Citigroup Misstated Maturity Date on $1 Billion Bond by 18 Years


Investors in a $1 billion subordinated bond issued by Citigroup Inc. seven years ago received an unusual notice on Thursday: their bond won’t mature in five years’ time but in 2043 instead.

The New York-based bank made a mistake when drawing up the bond’s prospectus back in 2013. While the document was headed “6.675% Subordinated Notes due 2043,” its maturity was given as September 13, 2025 no fewer than three times in the text. The bank was also selling a separate $1.42 billion tranche of subordinated bonds maturing in 2025 at that time.

Prospectuses are legal documents setting out the terms of bond offering, with vague clauses that can lead lead to squabbles between borrowers and investors. Spain’s Banco Santander SA irritated some bondholders last year with its interpretation of the call announcement deadline for a contingent convertible bond.

Citigroup’s acknowledgment of this blunder comes a month after it emerged that loan operation staff at the bank wired $900 million to lenders of troubled cosmetics giant Revlon Inc. by mistake.

The note’s price in the secondary market was 154.58 on Tuesday, the latest day for which figures were available, implying a yield of 3.28%.

A representative at Citigroup did not immediately respond to a request for comment.

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