2. THE ISSUER

Citigroup is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate clients. was incorporated in Delaware in 1988 pursuant to the Delaware General Corporation Law.

The Company is a holding company within the meaning of the U.S. Bank Holding Company Act of 1956 registered with, and subject to examination by, the Board of Governors of the Federal Reserve System (FRB). Some of the Company’s subsidiaries are subject to supervision and examination by their respective federal and state authorities. At December 31, 2008, the Company had approximately 134,400 full-time and 4,100 part-time employees in the and approximately 188,400 full-time employees outside the United States.

During 2008, the Company benefited from substantial U.S. government financial involvement, including (i) raising an aggregate of $45 billion through the sale of Citigroup non-voting perpetual, cumulative preferred stock and warrants to purchase common stock to the U.S. Department of the Treasury, (ii) entering into a loss-sharing agreement with various U.S. government entities covering $301 billion of Company assets, and (iii) issuing $5.75 billion of senior unsecured debt guaranteed by the Federal Deposit Insurance Corporation (FDIC) (in addition to $26.0 billion of commercial paper and interbank deposits of Citigroup’s subsidiaries guaranteed by the FDIC outstanding at the end of 2008). In connection with these programs and agreements, Citigroup is required to pay consideration to the U.S. government, including in the form of dividends on the preferred stock and other fees. In addition, Citigroup has agreed not to pay common stock dividends in excess of $0.01 per share per quarter for three years (beginning in 2009) or to repurchase its common stock without the consent of U.S. government entities. For additional information on the above, see “TARP and Other Regulatory Programs” on page 44 of Schedule 1 attached hereto.

On January 16, 2009, the Company announced a realignment, for management and reporting purposes, into two businesses: Citicorp, primarily comprised of the Company’s Global Institutional Bank and the Company’s international regional consumer ; and Citi Holdings, primarily comprised of the Company’s brokerage and asset management business, local consumer finance business, and a special asset pool. Citigroup believes that the realignment will optimize the Company’s global businesses for future profitable growth and opportunities and will assist in the Company’s ongoing efforts to reduce its balance sheet and simplify its organization. Please see more detail on page 7 of Schedule 1 attached hereto.

On February 27, 2009, the Company announced an exchange offer of its common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 per share. The U.S. government will match this exchange up to a maximum of $25 billion of its preferred stock at the same conversion price. These transactions are intended to increase the Company’s tangible common equity (TCE) and will require no additional U.S. government investment in Citigroup. Please see more detail on page 7 of Schedule 1 attached hereto.

The principal executive offices of the Company are located at 399 Park Avenue, New York, New York 10043, telephone number 001-1-212-559-1000. Additional information about Citigroup is available on the Company’s Web site at www.citigroup.com. Citigroup’s annual report on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K, as well as the Company's other filings with the U.S. Securities and Exchange Commission are available free of charge through the Company’s Web site by clicking on the “Investors” page and selecting “All SEC Filings.” The U.S. Securities and Exchange

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Commission Web site contains reports, proxy and information statements, and other information regarding the Company at www.sec.gov.

2.1 Risk Factors

You should carefully consider the following risk factors, as well as other information set out in this Annual Registration Statement, prior to making an investment in the Bonds. The risks described below are not the only ones that may affect the Bonds. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations.

Relating to Citigroup

The ability of Citigroup to fulfill its obligations under the Bonds is dependent on the earnings of its subsidiaries.

Citigroup is a holding company that does not engage in any material amount of business activities that generate revenues. Citigroup services its obligations primarily with dividends and advances from its subsidiaries. Its subsidiaries that operate in the banking and securities businesses can only pay dividends if they are in compliance with applicable regulatory requirements imposed on them by federal and state regulatory authorities. Its subsidiaries may be subject to credit agreements that also may restrict their ability to pay dividends. If such subsidiaries did not realize sufficient earnings to satisfy applicable regulatory requirements, or if such requirements were changed to further restrict the ability of such subsidiaries to pay dividends to Citigroup, Citigroup’s ability to fulfill its obligations under the Bonds may be adversely affected.

Under U.S. banking law, Citigroup may be required to apply its available funds to support the financial position of its banking subsidiaries, rather than to fulfill its obligations under the Bonds.

Under longstanding policy of The Board of Governors of the U.S. Federal Reserve System, a bank holding company (such as Citigroup) is expected to act as a source of financial strength for its subsidiary banks and to commit resources to support such banks. As a result of that policy, Citigroup may be required to commit resources (in the form of investments or loans) to its subsidiary banks in amounts or at times that could adversely affect its ability to also fulfill its obligations under the Bonds.

Reduction of Citigroup’s ratings may reduce the market value and liquidity of the Bonds.

Each rating agency rating may reduce or withdraw its ratings of Citigroup at any time in the future if, in its judgment, circumstances warrant a change. No rating agency is obligated to maintain its ratings at their current levels. If a rating agency reduces or withdraws its rating of Citigroup, the liquidity and market value of the Bonds are likely to be adversely affected. As of 26 March 2009, Citigroup has been assigned long-term unsecured senior debt ratings of ‘‘A (Negative)’’ by Standard & Poor's ‘‘A3 (Stable)’’ by Moody’s Investors Service and “A+ (Stable) by Fitch Ratings.

Relating to the Bonds

Changes in exchange rates could reduce the market value of the Bonds and the value of payments on the Bonds to an investor.

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An investment in Bonds denominated in a currency (the “specified currency”) that is not the currency of the investor’s jurisdiction (the “investor’s currency”) entails risks that are not present in a similar investment in a debt security denominated in the investor’s currency. These risks include:

• The possibility of significant market changes in rates of exchange between the investor’s currency and the specified currency and

• The possibility of significant changes in rates of exchange between the investor’s currency and the specified currency resulting from official redenomination or revaluation of the specified currency or the investor’s currency.

These risks depend on factors over which Citigroup has no control and which may not be readily foreseeable, such as economic events (both national and global), political events and the supply of, and demand for, the relevant currencies.

The rates of exchange between currencies in which Bonds may be denominated have historically been volatile, and this volatility may be expected in the future. Past fluctuations in particular rates of exchange are not necessarily indicative of future fluctuations that may occur during the term of any Bond. Depreciation of the specified currency for a particular Bond against the investor’s currency would result in a reduction of the effective yield of such Bond below its coupon rate and could result in a substantial loss to the investor at maturity in terms of the investor’s currency.

Changes in market interest rates may result in reduced market value of an investment in fixed rate Bonds.

If market interest rates increase after an investor has invested in Bonds bearing interest at a fixed rate, the market value of those Bonds may be adversely affected.

Early repayment of Bonds may expose an investor to reinvestment risk.

As described under “Description of Bonds—Redemption for Tax Purposes”, Citigroup has the right to redeem the Bonds prior to their maturity date in the event of certain changes in U.S. tax laws. Upon an investor’s receipt of the redemption proceeds for his Bonds, the investor may not be able to reinvest those proceeds in an investment with a comparable yield to the Bonds or in an investment of similar or better credit quality.

Legal investment considerations may restrict investments by some investors.

The investment activities of certain investors are subject to legal investment laws and regulations, or to review or approval by governmental authorities. Each potential investor should consult its advisors to determine whether and to what extent (a) the Bonds are a legal investment for it, (b) the Bonds can be used as collateral for borrowings, pledges or repurchase transactions and (c) any other consequences of a proposed investment in Bonds. Institutions that are subject to risk-based capital or similar rules should consult their advisors or regulators to determine the treatment of the Bonds under such rules.

Implementation of the EU Savings Directive may affect withholding of tax on Bonds.

Under the European Council Directive 2003/48/EC on the taxation of savings income, Member States of the European Union are required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident

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in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-EU countries and territories have agreed to adopt similar measures (some of which involve a withholding system).

If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of or in respect of tax were to be withheld from that payment, none of Citigroup, any paying agent or any other person would be obliged to pay additional amounts with respect to any Bond as a result of the imposition of such withholding tax.

A secondary market for the Bonds may not develop or may not exist throughout their term.

The Bonds will have no established trading market when issued and one may never develop. If a market does develop, it may be of limited duration or it may not provide sufficient liquidity for investors to be able to sell their Bonds easily or at prices that will provide them with a yield comparable to similar investments that have a developed trading market.

Please see more risk factors beginning on page 47 of Schedule 1 attached herewith.

2.2 Nature of Business

Citigroup Inc. is a diversified global financial services holding company whose businesses provide a broad range of financial services to consumer and corporate clients. Citigroup has more than 200 million customer accounts and does business in more than 100 countries.

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At December 31, 2008, Citigroup was managed along the following segment and product lines (as noted on page 2 of this Annual Registration Statement, on January 16, 2009, Citigroup announced a realignment of its businesses to be effective, for reporting purposes, in the second quarter of 2009):

CITIGROUP SEGMENTS

Institutional Global Wealth Global Consumer Corporate/ Clients Group Management Cards Banking Other (ICG) (GWM)

− Master Card, VISA, − Retail banking • Securities and • Smith Barney − Treasury Diners Club, retail − Consumer finance Banking (S&B) − Advisory − Operations and partners and − Investment banking technology American Express − Real estate lending − Financial planning − Personal loans − Debt and equity − Brokerage − Corporate expenses − Sales finance markets − Investment services • Private Bank − Discontinued − Lending operations − Auto loans − Wealth management − Private equity − Small and middle services market commercial − Hedge funds banking − Real estate − Primerica financial − Structured products Services − Managed futures − Student lending • Transaction Services − Cash management − Trade services − Custody and fund services − Clearing services − Agency trust services • Citigroup Investment Research − Equity and fixed income research

The following are the four regions in which Citigroup operates. The regional results are fully reflected in the segment results.

CITIGROUP REGIONS (1)

Europe, North Latin Middle East Asia America America & Africa

(1) Asia includes Japan, Latin America includes Mexico, and North American includes U.S., and Puerto

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2.3 Rating

As of 26 March 2009, Citigroup has been assigned long-term unsecured senior debt ratings of ‘‘A (Negative)’’ by Standard & Poor's ‘‘A3 (Stable)’’ by Moody’s Investors Service and “A+ (Stable) by Fitch Ratings.

2.4 Share Capital

Citigroup’s authorized capital stock consists of 15 billion shares of common stock, par value $.01 per share, and 30 million shares of preferred stock, par value $1.00 per share. As at 31 December 2008, there were 5,450,068,088 and 828,573 shares of common stock and preferred stock outstanding, respectively. A common stock share carries one vote, and no pre-emptive or other subscription rights, or conversion rights.

2.5 Major Shareholders

All of the Issuer’s common stock and preferred stock are held in book entry form. Under U.S. law, no shareholder has to declare its holdings of voting equity in an issuer unless it owns 5 per cent. or more of the outstanding shares. According to a filing made with the U.S. Securities and Exchange Commission on 17 February 2009 by State Street Bank and Trust Company (State Street), State Street may be deemed to beneficially own 6.2% of Citigroup's common stock. In addition, as described in more detail on page 44 of Schedule 1 attached hereto, in 2008 and 2009, Citigroup issued to the U.S. Treasury warrants to purchase Citigroup common stock. Certain of these warrants are exercisable within 60 days and the common stock underlying such warrants represents approximately 6.2% of Citigroup's common stock.

2.6 Management

As of 19 March 2009, the members of the of Citigroup are (i) C. Michael Armstrong, (ii) Alain J.P. Belda, (iii) Sir Winfried F.W. Bischoff, (iv) Kenneth T. Derr, (v) John M. Deutch, (vi) Roberto Hernández Ramírez, (vii) Andrew N. Liveris, (viii) Anne Mulcahy, (ix) , (x) Richard D. Parsons, (xi) Lawrence R. Ricciardi (xii) Judith Rodin, (xiii) Robert E. Rubin, (xiv) Robert L. Ryan and (xv) Franklin A. Thomas.

As at 27 February 2009, Citigroup’s Executive Officers are: (i) Shirish Apte, (ii) Ajay Banga, (iii) Sir Winfried F.W. Bischoff, (iv) Don Callahan, (v) Gary Crittenden, (vi) Terri Dial, (vii) James A. Forese, (viii) Steven J. Freiberg, (ix) John C. Gerspach, (x) John Havens, (xi) Michael S. Helfer, (xii) Lewis B. Kaden, (xiii) Edward J. Kelly, III, (xiv) Brian Leach, (xv) Manuel Medina-Mora, (xvi) William J. Mills, (xvii) Vikram S. Pandit, (xviii) William R. Rhodes and (xix) Stephen R. Volk.

2.7 Financial Condition and Performance

Set forth below is selected historical financial information of Citigroup. This information was derived from the consolidated financial statements of Citigroup for each of the periods presented. The information is only a summary and should be read together with the consolidated audited annual financial statements of Citigroup for the fiscal years ended 31 December 2008, 2007 and 2006, set out in Schedule 1 attached hereto.

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At or for the Year Ended 31 December 2008 2007 2006 (millions of U.S. dollars, except per share amounts) Income Statement Data: Total revenues, net of interest expense 52,793 78,495 86,327 Income (loss) from continuing operations before taxes, (53,055) 776 28,489 minority interest, and cumulative effect of accounting change Income (loss) from continuing operations before (32,094) 2,989 20,451 cumulative effect of accounting change Net income (loss) (27,684) 3,617 21,538 Dividends declared per common share 1.12 2.16 1.96

Balance Sheet Data: Total assets 1,938,470 2,187,480 1,884,167 Total deposits 774,185 826,230 712,041 Long-term debt 359,593 427,112 288,494 Total stockholders' equity 141,630 113,447 119,632

2.8 Business Operation

2008 in Summary

Citigroup reported a $32.1 billion loss from continuing operations ($6.42 per share) for 2008. The results were impacted by continued losses related to the disruption in the fixed income markets, higher consumer credit costs, and a deepening of the global economic slowdown.

The net loss of $27.7 billion ($5.59 per share) in 2008 includes the results and sales of the Company’s German retail banking operations and CitiCapital (which were reflected as discontinued operations), as well as a $9.568 billion Goodwill impairment charge based on the results of its fourth quarter of 2008 goodwill impairment testing. The goodwill impairment charge was recorded in Consumer Banking, Latin America Consumer Banking and EMEA Consumer Banking.

During 2008, the Company benefited from substantial U.S. government financial involvement, including (i) raising an aggregate $45 billion in capital through the sale of Citigroup non-voting perpetual, cumulative preferred stock and warrants to purchase common stock to the U.S. Department of the Treasury (UST), (ii) entering into a loss-sharing agreement with various U.S. government entities covering $301 billion of Company assets, and (iii) issuing $5.75 billion of senior unsecured debt guaranteed by the Federal Deposit Insurance Corporation (FDIC) (in addition to $26.0 billion of commercial paper and interbank deposits of Citigroup’s subsidiaries guaranteed by the FDIC outstanding as of December 31, 2008). In connection with these programs and agreements, Citigroup is required to pay consideration to the U.S. government, including in the form of dividends on the preferred stock and other fees. In addition, Citigroup has agreed not to pay common stock dividends in excess of $0.01 per share per quarter for three years (beginning in 2009) or to repurchase its common stock without the consent of U.S. government entities. For additional information on the above, see “TARP and Other Regulatory Programs” on page 44 of Schedule 1.

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In addition to the equity issuances to the UST under TARP, Citigroup raised $32 billion of capital in private and public offerings during 2008.

In addition, on January 16, 2009, the Company announced a realignment, for management and reporting purposes, into two businesses: Citicorp, primarily comprised of the Company’s Global Institutional Bank and the Company’s regional consumer banks; and Citi Holdings, primarily comprised of the Company’s brokerage and asset management business, local consumer finance business, and a special asset pool. Citigroup believes that the realignment will optimize the Company’s global businesses for future profitable growth and opportunities and will assist in the Company’s ongoing efforts to reduce its balance sheet and simplify its organization. For additional information, see “Outlook for 2009” on page 7 of Schedule 1.

On February 27, 2009, the Company announced an exchange offer of its common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 per share. The U.S. government will match this exchange up to a maximum of $25 billion of its preferred stock at the same conversion price. These transactions are intended to increase the Company’s tangible common equity (TCE) and will require no additional U.S. government investment in Citigroup. For additional information, see “Outlook for 2009” on page 7 of Schedule 1.

During 2008, the Company also completed 19 strategic divestitures which were designed to strengthen our franchises.

Revenues of $52.8 billion decreased 33% from 2007, primarily driven by significantly lower revenues in Institute Clients Group (ICG) due to write-downs related to subprime Collateralized Debt Obligations (CDOs) and leveraged lending and other fixed income exposures. Revenues outside of ICG declined 6%. The Company’s revenues outside North America declined 4% from 2007.

Net interest revenue grew 18% from 2007, reflecting the lower cost of funds, as well as lower rates outside the U.S. The lower cost of funds more than offset the decrease in the asset yields during the year. Net interest margin in 2008 was 3.06%, up 65 basis points from 2007 (see the discussion of net interest margin on page 82 of Schedule 1 attached hereto). Non-interest revenue decreased $34 billion from 2007, primarily reflecting subprime and fixed income write-downs.

Although the Company made significant progress in reducing its expense base during the year, operating expenses increased 19% from the previous year with lower operating expenses being offset by a $9.568 billion goodwill impairment charge, higher restructuring/ repositioning charges and the impact of acquisitions. Excluding the goodwill impairment charge, expenses have declined for four consecutive quarters, due to lower incentive compensation accruals and continued benefits from re-engineering efforts. Headcount was down 52,000 from December 31, 2007.

The Company’s equity capital base and trust preferred securities were $165.5 billion at December 31, 2008. Stockholders’ equity increased by $28.2 billion during 2008 to $141.6 billion, which was affected by capital issuances discussed above, and the distribution of $7.6 billion in dividends to common and preferred shareholders. Citigroup maintained its “well-capitalized” position with a Tier 1 Capital Ratio of 11.92% at December 31, 2008.

Total credit costs of $33.3 billion included Net Credit Losses (NCLs) of $19.0 billion, up from $9.9 billion in 2007, and a net build of $14.3 billion to credit reserves. The build consisted of $10.8 billion in Consumer ($8.2 billion in North America and $2.6 billion in regions outside North America), $3.3 billion in ICG and $249 million in Global Wealth Management (GWM) (see “Credit Reserves” on page 11 of

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Schedule 1 for further discussion). The Consumer loan loss rate was 3.75%, a 149 basis-point increase from the fourth quarter of 2007. Corporate cash-basis loans were $9.6 billion at December 31, 2008, an increase of $7.8 billion from year-ago levels. This increase is primarily attributable to the transfer of non- accrual loans from the held-for-sale portfolio to the held-for-investment portfolio during the fourth quarter of 2008. The allowance for loan losses totaled $29.6 billion at December 31, 2008, a coverage ratio of 4.27% of total loans.

The effective tax rate (benefit) of (39)% in 2008 primarily resulted from the pretax losses in the Company’s Securities and Banking business taxed in the U.S. (the U.S. is a higher tax-rate jurisdiction). In addition, the tax benefits of permanent differences, including the tax benefit for not providing U.S. income taxes on the earnings of certain foreign subsidiaries that are indefinitely invested, favorably affected the Company’s effective tax rate.

At December 31, 2008, the Company had increased its structural liquidity (equity, long-term debt and deposits) as a percentage of assets from 62% at December 31, 2007 to approximately 66% at December 31, 2008. Citigroup has continued its deleveraging, reducing total assets from $2,187 billion at December 31, 2007 to $1,938 billion at December 31, 2008.

At December 31, 2008, the maturity profile of Citigroup’s senior long-term unsecured borrowings had a weighted average maturity of seven years. Citigroup also reduced its commercial paper program from $35 billion at December 31, 2007 to $29 billion at December 31, 2008.

Recently, Robert Rubin, Sir Win Bischoff and Roberto Hernández Ramirez announced they would not stand for re-election at Citigroup’s 2009 Annual Meeting of Stockholders. On February 23, 2009, Richard Parsons became the Chairman of the Company.

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