Citi China Launches Structured Notes Product Under QDII Scheme

Shanghai – Citibank (China) Co., Ltd. (“Citibank”) today announced the launch of a new structured notes investment product. The offering is Citi’s first to be launched under the Qualified Domestic Institutional Investor (“QDII”) scheme. The QDII scheme allows domestic institutions and residents to invest money in overseas financial products via mainland qualified commercial banks.

The structured note offering allows customers the opportunity to participate in the performance of the overseas property market while offering principle protection at maturity. The structured notes are linked to two equity indices, namely the Tokyo Stock Exchange REIT Index (“TSEREIT”) and the Philadelphia Stock Exchange Housing Sector Index (“HGX”), which track the property market development in Japan and the U.S. respectively. Employing a simple daily accrual strategy, this five year USD note will accrue an attractive coupon of 12% p.a. on a daily basis if the Japanese property market “outperforms” the U.S. property market not lower than –5%. This relative “outperformance” also means that this note can accrue coupons regardless of whether property prices in both Japan and the U.S. are rising or falling. The note also offers the potential of an early call-back from the issuer.

"This offering is an innovative one that reflects our commitment to launching new products and services in China that provide our customers with investment options that generate genuine value. The structured notes product allows exposure to the international property market, while offering principal protection, and is the first of many new products we will launch under the QDII scheme,” Mr. Anand Selvakesari, Executive Vice President of Citibank (China) Co., Ltd. said.

This new offering is now available for subscription in Shanghai, Beijing, Guangzhou, Shenzhen, Tianjin and Chengdu until June 19, 2007. The minimum investment required for the product is USD 10,000.