Skip to main content

Citi Not Afraid Of A Little Disclosure Risk

While UBS is busy trying to minimize the damage from its principal protected note lawsuits, Citigroup is forging ahead with its PPN offerings. Citi has sold $211 million of the notes so far in 2009 and is not worried about investors mistaking the words 'principal protection' for safe.

Notes tied to the performance of the Russell 2000 index, which pay a coupon of 3 percent, are "subject to the credit risk of Citigroup Inc.," the prospectus says in five places. It says the notes are not insured by the FDIC but are "fully and unconditionally guaranteed by Citigroup Inc." It does not provide Citigroup's credit rating.

Citigroup Sells 'Principal-Protected' Notes That Burned UBS [Bloomberg]