S&P cuts Citigroup

Standard & Poor's said it lowered the long-term counterparty credit ratings on Citigroup Inc. to AA- from AA and on Citibank NA New York to AA from AA+, reflecting the group's severe losses - outside the rating tolerance - stemming from a single business line.

The outlook is negative.

The agency said that the ratings were removed from CreditWatch, where they were placed with negative implications on Nov. 5.

At the same time, S&P said that the short-term counterparty credit ratings on the two entities were affirmed at A-1+, noting that the downgrade also takes into consideration that Citigroup's performance could be rocky in 2008 amid prospects for a continued difficult operating environment for U.S. banks.

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