UPDATE 2-Citigroup sells A$1.25 bln bond to 30 investors

(Adds terms and distribution details)

SYDNEY, Aug 13 (Reuters) - Citigroup's (C.N) Australian
unit has priced A$1.25 billion ($1 billion) in a new three-year
bond issue guaranteed by the Australian government, priced at
43 basis points over swap and BBSW, it said on Thursday.

The issue consisted of A$450 million in fixed rate notes
and A$800 million in floating rate notes.

More than 30 investors participated in the offer, pushing
the final book size to A$1.5 billion though it was later scaled
back.

The strong demand allowed the bank to set the margin at 43
basis points (bps), at the bottom of an initial range of 43-47
bps.

Around 85 percent of the notes were placed in Australian
hands while the remainder found a home in Europe.

The fixed rate tranche attracted a high ratio of asset
managers, while the floating rate notes drew a higher portion
of banks. Overall, just over half of the issue was sold to
banks.

Citi said it opted to open a new three-year line rather
than reopening a June 2012 issue after consulting investors. In
June, the bank sold A$1.3 billion of three-year notes backed by
the government.

The new issue found new investors to Citigroup both in
Europe and Australia and the bank plans to sell more bonds in
Australia.

"We continue to monitor every market in Australia to see if
there is an opportunity whether it would be with the government
guarantee in three to five years, or in the securitised
market," said Charles Finkelstein, Citigroup's country
treasurer.

"We are certainly not expecting to do anything to year-end
or, if we do, it would be a smaller size to what we have
already done," Finkelstein added.

Citi was sole bookrunner of the offer and had appointed a
group of banks to help the sale.

ANZ was appointed senior co-manager, while Commonwealth
Bank of Australia, Macquarie Bank and National Australia Bank
acted as co-managers and Westpac Institutional Bank as junior
co-manager.

Banks have been keen users of the triple A rated Australian
government guarantee put in place late last year to help them
weather the global financial crisis.

Australian banks have sold over A$112 billion of government
guaranteed bonds in Australia and offshore, representing 73
percent of total issuance by banks since it was introduced,
Deutsche Bank data shows.

Deal details are as follows:

Issuer: Citigroup Ptd Ltd

Facility: Fixed and floating rate guaranteed notes

Guarantor: Australia

Law: Australia

Amount issued: A$1.25 billion

Maturity: Aug. 20, 2012

Set date: Aug. 20

Lead(s): Citigroup

Issuer ratings: A+ (S&P), A2 (Moody's)

Issue ratings: AAA, Aaa

Tranche: fixed FRN

Amount: A$450 mln A$800 mln

Coupon: 5.500% +43 bps/3 month-BBSW

Yield: 5.700% +43 bps/3 month-BBSW

Spread: +43 bps/swap +43 bps/3 month-BBSW

+78 bps/ACGB 2012

Issue price 99.456 100
($1=1.199 Australian Dollar)
(Reporting by Cecile Lefort)