates. If fewer than two such rates are so
provided, then the rate for 3-month U.S. dollar LIBOR will be 3-month U.S. dollar LIBOR in effect as of 11:00 am (New York City
time) on the immediately preceding London business day.
A “business day” means any day that is not a Saturday
or Sunday and that, in New York City, is not a day on which banking institutions are authorized or obligated by law or executive
order to close.
A “London business day” means any day on which dealings
in deposits in U.S. dollars are transacted in the London interbank market.
Historical Information on 3-month U.S. Dollar
LIBOR
3-month U.S. dollar LIBOR was 1.04344% on January 20, 2017.
The graph below shows the published daily rate for 3-month U.S.
dollar LIBOR for each day it was available from January 2, 2007 to January 20, 2017. We obtained the values below from Bloomberg
L.P., without independent verification. You should not take the historical performance of 3-month U.S. dollar LIBOR as an indication
of future performance.
Historical 3-Month U.S.
Dollar LIBOR
January 2, 2007 to January
20, 2017
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Citigroup Inc.
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Non-Callable Floating Rate Notes Due January
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, 2025
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Certain Selling Restrictions
Hong Kong Special Administrative Region
The contents of this pricing supplement and the accompanying
prospectus supplement and prospectus have not been reviewed by any regulatory authority in the Hong Kong Special Administrative
Region of the People’s Republic of China (“Hong Kong”). Investors are advised to exercise caution in relation
to the offer. If investors are in any doubt about any of the contents of this pricing supplement and the accompanying prospectus
supplement and prospectus, they should obtain independent professional advice.
The notes have not been offered or sold and will not be offered
or sold in Hong Kong by means of any document, other than
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(i)
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to persons whose ordinary business is to buy or sell shares or debentures (whether as principal or agent); or
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(ii)
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to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “Securities
and Futures Ordinance”) and any rules made under that Ordinance; or
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(iii)
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in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance
(Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and
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There is no advertisement, invitation or document relating to
the notes which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except
if permitted to do so under the securities laws of Hong Kong) other than with respect to securities which are or are intended to
be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and
Futures Ordinance and any rules made under that Ordinance.
Non-insured Product: These notes are not insured by any governmental
agency. These notes are not bank deposits and are not covered by the Hong Kong Deposit Protection Scheme.
Singapore
This pricing supplement and the accompanying prospectus supplement
and prospectus have not been registered as a prospectus with the Monetary Authority of Singapore, and the notes will be offered
pursuant to exemptions under the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”).
Accordingly, the notes may not be offered or sold or made the subject of an invitation for subscription or purchase nor may this
pricing supplement or any other document or material in connection with the offer or sale or invitation for subscription or purchase
of any notes be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (a) to an institutional
investor pursuant to Section 274 of the Securities and Futures Act, (b) to a relevant person under Section 275(1) of the Securities
and Futures Act or to any person pursuant to Section 275(1A) of the Securities and Futures Act and in accordance with the conditions
specified in Section 275 of the Securities and Futures Act, or (c) otherwise pursuant to, and in accordance with the conditions
of, any other applicable provision of the Securities and Futures Act. Where the notes are subscribed or purchased under Section
275 of the Securities and Futures Act by a relevant person which is:
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(a)
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a corporation (which is not an accredited investor (as defined in Section 4A of the Securities and Futures Act)) the sole business
of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited
investor; or
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(b)
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a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is
an individual who is an accredited investor, securities (as defined in Section 239(1) of the Securities and Futures Act) of that
corporation or the beneficiaries’ rights and interests (howsoever described) in that trust shall not be transferable for
6 months after that corporation or that trust has acquired the relevant securities pursuant to an offer under Section 275 of the
Securities and Futures Act except:
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(i)
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to an institutional investor or to a relevant person defined in Section 275(2) of the Securities and Futures Act or to any
person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the Securities and Futures Act; or
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(ii)
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where no consideration is or will be given for the transfer; or
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(iii)
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where the transfer is by operation of law; or
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(iv)
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pursuant to Section 276(7) of the Securities and Futures Act; or
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(v)
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as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005
of Singapore.
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Any notes referred to herein may not be registered with any regulator,
regulatory body or similar organization or institution in any jurisdiction.
The notes are Specified Investment Products (as defined in the
Notice on Recommendations on Investment Products and Notice on the Sale of Investment Product issued by the Monetary Authority
of Singapore on 28 July 2011) that is neither listed nor quoted on a securities market or a futures market.
Citigroup Inc.
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Non-Callable Floating Rate Notes Due January
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, 2025
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Non-insured Product: These notes are not insured by any governmental
agency. These notes are not bank deposits. These notes are not insured products subject to the provisions of the Deposit Insurance
and Policy Owners’ Protection Schemes Act 2011 of Singapore and are not eligible for deposit insurance coverage under the
Deposit Insurance Scheme.
© 2017 Citigroup Global Markets Inc. All rights reserved.
Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout
the world.