Moody's: Prudential outlook negative

Moody's Investors Service said it changed the outlook for Prudential Financial, Inc. and its affiliates to negative from stable and affirmed the ratings, including Prudential's A3 long-term issuer and senior unsecured debt ratings, Pricoa Global Funding I's Aa3 senior secured debt rating, Prudential Holdings LLC's A2 "unwrapped" senior secured debt rating and Prudential Funding, LLC's A1 senior unsecured debt rating.

Prudential's Prime-2 short-term issuer and debt ratings, Prudential Funding's Prime-1 short-term debt rating and Prudential Bank & Trust's A1 long-term issuer rating were affirmed with a stable outlook.

The agency said the outlook change reflects the pressures on Prudential's profitability and capital adequacy from depressed equity markets as well as diminished financial flexibility and liquidity at its holding company given market conditions that may make it difficult for the company to refinance large debt maturities in 2009.

In affirming the ratings, however, Moody's said they reflect its expectations that Prudential will successfully undertake various initiatives to stabilize the operating companies' capitalization at levels consistent with Aa-rated insurers and to address the liquidity needs of the holding company.

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