About Citi Regular & High Yield Instalments

Warrants Tour Why Invest in Warrants? About Citi Regular & High Yield Instalments Citi Instalments over iShares About Reset Instalments About Trading Warrants About Turbo Warrants Glossary FAQ Risks

Product Offering and Investor Tools

Click here to view current Citi Instalment Warrants.

What is an Instalment Warrant?

Citi Instalments are an increasingly popular and flexible investment product for those seeking leveraged exposure to the performance of shares in Australia's leading companies. For a fraction of the up-front price of the underlying shares, investors retain all due capital gains, dividends and franking credits as if they owned the shares outright.

What are Citi Instalments?
A Citi Instalment is like a share 'lay by'. It is based on two separate 'instalment' payments. The first payment entitles you to receive all the dividends, distributions and franking credits paid in relation to the underlying share. Additionally, because the amount you pay up-front is small, you receive an enhanced dividend yield and enjoy greater benefit from share price movements. The second and final payment is an agreed and fixed amount that will complete the purchase of the share. This payment of the second instalment is at your discretion.

There are two forms of Citi Instalments Warrants available:

1. Regular Citi Instalments

2. Citi High Yield Instalments

Citi High Yield Instalments offer a much higher level of gearing.

How do Citi Instalments work?
Investors purchase Citi Instalments by making two separate payments:

1. The First Instalment The First Instalment is the purchase price of the Citi Instalment and is usually between 30%-60% of the underlying share price for the Regular version and around 10%-20% for Citi High Yield Instalments. The first Instalment is paid upfront and is composed of a capital component, prepaid interest and a borrowing fee. The First Payment is dependent on the underlying share price, volatility of the market, time to maturity and prevailing interest rates. The following table illustrates the effect of those factors on the price of an Instalment.

Pricing Factor	Change in Pricing Factor	Change in Instalment Price
Underlying Parcel Price
Time to Maturity
Interest Rate
Volatility of Share

2. The Final Instalment
This amount is fixed. You have the right but not the obligation to pay the Final Instalment and take delivery of the underlying shares at any time before maturity. The Final Instalment is structured as a loan and the interest and fees relating to the loan may create taxation benefits depending on your individual circumstances.
The degree of leverage determines the relationship between the First Instalment and the Final Instalment. For example, a gearing level of 50% means that the capital component of the First Instalment and the Final Instalment (i.e. Loan Amount) will be approximately the same equalling, 50% of the underlying share price.

What happens at maturity?
You will receive a reminder notice before the Citi Instalment expiry date. At that time you have a number of options. These include:

· Pay the Final Instalment and costs to receive the Underlying Shares

· Defer the Final Instalment by rolling into the next series of Citi Instalments

· Sell the Underlying Parcel to CitiFirst Warrants

·          Do nothing. If the Underlying Share is trading above the Final Instalment at closing time on the
           maturity date CitiFirst Warrants will pay you the difference between the Market Value of the Underlying
           Shares and the Final Instalment less costs.

Buying Citi Instalment Warrants

You can purchase Citi Instalments in different ways depending whether you are a:

Investor with funds in cash
Direct Purchase on the ASX
This is the easiest and quickest way to purchase Citi Instalments. Citigroup makes a market in all Citi Instalments by providing buy and sell quotations. In order to trade Instalments you need to complete a Warrant Client Agreement Form obtainable from any stockbroker.
Primary Market: Cash Application
You can apply for Citi Instalments in the primary market by completing the Application form in the Offering Circular and submitting it with payment to your financial planner, broker or directly to Citigroup. You can fix the First Instalment via your stockbroker otherwise the First Instalment will be fixed at the current amount upon receipt of payment.

Shareholder
Shareholder Application
You can convert your current share holdings into Citi Instalments by completing the Application form in the Offering Circular and submitting it to your financial planner, broker or directly to Citigroup. You can fix the Cashback amount via your stockbroker otherwise the Cashback amount will be fixed at the current amount upon receipt of the shares.

Existing Instalment Holder
Rollover Application
At maturity you can rollover your current Instalment holdings into new Citi Instalments by completing the Application form in the Offering Circular and submitting it to your financial planner, broker or directly to Citigroup.

Steps for Citi Instalment Application

Primary Market Application
In order to purchase instalments over the primary market, investors do not need to have a brokerage account. There are different types of application forms depending on your situation.

You can submit your application with payment to your stockbroker, approved financial adviser or directly to CitiFirst Warrants. You can obtain the First Instalment Amount or cash back amount for shareholder applications, through your stockbroker. Alternatively CitiFirst Warrants will fix the First Instalment or cash back amount at the current amount upon receipt of payment.

Where to get an application form?
The application forms can be found in the offering circular of each series of Citi Instalment Warrants. You can download the Offering Circular or contact CitiFirst Warrants.

Simply complete the application form and send it to CitiFirst Warrants

You should read the offering circular in full prior to making an application. The offering circular is located at www.citiwarrants.com or through CitiFirst Warrants on 1300 30 70 70

Risks
For more information about risks involved with investing in warrants and structured products please click here Application Checklist

Application type	Checklist	Documents required	Process time
Cash application	Complete & sign Cash Application Form	Application Form	You will receive your holding statement from the registrar, Computershare. Upon receipt of the application and cleared funds you will receive notice within approximately 10 business days.
	Choose your method of payment	Cheque (if this is the method of payment)
	Customer reference number - call CitiFirst Warrants on 1300 307 070 (if BPay is the method of payment)
Shareholder application	Complete & sign Shareholder Application Form	Shareholder Application Form	You will receive your holding statement from the registrar, Computershare. Upon receipt of the application and cleared funds you will receive notice within approximately 10 business days.
	Cash Application Form if electing to reinvest your Cashback amount	Copy of Holding Statement
	Mail Application form & copy of Holding Statement to CitiFirst Warrants	Cash Application form if reinvesting Cashback amount
Rollover Application	Complete & sign Rollover Application form	Rollover Application form	Approximately one month before expiry of your warrant, CitiFirst Warrants will make an offer to rollover into a new instalment over the same underlying asset.
Rollover Application	Mail Application form & copy of Holding Statement to CitiFirst Warrants	Cheque (if additional payment has to be made)

Disclaimer

This material is made available by Citigroup Global Markets Australia Pty Limited ("Citigroup Global Markets") ABN 64 003 114 832 and AFSL 240992, Participant of the ASX Group. The Financial Products referred to in this document are issued by Citigroup Global Markets. This information does not take into account the investment objectives or financial situation of any particular person. Investors should be aware that there are risks of investing and that prices both rise and fall. Investors should seek their own independent financial advice based on their own circumstances before making a decision.
The terms set forth herein are intended for discussion purposes only and subject to the final expression of the terms of a transaction as set forth in a definitive agreement and/or confirmation. Although the information contained herein is based upon generally available information and has been obtained from sources believed to be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed. Any prices used herein are historic and may not be available when any order is entered. All opinions and estimates included in this document constitute our judgment as of this date and are subject to change without notice.

This material does not purport to identify the nature of the specific market or other risks associated with a particular transaction. Before entering into a derivative transaction, you should ensure that you fully understand the terms of the transaction, relevant risk factors, the nature and extent of your risk of loss and the nature of the contractual relationship into which you are entering. You should also carefully evaluate whether the transaction is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances and whether you have the operational resources in place to monitor the associated risks and contractual obligations over the term of the transaction.

The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor or agent. Therefore prior to entering into the proposed transaction you should determine, without reliance upon us or our affiliates, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences of the transaction, and independently determine that you are able to assume these risks. In this regard, by acceptance of these materials, you acknowledge that you have been advised that (a) we are not in the business of providing legal, tax or accounting advice, (b) you understand that there may be legal, tax or accounting risks associated with the transaction, (c) you should receive legal tax and accounting advice from advisors with appropriate expertise to assess relevant risks, and (d) you should apprise senior management in your organization as to the legal, tax and accounting advice (and, if acceptable, risks) associated with this transaction and our disclaimers as to these maters. If you are acting as a financial adviser or agent, you should evaluate these considerations in light of the circumstances applicable to your principal and the scope of your authority. If you believe you need assistance in evaluating and understanding the terms or risks of a particular derivative transaction, you should consult appropriate advisers before entering into the transaction.

We and/or our affiliates (together, the "Firm") may from time to time take proprietary positions and/or make a market in instruments identical or economically related to derivative transactions entered into with you, or may have an investment banking or other commercial relationship with and access to information from the issuer(s) of financial products underlying derivative transactions entered into with you. We may also undertake proprietary activities, including hedging transactions related to the initiation or termination of a derivative transaction with you, that may adversely affect the market price, rate, index or other market factors(s) underlying a derivative transaction entered into with you and consequently the value of the transaction. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding.

© Citigroup 2012. All Rights Reserved. Citi and the Red Arc Device are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. Any unauthorized use, duplication, redistribution or disclosure is prohibited by law and will result in prosecution.