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$31 Billion of Citicorp’s Debt Downgraded: Moody’s...

From Times Staff and Wire Reports

$31 Billion of Citicorp’s Debt Downgraded: Moody’s Investors Service Inc. slashed the rating of the nation’s biggest bank group, which suffering from growing loan problems. Moody’s said some securities, including Citicorp’s preferred stock, were no longer investment grade, a key distinction because it means many pension funds will not be allowed to buy it. The ratings cut also makes it likely that Citicorp will have to pay a higher interest rate if it wants to issue new debt. The agency downgraded Citicorp’s senior debt to Baa2 from A3. At the same time, its subordinated debt was lowered to Baa3 from Baa1. Its preferred stock was lowered to A3. Its short-term commercial paper, a prime source of funding needs for a bank, was lowered to Prime-3 from Prime-2.


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