Moody's may downgrade Prudential

Moody's Investors Service said it placed the ratings of Prudential Financial, Inc. and its subsidiaries on review for possible downgrade, 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 senior secured debt rating and Prudential Funding, LLC's A1 senior unsecured debt rating.

The outlook on Prudential's Prime-2 short-term issuer and debt ratings and Prudential Funding's Prime-1 short-term debt rating remains stable.

The review follows the company's announcement of its fourth-quarter results, which included a net loss of $1.6 billion and $511 million of net realized investment losses on a pre-tax basis.

Moody's said its review will focus on (a) the extent to which Prudential's profitability and capital generation will be affected over the medium-term due to investment losses and the impact of depressed equity markets on its variable annuity and asset management businesses and (b) diminished financial flexibility and liquidity at its holding company in light of the large debt maturities in 2009.

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