Fitch upgrades Citigroup preferreds, reviews other ratings

Fitch Ratings said it upgraded Citigroup Inc.'s preferred stock to BBB- from C and the trust preferreds issued by various capital trust subsidiaries to BBB- from BB-. The company's AAA long-term FDIC-guaranteed debt and F1+ short-term FDIC-guaranteed debt were affirmed.

Concurrently, the agency placed the remaining ratings of the company and its subsidiaries on Rating Watch negative, including their A+ long-term issuer default ratings, A+ senior debt ratings, A subordinated debt ratings, F1+ short-term issuer default and debt ratings, 1 support ratings and A+ support floors.

The Rating Watch negative follows the agency's initial interpretation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implications for systemically important financial institutions. Citigroup's A+ issuer default rating incorporates a three-notch uplift. Fitch said that if it determines on a go forward basis that support from the sovereign state can no longer be relied upon, the ratings might be lowered.

The agency said the upgrade of the preferreds reflects improved financial performance in 2010, including the emergence of sustainable operating profits and favorable asset quality trends. Citi's improved financial profile has further bolstered its capacity to pay coupons on trust preferreds, and it will begin paying dividends on series AA, E, F, and T preferreds, which had been suspended.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.