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Rating Action:

Moody's changes Citigroup's hybrid securities ratings

24 Feb 2010

Junior-subordinated and cumulative-preferred ratings are downgraded; non-cumulative preferred ratings are upgraded. All other ratings (senior at A3) are unchanged.

New York, February 24, 2010 -- Moody's Investors Service lowered its ratings on Citigroup's junior-subordinated TRUPS and Enhanced TruPS securities to Ba1 from Baa3. It also lowered to Ba2 from Ba1 the rating on the cumulative preferred securities issued by Egg Banking plc that are guaranteed by Citigroup Inc. These actions are in line with Moody's revised Guidelines for Rating Bank Hybrids and Subordinated Debt published in November 2009 and conclude the reviews for possible downgrade initiated on November 18th, 2009. The list of Citigroup's rating changes can be found below.

Moody's also raised the ratings on the non-cumulative preferred stock issued by Citigroup Inc., which were positioned based on an expected loss analysis, to Caa1 from Ca. The upgrades reflect Moody's greater confidence that the coupons suspended beginning in September 2009 will eventually be resumed.

All other ratings on Citigroup and its subsidiaries were unchanged. These include Moody's unsupported Bank Financial Strength Rating (BFSR) of C-, which translates to a Baseline Credit Assessment (BCA) of Baa2 for Citibank N.A. The A1 rating on the bank for deposits incorporates four notches of lift because of Moody's assumption that Citibank N.A. benefits from very high systemic support. The A3 rating on the senior unsecured notes issued by the holding company also remains unchanged and incorporates three notches of lift given Moody's systemic support assumptions. The short-term ratings for Citibank N.A. and Citigroup Inc. are Prime -1. The rating outlooks on Citibank N.A. and Citigroup for short-term obligations, long-term deposits, senior debt and senior- subordinated debt are stable. The rating outlook on its BFSR of C- and Citigroup's hybrid ratings remains negative.

REVISED HYBRID GUIDELINES MOTIVATED DOWNGRADES ON JUNIOR- SUBORDIATED AND CUMULATIVE PREFERRED SECURITIES.

Moody's said that, under the revised methodology, hybrid securities with coupon skip mechanisms will be anchored from the bank's Adjusted Baseline Credit Assessment (Adjusted BCA) as opposed to Citibank N.A.'s supported deposit and senior debt ratings. The Adjusted BCA is determined by adding parental and/or cooperative support to the bank's BCA, if applicable. In Citibank N.A.'s case, since neither parental nor cooperative support applies, the Adjusted BCA is Baa2, the same as the bank's BCA. For hybrids issued by the holding company, an additional one notch adjustment is made to capture the risk of structural subordination. All of Citigroup's hybrids are either issued by the holding company -- Citigroup Inc. -- or guaranteed by Citigroup Inc.

In summary, Moody's rated Citigroup's junior-subordinated debt securities with deferral features Ba1, which is two notches below the bank's Adjusted BCA of Baa2 and also includes an adjustment for structural subordination of the holding company. Meanwhile, Egg Banking plc's cumulative preferred securities guaranteed by Citigroup Inc. were rated Ba2, which is three notches below the Adjusted BCA after taking structural subordination of the holding company into account.

NON-CUMULATIVE PREFERRED RATINGS ARE UPGRADED

Moody's raised the ratings on non-cumulative preferred securities issued by Citigroup to Caa1 from Ca. The ratings were downgraded to Ca in late February 2009 after Citigroup announced plans to suspended dividends on these securities to provide an incentive for investors to accept Citigroup's offer to exchange the securities for its common stock. We viewed the offer as a distressed exchange, which was an important factor in the previous Ca rating. As a result of Citigroup's exchange offer, the company increased its tangible common equity by approximately $62 billion, and it raised an incremental $19 billion of common equity in December 2009. Moody's said that the ratings upgrade to Caa1 from Ca reflects Citigroup's enlarged capital base, which increases the possibility of eventual restoration of the preferred dividends within three years of their initial suspension.

LATEST RATING ACTIONS AND RATING METHODOLOGIES

Moody's last rating action on Citigroup was on November 18th, 2009, when its hybrid securities were placed on review for possible downgrade.

The principal methodologies used in rating this issuer were "Bank Financial Strength Ratings: Global Methodology" published in February 2007, "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology" published in March 2007, and "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt" published in November 2009. These are available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.

Citigroup Inc. is headquartered in New York, New York. Its reported assets were $1.9 trillion as of December 31st,2009.

Issuer: Citigroup Capital III

..Downgrades:

....US$200M Preferred Stock Due 2036, CUSIP 17305HAA6, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital VII

..Downgrades:

....US$925M Preferred Stock Due 2031, CUSIP 17306N203, Downgraded to Ba1 from Baa3

....US$1000M Preferred Stock Shelf, SEC Registration 333-27155, Downgraded to (P)Ba1 from (P)Baa3

....US$1000M Preferred Stock Shelf, SEC Registration 333-42575, Downgraded to (P)Ba1 from (P)Baa3

....US$6000M Preferred Stock Shelf, SEC Registration 333-68949, Downgraded to (P)Ba1 from (P)Baa3

....US$25000M Preferred Stock Shelf, SEC Registration 333-68949, Downgraded to (P)Ba1 from (P)Baa3

Issuer: Citigroup Capital VIII

..Downgrades:

....US$1125M Preferred Stock Due 2031, CUSIP 17306R204, Downgraded to Ba1 from Baa3

....US$6000M Preferred Stock Shelf, SEC Registration 333-68949, Downgraded to (P)Ba1 from (P)Baa3

....US$25000M Preferred Stock Shelf, SEC Registration 333-49442, Downgraded to (P)Ba1 from (P)Baa3

Issuer: Citigroup Capital IX

..Downgrades:

....US$873M Preferred Stock Due 2033, CUSIP 173066200, Downgraded to Ba1 from Baa3

....US$6000M Preferred Stock Shelf, SEC Registration 333-68949, Downgraded to (P)Ba1 from (P)Baa3

....US$25000M Preferred Stock Shelf, SEC Registration 333-49442, Downgraded to (P)Ba1 from (P)Baa3

Issuer: Citigroup Capital X

..Downgrades:

....US$380M Preferred Stock Due 2033, CUSIP 173064205, Downgraded to Ba1 from Baa3

....US$6000M Preferred Stock Shelf, SEC Registration 333-68949, Downgraded to (P)Ba1 from (P)Baa3

....US$25000M Preferred Stock Shelf, SEC Registration 333-49442, Downgraded to (P)Ba1 from (P)Baa3

....US$15000M Preferred Stock Shelf, SEC Registration 333-102206, Downgraded to (P)Ba1 from (P)Baa3

....US$15000M Preferred Stock Shelf, SEC Registration 333-102206, Downgraded to (P)Ba1 from (P)Baa3

Issuer: Citigroup Capital XI

..Downgrades:

....US$474M Preferred Stock Due 2034, CUSIP 17307Q205, Downgraded to Ba1 from Baa3

....US$6000M Preferred Stock Shelf, SEC Registration 333-68949, Downgraded to (P)Ba1 from (P)Baa3

....US$25000M Preferred Stock Shelf, SEC Registration 333-49442, Downgraded to (P)Ba1 from (P)Baa3

....US$15000M Preferred Stock Shelf, SEC Registration 333-102206, Downgraded to (P)Ba1 from (P)Baa3

....US$15000M Preferred Stock Shelf, SEC Registration 333-102206, Downgraded to (P)Ba1 from (P)Baa3

....US$30000M Preferred Stock Shelf, SEC Registration 333-117615, Downgraded to (P)Ba1 from (P)Baa3

Issuer: Citigroup Capital XIV

..Downgrades:

....US$307M Preferred Stock Due 2066, CUSIP 17309E208, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XV

..Downgrades:

....US$631M Preferred Stock Due 2066, CUSIP 17310G202, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XVI

..Downgrades:

....US$954M Preferred Stock Due 2066, CUSIP 17310L201, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XVII

..Downgrades:

....US$702M Preferred Stock Due 2067, CUSIP 17311H209, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XVIII

..Downgrades:

....US$160M Preferred Stock Due 2067, CUSIP 030671147, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XIX

..Downgrades:

....US$570M Preferred Stock Due 2067, CUSIP 17311U200, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XX

..Downgrades:

....US$443M Preferred Stock Due 2067, CUSIP 173085200, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XXI

..Downgrades:

....US$2346M Preferred Stock Due 2077, CUSIP 173094AA1, Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XXX

..Downgrades:

....US$1875M Preferred Stock Due 2041, CUSIP n.a., Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XXXI

..Downgrades:

....US$1875M Preferred Stock Due 2042, CUSIP n.a., Downgraded to Ba1 from Baa3

Issuer: Citigroup Capital XXXII

..Downgrades:

....US$1875M Preferred Stock Due 2042, CUSIP n.a., Downgraded to Ba1 from Baa3

Issuer: Citigroup Inc.

..Downgrades:

.... Junior Subordinate Shelf, SEC Registration 333-157459, Downgraded to (P)Ba1 from (P)Baa3

..Upgrades:

.... Cumulative Preferred Shelf, SEC Registration 333-157459, Upgraded to (P)Ba2 from (P)Ca

.... Non-cumulative Preferred Shelf, SEC Registration 333-157459, Upgraded to (P)Caa1 from (P)Ca

....US$97M Preferred Stock, CUSIP 172967572, Upgraded to Caa1 from Ca

....US$23M Preferred Stock, CUSIP 172967598, Upgraded to Caa1 from Ca

....US$121M Preferred Stock, CUSIP 172967ER8, Upgraded to Caa1 from Ca

....US$71M Preferred Stock, CUSIP 172967556, Upgraded to Caa1 from Ca

Issuer: Egg Banking Plc

..Downgrades:

....GBP250M 7.5% Junior Subordinated Regular Bond/Debenture, ISIN XS0167817898, Downgraded to Ba2 from Ba1

New York
Sean Jones
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
David Fanger
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's changes Citigroup's hybrid securities ratings
No Related Data.
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