01—Abstract
Summary
Summary of the 8-K filed December 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Citigroup Inc. (NYSE: C) filed this Form 8-K on December 3, 2024 to document the creation and issuance of a new series of preferred stock, the 6.750%a Fixed Rate Reset Noncumulative Preferred Stock, Series EE.
On December 2, 2024, the company filed a Certificate of Designations with the Delaware Secretary of State, amending its Restated Certificate of Incorporation. The change took effect immediately upon filing. This is a capital-structure action rather than an earnings or operational event, so the filing contains no financial results, guidance, or changes to fiscal year or bylaws.
The new preferred shares are offered as Depositary Shares, with each Depositary Share representing a 1/25th interest in one share of Series EE preferred stock. The offering was governed by an underwriting agreement dated November 25, 2024. The deposit agreement, dated December 3, 2024, names Computershare as depositary, registrar, and transfer agent.
The filing also includes a legal opinion from Skadden, Arps, Slate, Meagher & Flom LLP and a list of Citigroup securities registered on the NYSE, including common stock and various trust preferred and medium-term note series. For investors, the key takeaway is that Citigroup has added a noncumulative, fixed-rate-reset preferred security to its capital base, which typically supports regulatory capital ratios such as Tier 1 capital. Noncumulative preferreds do not accrue unpaid dividends, so holders bear more risk than with cumulative preferreds.
The 6.750%b initial coupon is a fixed rate through the first reset period, after which the rate resets. Investors should review the Certificate of Designations and the prospectus for the exact reset terms, redemption features, and dividend conditions.
02—Key points
Key Highlights
- Citigroup filed a Certificate of Designations on December 2, 2024, creating a new series of preferred stock: 6.750% Fixed Rate Reset Noncumulative Preferred Stock, Series EE.
- The Series EE preferred is issued as Depositary Shares, with each share representing a 1/25th interest in one share of preferred stock.
- The offering was made under an underwriting agreement dated November 25, 2024, and the deposit agreement is dated December 3, 2024.
- Computershare serves as depositary, registrar, and transfer agent for the Series EE Depositary Shares.
- The filing is a capital-structure event with no reported earnings, financial results, or guidance.
- The Certificate of Designations took effect immediately upon filing with Delaware.
- The filing lists Citigroup's NYSE-registered securities, including common stock (C), trust preferred securities, and multiple series of CGMHI medium-term notes with Citigroup guarantees.
03—Questions
Frequently Asked Questions
What new security did Citigroup issue?
Citigroup created a new series of preferred stock called 6.750% Fixed Rate Reset Noncumulative Preferred Stock, Series EE. Investors hold it through Depositary Shares, with each Depositary Share representing a 1/25th interest in one preferred share.
What does 'noncumulative' mean for investors?
If Citigroup skips a dividend on noncumulative preferred stock, the unpaid amount does not accumulate and is generally lost to holders. This is a greater risk than with cumulative preferred stock, where missed dividends must be paid later before common dividends resume.
What does 'fixed rate reset' mean?
The stock pays a fixed 6.750% dividend for an initial period. After that, the dividend rate resets periodically based on a benchmark plus a spread, as set out in the Certificate of Designations. The exact reset mechanics are not stated in this filing.
Does this filing change Citigroup's financial results or outlook?
No. The filing reports only the creation of the new preferred series and related exhibits. It contains no earnings data, guidance, or operating results.
Why might Citigroup issue preferred stock like this?
Preferred stock generally counts toward bank regulatory capital, such as Tier 1 capital, and gives the bank a source of funding that does not dilute common shareholders. The filing itself does not state the company's specific purpose for this issuance.
04—Continue