S&P may lower Travelers

Standard & Poor's said it placed its ratings on Travelers Insurance Co. and its wholly owned subsidiary, Travelers Life & Annuity Co., on CreditWatch with negative implications.

This divestiture will not have any implications for the ratings of Citigroup Inc. or any of Citigroup's remaining units.

S&P said the ratings actions follow the announcement that Citigroup has reached an agreement with MetLife Inc. to sell the Travelers Life & Annuity Co. and certain other related businesses for about $11.5 billion. Primerica Life Insurance Co. and Primerica Financial Services Inc. will not be involved in this transaction. The transaction is expected to close by the third quarter of 2005.

Although Travelers maintains an excellent record of revenue and earnings performance, the uncertainty surrounding MetLife's cash coverage levels and Travelers' prospective stand-alone financial strength characteristics necessitates the CreditWatch action at this time, S&P said. Any changes to the ratings on Travelers will not exceed one notch based on its underlying financial strengths.

S&P rates Travelers Insurance Co.'s counterparty credit rating at AA and financial strength rating at AA, Travelers Life & Annuity Co.'s counterparty credit rating AA and financial strength rating at AA, and Travelers Insurance Co. Institutional Funding Ltd.'s senior unsecured debt at AA and senior secured debt rating AA.

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