Today, Citigroup Inc. (NYSE:C), trading near its 52-week high at $81.48 and currently showing signs of being undervalued according to InvestingPro analysis, announced the issuance of 6.020% Fixed Rate / Floating Rate Callable Subordinated Notes due January 24, 2036. The filing with the Securities and Exchange Commission (SEC) details the terms agreement dated January 16, 2025, between Citigroup and the underwriters involved in the offer and sale of these financial instruments.
The notes are a form of debt that will pay investors a fixed interest rate initially, transitioning to a floating rate later in the term, and are set to mature on January 24, 2036. The instruments also feature a callable option, allowing Citigroup the flexibility to redeem the notes before their maturity date under specified conditions. This move comes as Citigroup maintains its 15-year streak of consistent dividend payments, currently yielding 2.73%.
Investors and market watchers have noted the move as part of Citigroup's ongoing capital management strategy, particularly important given recent cash flow challenges identified by InvestingPro analysts. The issuance aligns with the broader trends in the banking industry, where institutions continue to leverage various debt instruments to optimize their capital structures and meet regulatory requirements. With 12 additional exclusive insights and comprehensive financial analysis available on InvestingPro, investors can better understand the implications of this strategic move.
In other recent news, Citibank continues to face a lawsuit in New York, with allegations of failing to protect and reimburse customers who fell victim to fraud. The case, led by New York Attorney General Letitia James, will proceed after a judge denied Citibank's motion to dismiss. On the financial front, Citibank's recent performance has led to several analyst firms adjusting their outlook on the company. Keefe, Bruyette & Woods raised their price target for Citibank from $85.00 to $92.00, maintaining an Outperform rating due to the bank's strong financial performance.
RBC Capital Markets also lifted their stock target for Citibank to $85, maintaining an Outperform rating, following the announcement of a new $20 billion common stock repurchase program. In addition, Piper Sandler increased its price target for Citibank from $80.00 to $83.00, reaffirming an Overweight rating, after the bank's fourth-quarter earnings surpassed expectations. Lastly, despite operational challenges, Oppenheimer raised its price target for Citibank to $113, expressing confidence in the bank's ability to improve its financial metrics.
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