Citigroup plans strategic market access notes linked to MLP basket

By Toni Weeks

San Diego, Sept. 20 - Citigroup Funding Inc. plans to price strategic market access notes due in December 2012 or January 2013 linked to a basket of energy-related master limited partnerships, according to a 424B2 filing with the Securities and Exchange Commission. The exact maturity date will be set at pricing.

The equally weighted basket includes the common units of Atlas Pipeline Partners, LP, El Paso Pipeline Partners, LP, Enbridge Energy Partners, LP, Enterprise Products Partners, LP, EV Energy Partners, LP, Linn Energy, LLC, Magellan Midstream Partners, LP, ONEOK Partners, LP, Plains All American Pipeline, LP, Spectra Energy Partners, LP, Targa Resources Partners, LP, Teekay LNG Partners LP and Western Gas Partners, LP. The basket components will be rebalanced to equal weighting about eight months after pricing.

Interest will be payable quarterly. The interest rate will be 0.1% per year plus the total amount of ordinary cash dividends with respect to the basket components for which an ex-date has occurred during each quarterly interest period, if any, for each $1,000 note.

The payout at maturity will be the net investment value of the note on the third trading day prior to the maturity date.

On the pricing date, the net investment value will be $990 per note. On each subsequent trading date, the net investment value will be (A) (i) $990 times (ii) the basket return percentage of the energy MLP basket, which compares the value of the basket on that trading day to its value on the pricing date plus (B) any accrued dividends up to and including that trading day minus (C) the 1% per year basket adjustment factor calculated up to and including that trading day.

The Cusip number for the notes is 1730T0PB9.

Citigroup Global Markets Inc. is the underwriter.

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