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The Board’s determinations in this letter are based on the
representations made in the March Request, the Notice, and related
communications. Any material change in the facts presented, including the
acquisition by GIC of any additional voting or nonvoting equity of Citigroup, could
result in a different conclusion and should be reported immediately to Board staff or
staff of the Federal Reserve Bank of New York. The Board’s decisions are
specifically conditioned on compliance with all the commitments made and
conditions imposed in connection with the proposal, including the Passivity
Commitments. These commitments and conditions are deemed to be conditions
imposed by the Board in connection with its findings and decisions and, as such,
may be enforced in proceedings under applicable law. If you have any questions
about this matter, please contact Michael Waldron, Counsel (202-452-2798), or Pat
Robinson, Assistant General Counsel (202-452-3005), of the Board’s Legal
Division.

Very truly yours,

fle Ade. Tre

Robert deV. Frierson
Deputy Secretary of the Board

cc: Ivan J. Hurwitz, Vice President
Federal Reserve Bank of New York
Office of the Comptroller of the Currency
Federal Deposit Insurance Corporation
Office of Thrift Supervision
California Division of Financial Institutions

comment on the Notice may be waived. Expeditious action on the Notice would
permit Citigroup to proceed as quickly as possible with the proposed Exchange
Offer.


BOARD oF GOVERNORS

FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551

ADDAESS OFFICIAL CORRESPONDENCE
TO THE BOARD

March 24, 2009

Daniel M. Rossner, Esq.
Sidley Austin LLP

787 7th Avenue

New York, New York 10019

Dear Mr. Rossner:

This letter replaces my letter of March 23, 2009, in response to a
request submitted on March 19 (“March Request”) by the Government of Singapore
Investment Corporation Pte. Ltd. (“GIC”). In that letter, I mischaracterized GIC as
an investment company when, in fact, it is an investment management company.

The March Request sought a determination that GIC would not be
deemed to control Citigroup Inc. (“Citigroup”), New York, New York, for purposes
of the Bank Holding Company Act of 1956, as amended (“BHC Act”), if the
transactions described below are consummated according to certain conditions
described in this letter and in related communications. In the submission, GIC also
filed a notice (“Notice”) under the Change in Bank Control Act (“CIBC Act”)! to
acquire up to 19.9 percent of the outstanding shares of Citigroup pursuant to
Citigroup’s share exchange offer.

GIC, a foreign company wholly owned by the Singapore government,
was created in 1981 under the Singapore Companies Act to invest the government’s
foreign reserves under a mandate to earn reasonable returns with acceptable risk
limits over the long term. GIC manages over $100 billion of investments in more
than 40 countries.

In order to strengthen the structure and quality of its capital, Citigroup
has initiated an exchange of up to $27.5 billion in aggregate liquidation preference
of certain series of its preferred, convertible preferred, trust preferred, and enhanced
trust preferred securities into common stock at a conversion price of $3.25 a share
(“Exchange Offer”). The U.S. government has agreed to exchange up to
$25 billion in aggregate liquidation preference of its preferred stock of Citigroup at

1 12US.C. § 1817()).


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the same conversion price. GIC currently owns (through depositary shares)
137,600 shares of Citigroup’s 7% Non-Cumulative Convertible Preferred Stock,
Series Al, and has agreed to participate in the Exchange Offer. Under the proposal,
GIC would own or control up to 19.9 percent of the voting shares of Citigroup.

GIC has requested confirmation that the Board would not deem GIC to control
Citigroup for purposes of the BHC Act as a result of the Exchange Offer.

As an investment management company incorporated under the laws
of Singapore, GIC is a company within the meaning of the BHC Act.” For purposes
of the BHC Act, a company controls a bank holding company or bank if the
company (i) directly or indirectly or acting through one or more other persons
owns, controls, or has power to vote 25 percent or more of any class of voting
securities of the bank holding company or bank; (ii) controls in any manner the
election of a majority of the directors of the bank holding company or bank; or
(iii) directly or indirectly exercises a controlling influence over the management or
policies of the bank holding company or bank.’ Section 225.31(d)(2) of the
Board’s Regulation Y also sets forth several rebuttable presumptions of control.

Under the proposal, GIC would not own, control, or hold with power
to vote 25 percent or more of a class of voting securities of, or control the election
of a majority of the directors of, a bank holding company or bank. The proposal
also does not raise any of the rebuttable presumptions of control in section
225.31(d)(2) of Regulation Y. As a result, GIC would be deemed to control a bank
holding company or bank under the BHC Act only if the Board were to find that
GIC exercises a controlling influence over the management or policies of a bank
holding company or bank.

As noted, GIC would own or control up to 19.9 percent of the voting
shares of Citigroup. GIC and certain of its subsidiaries have ordinary-course, non-
exclusive business relationships with Citigroup and certain of its subsidiaries as
depositors, customers, and counterparties. GIC has provided commitments that are
similar to those the Board previously has relied on to ensure that an investor is not
able to exercise a controlling influence over a bank or bank holding company

2 12 U.S.C. § 1841(b).
> 12 U.S.C. § 1841(a)(2); 12 CFR. 225.2(e).
“ 12 CFR 225.31(d)(2).


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(‘Passivity Commitments”). GIC has committed to limit its director representation
to one director on the board of directors of Citigroup. Under the policy statement
on equity investments in banks and bank holding companies recently issued by the
Board, a minority investor generally is permitted one director representative
without being deemed to control the target bank or bank holding company.’ GIC
has also committed that it will not exercise or attempt to exercise a controlling
influence over the management or policies of Citigroup or any of its subsidiaries
and will restrict its business relationships with Citigroup and any of its subsidiaries.

In view of the Passivity Commitments, the representations made by
GIC, and the facts described in this letter, the Board has determined that GIC would
not control Citigroup or its subsidiary banks for purposes of the BHC Act because
of its participation in the Exchange Offer.

The Board also has determined not to disapprove the Notice to acquire
up to 19.9 percent of the outstanding shares of Citigroup. In taking this action, the
Board has considered the record of the Notice in light of the relevant statutory
factors under the CIBC Act.° The proposal does not involve any change in
Citigroup’s investments or activities and would not have an adverse impact on
competition, the convenience and needs of the community, or the Federal Deposit
Insurance Fund. The proposed investment requires no additional cash from GIC.
GIC has investments exceeding $100 billion internationally in a wide range of asset
classes and has provided the information necessary to assess the Notice.’

> See “Policy statement on equity investments in banks and bank holding
companies.” 12 CFR 225.144, available at
http://www. federalreserve.gov/newsevents/press/bcreg/20080922c. htm.

® See 12 U.S.C. § 1817(j)(7).

7 In light of the continuing disruption in the capital and credit markets, the Board
has also determined that an emergency exists such that solicitation of public