Citigroup to sell principal-protected trust certificates linked to MSCI World index

By E. Janene Geiss

Philadelphia, Oct. 7 - Citigroup Funding Inc. plans to price zero-coupon principal-protected trust certificates due 2013 linked to the MSCI World index through the Safety First Trust Series 2008-5, according to an FWP filing with the Securities and Exchange Commission.

Payout at maturity will be par of $10 plus 90% to 100% of any index gain, with the exact participation rate to be set at pricing. Investors will receive at least par.

Each certificate is exchangeable into one security and one warrant.

The equity index warrants will be automatically exercised at maturity. The warrants will pay nothing if the index is at least its initial level. Otherwise, the warrants will pay par times the absolute value of the decline.

If the index increases, the securities issued upon exchange will pay $10 plus 90% to 100% of the gain at maturity. If the index decreases, the securities will pay $10 minus the decline.

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

Citigroup Global Markets Inc. is the underwriter.

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