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S&P cuts Citi outlook to negative
Standard & Poor's said it revised its outlook on Citigroup Inc. to negative from stable.
At the same time, the agency said it affirmed its counterparty credit and debt ratings on Citi (A/A-1; holding company).
In light of what S&P views as improved stand-alone characteristics, it raised the ratings on its hybrid capital issues to BB- from B+, excluding its preferred stock, which the agency affirmed at C.
"The outlook revision reflects its increased uncertainty about the U.S. government's willingness to provide additional extraordinary support to highly systemically important financial institutions in a way that will benefit debt holders," said credit analyst Scott Sprinzen.
"We previously stated its belief that the extraordinary support was temporary. We believe markets are beginning to stabilize and the U.S. government is seeking ways to reduce the potential for moral hazard and systemic risk associated with large financial institutions."
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