Effective 11:58 p.m. EST on December 31, 2012 ("Merger Effective Time"), Citigroup Funding Inc. ("CFI"), a wholly-owned direct subsidiary of Citigroup Inc. ("Citigroup"), will be merged with and into Citigroup. As a result of this merger, as of the Merger Effective Time, (i) CFI will cease to exist, and (ii) Citigroup, which previously guaranteed all of the payment obligations of CFI, will assume all existing outstanding indebtedness of CFI, including commercial paper and medium-term notes. There will be no change to the terms of such CFI indebtedness, including the interest rate, payment and/or delivery dates (if any) or maturity date, as a result of the merger. This merger is part of Citi's ongoing corporate simplification process to centralize the capital markets activities of Citigroup and its subsidiaries.
Citigroup accesses capital markets funding through its primary issuing entity, Citigroup Inc. Citigroup Inc. (Baa2/A-/A) is the parent entity and typically borrows for general corporate purposes. Citigroup Inc. issues senior and subordinated debt (generally in the format of underwritten, term offerings); capital securities; medium-term and structured notes; commercial paper; and preferred stock. Proceeds of term borrowings are typically used for the benefit of Citigroup's broker/dealer subsidiaries; CP proceeds are used for Citigroup's general corporate purposes.