USD Series 2008-07
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MLI Coupon Plus offers Investors exposure to Australia's fastest growing sector with an attractive fixed coupon paid quarterly until a Call Event occurs. Your return is linked to the performance of 3 of Australia's largest resource stocks these being: BHP Billiton Limited ("BHP"), Lihir Gold Limited ("LGL") and OZ Minerals Limited ("OZL").
The MLI is a short-term investment linked to the performance of the above three Australian resources companies ("Reference Shares"). The Coupon Amounts are paid quarterly regardless of the performance of the Reference Shares until a Call Event occurs. A Call Event is deemed to have occurred on a quarterly Call Event Observation Date if all three Reference Shares close at or above 90% (the "Call Event") of the Initial Price. If a Call Event occurs, the MLI matures and the Final Value per MLI will be 100% of the Issue Price. The investor will also receive the Coupon Amount due on that date. Should one or more Reference Shares close below 90% of the Issue Price, a Call Event will not occur but the quarterly Coupon Amount will be paid.
If on maturity a Call Event has not occurred on any Call Event Observation Date prior to maturity, whether the Final Value per MLI of 100% of the Issue Price is repaid depends on three factors:
- If all three Reference Shares close at or above 90% of the Issue Price on the scheduled Maturity Date then a Call Event will occur on the Maturity Date and the Final Value per MLI will be 100% of the Issue Price. In addition, the investor will also be entitled to the final Coupon Amount due on the Maturity Date.
- If one or more reference shares close below 90% of the issue price on the scheduled Maturity Date and no Knock-In Event has occurred (i.e. a 40% or greater drop from the Initial Price) at any time during the investment term, the Final Value per MLI will be 100% of the issue price. In addition, the Investor will also be entitled to the initial Coupon Amount due on the Maturity Date.
- If a Call Event does not occur on the Maturity Date and a Knock-In Event has occurred (i.e. a 40% or greater drop from initial share price) at any time during the investment term, the Final Value per MLI will reflect the fall in value on the Maturity Date of the Worst Performing Reference Share. The investor will also be entitled to the final Coupon Amount due on the Maturity Date.
Offer Summary
| Offer Summary as extracted from page 2 of the PDS | |
| Issuer | Citigroup Global Markets Australia Pty Limited ("Issuer") |
| Reference Shares | Each of the following Australian shares
is a “Reference Share” and together they are the
“Reference Shares”:
BHP: BHP Billiton Limited |
| Offer Closes | 23 September 2008 at 5:00pm |
| Issue Date | 30 September 2008 |
| Maturity Date | AUD Series: 30 June 2009 |
| Term of Investment | AUD Series: 9 months Early Maturity is possible, including in the case of a Call Event. |
| Denomination | AUD Series: Australian Dollars USD Series: United States Dollars |
| Investment | The MLI which is an agreement between the Investor and the Issuer governed by the Terms. |
| Issue Price | AUD Series: AUD1.00 per MLI unit USD Series: USD1.00 per MLI unit |
| Minimum Investment Amount | AUD Series: AUD10,000 and multiples of
AUD1,000 thereafter USD Series: USD10,000 and multiples of USD1,000 thereafter |
| Coupon Rate | AUD Series: A simple (non-compounding) rate of
return set by the Issuer on the Issue Date. The Coupon Rate for the AUD
Series will be greater than or equal to 20% per annum. As an
indication, if the product had been issued at the date of this PDS, the
Coupon Rate would have been 22% per annum.
USD Series: A simple (non-compounding) rate of return set by the Issuer on the Issue Date. The Coupon Rate for the USD Series will be greater than or equal to 16% per annum. As an indication, if the product had been issued at the date of this PDS, the Coupon Rate would have been 18% per annum. |
| Coupon Amount and Coupon Payment Dates | Coupon Amount will be paid on each Coupon Payment
Date as set out in the following table:
Coupon Payment Date Coupon Amount
|
| Conditional Protection | The value of each MLI unit will not be capital
guaranteed but is conditionally protected:
|
| Initial Price | In respect of each Reference Share, the Official Closing Price of the Reference Share on the Issue Date. |
| Reference Price | In respect of each Reference Share, the Official
Closing Price of such
Reference Share as at the date on which it is observed. |
| Termination upon | If a Call Event occurs on any Call Event Observation Date, the Maturity Date will be deemed to be the Call Event Observation Date on which the Call Event occurs and Final Value per MLI will be the “Final Value per MLI if Call Event occurs” as specified below. |
| Call Event | If the Reference Price of each Reference Share on a Call Event Observation Date is greater than or equal to 90% of the Initial Price for that Reference Share. |
| Call Event Observation Dates | The scheduled Call Event Observation Dates are as
set out in the table below:
Call Event Observation Dates
|
| Final Value per MLI if Call Event occurs | The Final Value per MLI if a Call Event occurs will
be the same regardless of the Call Event Observation Date on which a
Call Event occurs and even if a Knock-In Event has occurred during the
investment period prior to the Call Event. The Final Value per MLI will
be determined in the following manner:
100% x Issue Price |
| Final Value per MLI on the Maturity Date | If a Call Event does not occur on any Call Event
Observation Date (including the Call Event Observation Date that is
also the Maturity Date) then the MLI will mature on the Maturity Date.
The Final Value per MLI on the Maturity Date will be determined in the
following manner:
Knock-In Event does NOT occur 1. If: (a) the Reference Price of the Worst Performing Reference Share as at the Maturity Date is less than 90% of the Initial Price of that Reference Share; and (b) no Knock-In Event has occurred on or prior to the Maturity Date, then the Final Value per MLI will be equal to: 100% x Issue Price Knock-In Event does occur 2. If: (a) the Reference Price of the Worst Performing Reference Share as at the Maturity Date is less than 90% of the Initial Price of that Reference Share; and (b) a Knock-In Event has occurred on or prior to the Maturity Date, then the Final Value per MLI will be equal to: Issue Price x (Reference Price of the Worst Performing Reference Share on the Maturity Date ÷ Initial Price of the Worst Performing Reference Share) |
| Knock-In Event | A Knock-In Event will occur if at any time on or prior to the Maturity Date the Reference Price of the Worst Performing Reference Share is less than or equal to 60% of the Initial Price of that Reference Share. |
| Worst Performing Reference Share | The Worst Performing Reference Share means the Reference Share with the lowest Reference Price relative to the Initial Price of that Reference Share, as determined by the Issuer. |
| Delivery Asset | Shares in BHP Billiton Limited (“BHP”) (an ASX listed share, ASX code: BHP). |
| Financial Adviser Fees | Upfront fee payable by the Issuer of 3.00% (including GST) of the initial Investment Amount. This fee will be paid by Citi at no additional cost to Investors. |
Investment Profile
| Time Horizon - In Years | 1 or Less | 2 |
|
|
5 or more | Open-ended |
| Risk | Very Low |
|
Moderate | High | Very High | Speculative |
| Investment Objective |
|
Partial Protection | Conditional Protection | No Protection | Income |
|
Investment Objectives
| Investor Seeks | Investor Can Accept |
| Enhanced yield and 3 Coupon Payments only if the structure reaches the Maturity Date. | The possibility of having exposure to the Worst Performing Reference Share if a Knock-In Event (closing Reference Price falls below 60% of Initial Price) occurs and a Call Event does not occur (all Reference Shares exceeding 90% of Initial Price on a Call Event Observation Date).* |
| A short-term investment. | The risks associated with investing in equities and equity linked investments.* |
| The possibility of a Call Event occurring and receiving the Investment Amount if the Official Closing Price of each Reference Share is equal to or greater than 90% of the Issue Price on a Call Event Observation Date. | The risks associated with investing in short-term financial products.* |
| The possibility that returns could be less than the return you could earn on other investments including the actual return on the Reference Shares.* | |
| An investment structured as a deferred purchase agreement and the ability to accept delivery of shares of BHP Billiton. | |
| Currency exposure if investing in the USD denominated MLI. | |
| No dividends to be received on the Reference Shares if any are offered. | |
| No secondary market will exist for the MLI. |
Offer Summary
To view a summary of the Offer click here
Risk Factors
There are a number of risks associated with the MLI and investments in equity markets generally. Some of the key risks include:- Conditional Protection
- Market Risk & Economic Factors
- Credit worthiness of the Issuer
- Early Maturity Risk
- Event Risk
- Liquidity Risk
- Interest Rates
- Tax
- Potential conflicts of Interest
- Performance and factors affecting the Reference Shares
- Potential Conflicts of interest
- Currency Risk
- Investment Decisions
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More Information
For further information on structured financial products contact the Citigroup Structured Products Service Centre.| Phone | : | 1300 30 70 70. | |
| : | citifirst.au@citi.com | ||
| : | GPO Box 40, Sydney NSW 1027 | ||