Moody's cuts Citigroup

Moody's Investors Service said it downgraded the long term ratings of Citigroup Inc. (senior to Aa2 from Aa1) and lowered the bank financial strength rating of Citibank, NA to A- from A.

In addition, Moody's said it placed the BFSR under review for possible further downgrade.

Moody's said it affirmed the Aaa deposit and debt ratings on Citibank and changed the outlook to negative from stable while the outlook on the long-term debt ratings of Citigroup was also changed to negative from stable.

All short term ratings (Prime-1 at Citigroup and Citibank) were affirmed with a stable outlook, the agency noted.

Moody's said its actions follow the disclosure by Citigroup that it has a direct sub-prime mortgage exposure of $55 billion in its investment banking operations, including a $43 billion exposure to senior tranches of collateralized debt obligations.

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