8-KCorporate ChangesExhibits & Filings

CITIGROUP INC 8-K Report, Bylaw Amendment (Oct 29, 2014)

Filed October 29, 2014For Securities:CC-PNC-PR

Summary

Citigroup Inc. (C) filed an 8-K report on October 28, 2014, to announce the creation of a new series of preferred stock. The company filed a Certificate of Designations with the Secretary of State of Delaware, establishing the "5.800% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series N." This action officially amended Citigroup's Restated Certificate of Incorporation to include these new preferred stock terms. The filing also includes several exhibits related to this new preferred stock issuance. These exhibits detail the Underwriting Agreement for the sale of Depositary Shares representing interests in this preferred stock, the Certificate of Designations itself, the Deposit Agreement governing the depositary shares, and a legal opinion from Skadden, Arps, Slate, Meagher & Flom LLP. This strategic move indicates Citigroup's intention to raise capital or manage its capital structure through the issuance of preferred equity.

Key Highlights

  • 1Citigroup Inc. filed a Certificate of Designations to establish a new series of preferred stock: Series N, 5.800% Fixed Rate / Floating Rate Noncumulative Preferred Stock.
  • 2The filing amends Citigroup's Restated Certificate of Incorporation to include the terms of this new preferred stock series.
  • 3The effective date of the Certificate of Designations was upon filing with the Secretary of State of Delaware on October 28, 2014.
  • 4The report includes an Underwriting Agreement dated October 22, 2014, relating to the offer and sale of Depositary Shares for this preferred stock.
  • 5A Deposit Agreement dated October 29, 2014, is also filed, outlining the terms for the Depositary Shares representing interests in the preferred stock.
  • 6The filing signifies a corporate action related to capital management through the issuance of preferred equity.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the establishment of a new series of preferred stock by Citigroup Inc., designated as the 5.800% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series N. This involves amending the company's Certificate of Incorporation to define the terms of this new stock.

Issuing new preferred stock can serve various financial purposes, such as raising capital, improving the company's capital structure, or managing regulatory capital requirements. The specific terms, like the 5.800% fixed/floating rate and noncumulative nature, will determine the cost of this capital and its impact on earnings per share and dividend payouts.

Depositary Shares are typically issued by a company to represent ownership of a fraction of a share of preferred stock. In this case, each Depositary Share represents a 1/25th interest in a share of the new Series N preferred stock. This structure can make it easier for smaller investors to trade in preferred stock, as the price per depositary share is generally lower than the price per full share.

'Noncumulative' means that if Citigroup is unable to pay dividends on its preferred stock in any given period, those missed dividends are not carried forward. The company is not obligated to pay those missed dividends in the future before it can pay dividends on its common stock.