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Moody's affirms Citigroup
Moody's Investors Service said it affirmed Citigroup Inc.'s ratings after the company reported a second-quarter 2008 net loss of $2.5 billion. Citigroup is rated Aa3 for senior debt.
The outlook is negative.
Citigroup's second-quarter loss stemmed from increases in loan-loss provisions and further marks, including an additional $5.9 billion aggregate pre-tax charge against its exposure to subprime CDOs and financial guarantors. Much of Citigroup's second-quarter credit costs were within Moody's aggregate loss estimates - although the $3.4 billion pre-tax CDO charge was not.
The agency said the affirmation was based on the expectation that Citigroup can absorb Moody's future estimated stress losses due to the higher regulatory capital - including Tier 1 of 8.7% - that Citigroup has accumulated. Moody's further expects that marks will decrease in future periods.
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