Prospectus Filed Pursuant to Rule 424(b)(2) (424b2)
July 19 2016 - 2:05PM
Edgar (US Regulatory)
The information in this preliminary
pricing supplement is not complete and may be changed. A registration statement relating to these securities has been filed with
the Securities and Exchange Commission. This preliminary pricing supplement and the accompanying prospectus supplement and prospectus
are not an offer to sell these securities, nor are they soliciting an offer to buy these securities, in any state where the offer
or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY
19, 2016
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Citigroup Inc.
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July
-----
,
2016
Medium-Term Senior Notes,
Series G
Pricing Supplement
No. 2016-CMTNG0958
Filed Pursuant to Rule 424(b)(2)
Registration
Statement No. 333-192302
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Callable Step-Up
Coupon Notes Due August
-----
,
2021
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·
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The
notes mature on August
-----
, 2021. We have the right
to call the notes for mandatory redemption prior to maturity on a quarterly basis beginning
two years after issuance. Unless previously redeemed, the notes pay interest quarterly
at a per annum rate that will increase at pre-set intervals over the term of the notes.
Because of our redemption right, there is no assurance that you will receive interest
payments at the higher interest rates stated below.
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·
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The
notes are unsecured senior debt obligations of Citigroup Inc.
All payments due on
the notes are subject to the credit risk of Citigroup Inc.
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·
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It
is important for you to consider the information contained in this pricing supplement
together with the information contained in the accompanying prospectus supplement and
prospectus. The description of the notes below supplements, and to the extent inconsistent
with replaces, the description of the general terms of the notes set forth in the accompanying
prospectus supplement and prospectus.
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KEY
TERMS
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Issuer:
|
Citigroup Inc.
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Stated principal amount:
|
$1,000 per note
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Aggregate stated principal amount:
|
$
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Pricing date
*
:
|
July , 2016 (expected to be July 29, 2016)
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Original issue date
*
:
|
August , 2016 (three business days after the
pricing date)
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Maturity date
*
:
|
August , 2021 (expected to be August 3, 2021). If
the maturity date is not a business day, then the payment required to be made on the maturity date will be made on the next
succeeding business day with the same force and effect as if it had been made on the maturity date. No additional
interest will accrue as a result of delayed payment.
|
Payment at maturity:
|
$1,000 per note
plus
any accrued and unpaid interest
|
Interest rate per annum
*
:
|
From
and including the original issue date to but excluding August , 2018:
1.50%
From
and including August , 2018 to but excluding August , 2020, unless previously redeemed:
1.60%
From
and including August , 2020 to but excluding the maturity date, unless previously redeemed:
1.70%
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Interest period:
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The period from and including the original issue date to but excluding the immediately
following interest payment date, and each successive period from and including an interest payment date to but excluding the
next interest payment date
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Interest payment dates
*
:
|
Quarterly on the day of each February, May,
August and November of each year (expected to be the 3rd day of each February, May, August and November of each year), commencing
November , 2016, provided that if any such day is not a business day, the applicable interest
payment will be made on the next succeeding business day. No additional interest will accrue on that succeeding business 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, which we refer to as a regular record date, except that the interest payment due at
maturity or upon earlier redemption will be paid to the persons who hold the notes on the maturity date or earlier date of
redemption, as applicable.
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Day count convention:
|
30/360 Unadjusted. See “Determination of Interest Payments” in this
pricing supplement.
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Redemption
*
:
|
Beginning on August , 2018
(expected to be August 3, 2018), we have the right to call the notes for mandatory redemption, in whole and not in part,
on any redemption date and pay to you 100% of the principal amount of the notes plus accrued and unpaid interest to but
excluding the date of such redemption. If we decide to redeem the notes, we will give you notice at least five business
days before the redemption date specified in the notice.
So long as the notes are
represented by global securities and are held on behalf of The Depository Trust Company (“DTC”), redemption notices
and other notices will be given by delivery to DTC. If the notes are no longer represented by global securities and are not held
on behalf of DTC, redemption notices and other notices will be published in a leading daily newspaper in New York City, which
is expected to be
The Wall Street Journal
.
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Redemption dates
*
:
|
August , 2018 (expected to be August 3, 2018)
and each interest payment date thereafter
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Business day:
|
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
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Business day convention:
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Following
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CUSIP/ISIN:
|
17298CES3/ US17298CES35
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Listing:
|
The notes will not be listed on any securities exchange and, accordingly, may
have limited or no liquidity. You should not invest in the notes unless you are willing to hold them to maturity.
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Underwriter:
|
Citigroup Global Markets Inc. (“CGMI”), an affiliate of the issuer.
See “General Information—Supplemental information regarding plan of distribution; conflicts of interest”
in this pricing supplement.
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Underwriting fee and issue price:
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Issue price
(1)
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Underwriting fee
(2)
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Proceeds to issuer
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Per note:
|
$1,000.00
|
$10.00
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$990.00
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Total:
|
$
|
$
|
$
|
* Expected dates are subject to change.
(1) The issue price for investors purchasing the notes in fee-based
advisory accounts will be $990.00 per note, assuming no custodial fee is charged by a selected dealer, and up to $995.00, assuming
the maximum custodial fee is charged by a selected dealer. See “General Information—Fees and selling concessions”
in this pricing supplement.
(2) 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 $10.00 for each note sold in this offering
(or up to $5.00 for each note sold to fee-based advisory accounts). Selected dealers not affiliated with CGMI will receive a selling
concession of $10.00 for each note they sell other than to 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” and “General
Information—Fees and selling concessions” in this pricing supplement for more information.
Investing in the notes involves
risks not associated with an investment in conventional fixed rate debt securities. See “Risk Factors” beginning on
page PS-2.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of the notes or determined that this pricing supplement
and the accompanying prospectus supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
Y
ou
should read this pricing supplement together with the accompanying
prospectus
supplement and prospectus
, each of which can be accessed via the following hyperlink.
Prospectus Supplement and Prospectus each dated November 13, 2013
The
notes are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency, nor are they obligations of, or guaranteed by, a bank.
Citigroup Inc.
|
Callable Step-Up Coupon Notes Due August
-----
, 2021
|
|
Risk Factors
The following is a non-exhaustive list of certain key risk
factors for investors in the notes. You should read the risk factors below together with the risk factors included in the documents
incorporated by reference in the accompanying prospectus, including our most recent Annual Report on Form 10-K and any subsequent
Quarterly Reports on Form 10-Q, which describe risks relating to our business more generally. We also urge you to consult your
investment, legal, tax, accounting and other advisers before you decide to invest in the notes.
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§
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The notes may be redeemed at our option, which limits your ability to accrue interest over the full term of the notes.
We
may redeem the notes, in whole but not in part, on any interest payment date beginning two years after the date of issuance of
the notes upon not less than five business days’ notice. In the event that we redeem the notes, you will receive the principal
amount of the notes and any accrued and unpaid interest to but excluding the date on which the notes are redeemed. In this case,
you will not have the opportunity to continue to accrue and be paid interest to the maturity date of the notes.
|
|
§
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Market interest rates at a particular time will affect our decision to redeem the notes.
It is more likely that we will
call the notes for mandatory redemption prior to their maturity date at a time when the interest rate on the notes is greater than
that which we would pay on a comparable debt security of Citigroup Inc. with a maturity comparable to the remaining term of the
notes. Consequently, if we redeem the notes prior to their maturity, you may not be able to invest in other securities with a similar
level of risk that yield as much interest as the notes.
|
|
§
|
The step-up feature presents different investment considerations than conventional fixed-rate notes.
Unless general
market interest rates rise significantly, you should not expect to earn the higher stated interest rates, which are applicable
only after the second year of the term of the notes, because the notes are more likely to be redeemed prior to maturity if general
market interest rates remain the same or fall during the term of the notes. When determining whether to invest in the notes, you
should consider, among other things, the overall annual percentage rate of interest to maturity or the various potential redemption
dates as compared to other equivalent investment alternatives rather than the higher stated interest rates or any potential interest
payments you may receive after the second year following the issuance of the notes. If general market interest rates increase beyond
the rates provided by the notes during the term of the notes, we are less likely to redeem the notes, and if we do not redeem the
notes investors will be holding notes that bear interest at below-market rates.
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|
§
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The notes are subject to the credit risk of Citigroup Inc., and any actual or anticipated changes to its credit ratings
or credit spreads may adversely affect the value of the notes.
You are subject to the credit risk of Citigroup Inc. If Citigroup
Inc. defaults on its obligations under the notes, your investment would be at risk and you could lose some or all of your investment.
As a result, the value of the notes will be affected by changes in the market’s view of Citigroup Inc.’s creditworthiness.
Any decline, or anticipated decline, in Citigroup Inc.’s credit ratings or increase, or anticipated increase, in the credit
spreads charged by the market for taking Citigroup Inc. credit risk is likely to adversely affect the value of the notes.
|
|
§
|
The notes will not be listed on any securities exchange and you may not be able to sell them prior to maturity.
The
notes will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the notes. CGMI
currently intends to make a secondary market in relation to the notes and to provide an indicative bid price for the notes on a
daily basis. Any indicative bid price for the notes provided by CGMI will be determined in CGMI’s sole discretion, taking
into account prevailing market conditions and other relevant factors, and will not be a representation by CGMI that the notes can
be sold at that price or at all. CGMI may suspend or terminate making a market and providing indicative bid prices without notice,
at any time and for any reason. If CGMI suspends or terminates making a market, there may be no secondary market at all for the
notes because it is likely that CGMI will be the only broker-dealer that is willing to buy your notes prior to maturity. Accordingly,
an investor must be prepared to hold the notes until maturity.
|
|
§
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Immediately following issuance, any secondary market bid price provided by CGMI, and the value that will be indicated on
any brokerage account statements prepared by CGMI or its affiliates, will reflect a temporary upward adjustment.
The amount
of this temporary upward adjustment will steadily decline to zero over the temporary adjustment period. See “General Information—Temporary
adjustment period” in this pricing supplement.
|
|
§
|
Secondary market sales of the notes may result in a loss of principal.
You will be entitled to receive at least the
full stated principal amount of your notes, subject to the credit risk of Citigroup Inc., only if you hold the notes to maturity
or redemption. If you are able to sell your notes in the secondary market prior to maturity or redemption, you are likely to receive
less than the stated principal amount of the notes.
|
|
§
|
The inclusion of underwriting fees and projected profit from hedging in the issue price is likely to adversely affect secondary
market prices.
Assuming no changes in market conditions or other relevant factors, the price, if any, at which CGMI may be
willing to purchase the notes in secondary market transactions will likely be lower than the issue price since the issue price
of the notes will include, and secondary market prices are likely to exclude, underwriting fees paid with respect to the notes,
as well as the cost of hedging our obligations under the notes. The cost of hedging includes the projected profit that our affiliates
may realize in consideration for assuming the risks inherent in managing the hedging transactions. The secondary market prices
for the notes are also likely to be reduced by the costs of unwinding the related hedging transactions. Our affiliates may realize
a profit from the expected hedging activity even if the value of the notes declines. In addition, any secondary market prices for
the notes may differ from values determined by pricing models used by CGMI, as a result of dealer discounts, mark-ups or other
transaction costs.
|
Citigroup Inc.
|
Callable Step-Up Coupon Notes Due August
-----
, 2021
|
|
|
§
|
The price at which you may 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.
A number of factors will influence the value of the notes in any secondary market
that may develop and the price at which CGMI may be willing to purchase the notes in any such secondary market, including: interest
rates in the market and the volatility of such rates, the time remaining to maturity of the notes, hedging activities by our affiliates,
fees and projected hedging fees and profits, expectations about whether we are likely to redeem the notes and any actual or anticipated
changes in the credit ratings, financial condition and results of Citigroup Inc. The value of the notes will vary and is likely
to be less than the issue price at any time prior to maturity or redemption , and sale of the notes prior to maturity or redemption
may result in a loss.
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General Information
|
Temporary adjustment period:
|
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.”
|
U.S. federal income tax considerations:
|
The notes will be treated for U.S. federal income tax purposes
as fixed rate debt instruments that are issued without original issue discount. See “United States Federal Tax Considerations—Tax
Consequences to U.S. Holders—Original Issue Discount” in the accompanying prospectus supplement for further information
regarding the treatment under the original issue discount rules of debt instruments that are subject to early redemption. Under
those rules, the notes will be deemed to be reissued if we do not exercise our redemption right prior to an increase in the notes’
interest rate. The rules governing short-term debt instruments may apply to a note deemed reissued in conjunction with the final
scheduled increase in the interest rate. You should consult your tax adviser concerning the potential application of these rules.
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 payments of interest 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.
Both U.S. and non-U.S. persons considering an investment in the
notes should read the discussion under “United States Federal Tax Considerations,” and in particular the sections entitled
“United States Federal Tax Considerations—Tax Consequences to U.S. Holders” and “—Tax Consequences
to Non-U.S. Holders” in the accompanying prospectus supplement for more information.
|
Trustee:
|
The Bank of New York Mellon (as trustee under an indenture dated November 13, 2013) will serve as trustee for the notes.
|
Use of proceeds and hedging:
|
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, 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 secondary
market. For further information on our use of proceeds and hedging, see “Use of Proceeds and Hedging” in the accompanying
prospectus.
|
ERISA and IRA purchase
|
Please refer to “Benefit Plan Investor Considerations” in the accompanying prospectus
|
Citigroup Inc.
|
Callable Step-Up Coupon Notes Due August
-----
, 2021
|
|
considerations:
|
supplement for important information for investors that are ERISA or other benefit plans or whose underlying assets include
assets of such plans.
|
Fees and selling concessions:
|
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 $10.00 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 $10.00 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 $10.00 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.
|
Supplemental information regarding plan of distribution; conflicts of interest:
|
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 section “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.
|
Paying agent:
|
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”).
|
Contact:
|
Clients may contact their local brokerage representative. Third party distributors may contact Citi Structured Investment Sales at (212) 723-7005.
|
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
divided by
(ii) 4.
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
|
(i)
|
to persons whose ordinary business is to buy or sell shares or debentures (whether as principal or agent); or
|
|
(ii)
|
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
|
Citigroup Inc.
|
Callable Step-Up Coupon Notes Due August
-----
, 2021
|
|
|
(iii)
|
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
|
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:
|
(a)
|
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
|
|
(b)
|
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:
|
|
(i)
|
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
|
|
(ii)
|
where no consideration is or will be given for the transfer;
or
|
|
(iii)
|
where the transfer is by operation of law; or
|
|
(iv)
|
pursuant to Section 276(7) of the Securities and Futures
Act; or
|
|
(v)
|
as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005
of Singapore.
|
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.
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.
Citigroup Inc.
|
Callable Step-Up Coupon Notes Due August
-----
, 2021
|
|
Additional Information
We reserve the right to withdraw, cancel or modify any offering
of the notes and to reject orders in whole or in part prior to their issuance.
© 2016 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.
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