Moody's lowers Citigroup to Prime-2

Moody's Investors Service said it confirmed the A3 long-term rating of Citigroup and the A1 long-term and Prime-1 short-term ratings of Citibank NA. At the same time, Moody's downgraded the short-term rating of Citigroup to Prime-2 from Prime-1. The actions conclude a review for possible downgrade announced on June 2.

The outlook on the long-term senior ratings remains negative.

Moody's said the confirmations reflect two offsetting factors: a decrease in the probability that the U.S. government would support the bank, if needed, and an improvement in the bank's stand-alone credit profile reflected in an increase in Citibank NA's unsupported baseline credit assessment to Baa1 from Baa2.

The downgrade of the short-term rating of Citigroup results from the reduced assumption of systemic support, according to the news release.

The downgrade to Prime-2 is not a reflection of Citigroup's liquidity profile, which strengthened significantly in the past two years and is robust, the agency said.

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