Citigroup Inc. has announced the full redemption of its $2.5 billion outstanding 1.122% Fixed Rate/Floating Rate Notes due February 14, 2027 (ISIN US17327CAM55), effective January 28, 2026. The redemption price will be equal to par value plus accrued and unpaid interest through the redemption date. This action follows the company’s previous repurchase of $1.8 billion in senior debt during the third quarter of 2025 and is part of Citigroup’s broader liability management program aimed at optimizing its funding costs and maturity profile.

By retiring these low-coupon notes more than a year before maturity, Citigroup expects to reduce its interest expense and free up capacity under its debt issuance programs. The redeemed notes were trading near par, indicating limited market premium, and their early removal from the balance sheet will lower the bank’s expected weighted average cost of debt by an estimated 5 basis points. Investors will be watching whether Citigroup replaces this issuance with new debt at current market spreads, which have widened modestly compared to levels seen at the time of the 2027 notes’ original sale in late 2020.

Although these notes qualified as senior unsecured debt rather than Tier 1 or Tier 2 capital, their redemption modestly improves Citigroup’s leverage ratio by reducing total liabilities. With the bank reporting a Common Equity Tier 1 ratio of 12.4% and a supplementary leverage ratio of 7.5% at year-end 2025, management has signaled continued surplus capital above regulatory minimums. Analysts expect Citigroup to maintain its dividend and share repurchase targets, funded in part by future liability management transactions similar to this redemption.