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Rating Action:

Moody's Reviews Citigroup Pty Limited's Ratings For Possible Upgrade

Global Credit Research - 26 Aug 2013

Sydney, August 26, 2013 -- Moody's Investors Service has placed Citigroup Pty Limited's ("Citigroup P/L") senior unsecured rating of Baa1 on review for possible upgrade. Its short-term deposit rating of Prime-2 is not affected by this review

Today's announcement follows the placement on review for possible upgrade of the ratings of Citibank N.A., which is the parent of Citigroup P/L. The rating action on Citibank N.A. reflects the parent's declining exposure to legacy assets, strengthened profitability and improved capital.

RATINGS RATIONALE

The review of Citigroup P/L's rating is a direct result of the rating action on its parent, Citibank N.A. It reflects the interconnectedness between the two entities, given the high level of related party funding Citigroup P/L sources from Citibank N.A., in addition to the benefits Citigroup P/L derives from access to other group resources and shared branding with its parent. Consequently, we view the ratings of parent and subsidiary to be closely linked.

The review will focus on (i) the evolution of the linkages between Citigroup P/L and its parent and (ii) how Citigroup P/L's financial flexibility and business operations will benefit from the improvement in Citibank N.A.'s financial profile.

At the same time, the review will also consider the implications of Australia's slowing economy and the potential for greater pressure to arise on Citigroup P/L's asset quality, in light of its concentration in credit cards.

WHAT COULD DRIVE THE RATINGS DOWN/UP

An upgrade of Citigroup P/L's rating will be dependent on (i) an upgrade of Citibank N.A.'s rating and (ii) Citigroup P/L maintaining strong capital and provision coverage of potential credit losses in case of a deteriorating operating environment.

The principal methodology used in this rating was Global Banks published in May 2013. Please see the Credit Policy page on www.moodys.com for a copy of the methodology.

Citigroup Pty Limited, headquartered in Sydney Australia had assets of AUD17.9billion (approximately USD18.6billion) at end-2012

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Daniel Yu
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service Pty. Ltd.
Level 10
1 O'Connell Street
Sydney NSW 2000
Australia
JOURNALISTS: (612) 9270-8102
SUBSCRIBERS: (612) 9270-8100

Stephen Long
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077

Releasing Office:
Moody's Investors Service Pty. Ltd.
Level 10
1 O'Connell Street
Sydney NSW 2000
Australia
JOURNALISTS: (612) 9270-8102
SUBSCRIBERS: (612) 9270-8100

Moody's Reviews Citigroup Pty Limited's Ratings For Possible Upgrade
No Related Data.

 

© 2014 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

 


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