8-KCorporate ChangesExhibits & Filings

CITIGROUP INC 8-K Report, Bylaw Amendment (Sep 19, 2013)

Filed September 19, 2013For Securities:CC-PNC-PR

Summary

Citigroup Inc. filed an 8-K on September 19, 2013, primarily to announce the establishment of a new series of preferred stock. On September 18, 2013, the company filed a Certificate of Designations with the Delaware Secretary of State, creating the 7.125% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series J. This filing is significant for investors as it details the terms and conditions of a new preferred equity instrument. The establishment of this preferred stock series, which includes an underwriting agreement and a deposit agreement for the offering of depositary shares, suggests Citigroup is potentially raising capital or managing its capital structure. Investors should pay close attention to the details of this preferred stock, including its fixed-to-floating rate nature and noncumulative dividend feature, to understand its risk and return profile within Citigroup's overall capital structure.

Key Highlights

  • 1Citigroup Inc. filed a Certificate of Designations on September 18, 2013, to establish a new series of preferred stock: 7.125% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series J.
  • 2The filing amends Citigroup's Restated Certificate of Incorporation.
  • 3The establishment of this preferred stock series indicates a move to manage or enhance Citigroup's capital structure.
  • 4An Underwriting Agreement dated September 12, 2013, is filed, relating to the offer and sale of Depositary Shares representing interests in this new preferred stock.
  • 5A Deposit Agreement dated September 19, 2013, outlines the terms between Citigroup, the Depositary (Computershare Inc. and Computershare Trust Company, N.A.), and holders of the Depositary Shares.
  • 6The preferred stock features a 7.125% fixed rate that can convert to a floating rate, and its dividends are noncumulative.
  • 7The filing includes an opinion from Skadden, Arps, Slate, Meagher & Flom LLP as an exhibit.

Frequently Asked Questions

The primary purpose of this 8-K filing is to formally announce the establishment of a new series of preferred stock by Citigroup Inc., named the 7.125% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series J.

The Series J preferred stock has a dividend rate that starts at 7.125% fixed but can convert to a floating rate. Importantly, its dividends are noncumulative, meaning if a dividend payment is missed, it is not carried forward to be paid at a later date.

While the filing itself doesn't explicitly state the amount of capital being raised, the inclusion of an Underwriting Agreement for Depositary Shares strongly suggests that Citigroup is undertaking an offering to raise capital through the sale of these preferred securities.

Depositary Shares are typically used to represent ownership of a portion of a class of preferred stock. In this case, each depositary share represents a fraction (1/1,000th) of a share of the new Series J preferred stock, making it more convenient for investors to trade and own.