Citigroup Global Markets Inc (CGMI) has released an intricate pricing supplement detailing a specific securities offering. On the day of the supplement, each security’s estimated value stands at $966.90, a figure that falls below the issue price. The estimated value is derived from CGMI’s complex proprietary pricing models and internal funding rate, yet it does not guarantee future purchase prices by CGMI or other entities. For each security sold, CGMI is set to receive an underwriting fee of a maximum of $23.75. It’s crucial to note that these securities lack insurance by the FDIC or any other governmental agency, and no bank guarantees them. They are susceptible to risks absent in conventional debt securities.
Risk Factors and Performance Variables
Investors considering these securities must be aware of inherent risk factors such as the performance of the S&P 500 Index – the underlying index, and CGMI’s creditworthiness. Payments upon maturity for these securities will fluctuate based on the final underlying value. The supplement includes scenarios that illustrate potential outcomes ranging from possible appreciation (upside scenarios) to depreciation beyond a buffer percentage (downside scenario), producing a negative return. Investors must bear in mind that they will not receive dividends or possess rights concerning the underlying index.
Terms, Disclosures, and Considerations
The terms of the securities are meticulously detailed in several documents, including the product supplement, prospectus supplement, and the prospectus. Investors are urged to peruse these documents attentively. Important disclosures and adjustments, though not reiterated in the pricing supplement, are vital for comprehending the investment. The calculation of the securities’ value at maturity involves various inputs and models that might deviate from investor perspectives and could potentially be erroneous. The secondary market rate for the securities is determined by CGMI, mirroring the market’s perception of Citigroup Inc.’s creditworthiness. As the calculation agent, CGMI might make determinations that could negatively affect the securities’ value.
Advisory for Non-U.S. Investors and Tax Implications
Non-U.S. investors are advised to consider the implications of withholding tax issues. All investors, regardless of their nationality, are strongly advised to consult a tax advisor regarding the potential tax consequences of the investment.