Citigroup to sell 18-month Pacers linked to eBay stock

By Laura Lutz

Des Moines, Oct. 25 - Citigroup Funding Inc. plans to price 18-month Premium Mandatory Callable Equity-linked Securities (Pacers) linked to the common stock of eBay Inc., according to an FWP filing with the Securities and Exchange Commission.

The securities will be priced at par of $10.

The securities will be subject to mandatory calls at increasing premiums if the stock closes at or above its initial level at any time during three-day call periods in each of May 2008, November 2008 and May 2009. The specific call dates will be determined on the pricing date.

The call premiums are expected to be between 8.25% and 9.25% in May 2008, between 16.5% and 18.5% in November 2008 and between 24.75% and 27.75% in May 2009.

The payout at maturity will be par in cash unless, at any time during the life of the securities, eBay stock closes below 27.5% of its initial level. In that case, the payout will be a number of eBay shares equal to par divided by the initial price.

Citigroup said it will apply to list the Pacers on the American Stock Exchange under the symbol "PPK."

The notes are expected to price in November and settle three days later.

Citigroup Global Markets is the agent.

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