8-KCorporate ChangesExhibits & Filings

CITIGROUP INC 8-K Report, Bylaw Amendment (Sep 12, 2019)

Filed September 12, 2019For Securities:CC-PNC-PR

Summary

Citigroup Inc. (C) filed an 8-K on September 12, 2019, to report the establishment of a new series of preferred stock. Specifically, the company filed a Certificate of Designations with the Secretary of State of Delaware, creating the 5.000% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series U. This filing formally amends Citigroup's Restated Certificate of Incorporation and was effective immediately upon filing. This action signals Citigroup's intent to issue new preferred equity. The filing includes the Underwriting Agreement, the Certificate of Designations itself, a Deposit Agreement related to the issuance of depositary shares representing interests in this preferred stock, and a legal opinion. Investors should note that this is a disclosure of the authorization and terms of the new preferred stock series, which can be used for capital raising or other corporate finance activities. The specific terms, such as the 5.000% fixed rate that can convert to a floating rate and its noncumulative nature, are detailed in the exhibits.

Key Highlights

  • 1Citigroup Inc. established a new series of preferred stock, designated as 5.000% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series U.
  • 2The establishment of this preferred stock series was formally approved through a Certificate of Designations filed with the State of Delaware.
  • 3This filing amends Citigroup's Restated Certificate of Incorporation.
  • 4The new preferred stock has a 5.000% fixed rate that can convert to a floating rate.
  • 5The preferred stock is characterized as noncumulative, meaning missed dividend payments do not accrue.
  • 6The filing includes the Underwriting Agreement, Certificate of Designations, Deposit Agreement, and legal opinion as exhibits.
  • 7This action indicates potential future capital raising activities through the issuance of this preferred stock or associated depositary shares.

Frequently Asked Questions

The main purpose of this 8-K filing is to formally announce and document the creation of a new series of preferred stock by Citigroup Inc., named 5.000% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series U. This involves amending the company's corporate charter to authorize this new class of stock.

The Series U preferred stock has a dividend rate that is initially fixed at 5.000%, but it also has the capability to convert to a floating rate. Importantly, it is designated as noncumulative, meaning that if Citigroup misses a dividend payment on this stock, those missed payments do not accumulate and are not owed to shareholders in the future.

This filing signifies the authorization and formal establishment of the terms for the new preferred stock series. While the filing includes an Underwriting Agreement, indicating plans for an offering, it doesn't necessarily mean the stock has been fully issued and sold to the public as of the filing date. It documents the framework for a potential future offering.

The exhibits refer to 'Depositary Shares each representing a 1/25th interest in a share of 5.000% Fixed Rate / Floating Rate Noncumulative Preferred Stock, Series U'. This means that instead of selling fractional shares of the preferred stock directly, Citigroup is likely issuing these preferred shares to a depositary institution, which in turn issues depositary shares to investors. This is a common structure that can make preferred stock more accessible and liquid for investors.