A.M. Best Affirms Associates First Capital Corporation.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 8, 2000

A.M. Best Co. has affirmed the financial strength ratings of the property/casualty and life/health subsidiaries of Associates First Capital Corporation.

The affirmations follow the announcement by Citigroup on September 6 that it will acquire Associates First Capital Corporation in a stock-for-stock transaction valued at approximately $31.1 billion.

Under terms of the merger agreement, Associates shareholders will receive .7334 common shares of Citigroup for each share of Associates common stock, equivalent to approximately 10% ownership interest in Citigroup. At a per share stock swap ratio of approximately .73:1, Citigroup anticipates earnings/share accretion of at least $.10 in the first year of its combined operations. The acquisition will be accounted for on a pooling of interests basis and will require no additional financing. The transaction is subject to customary banking and insurance regulatory approvals.

The acquisition of the largest publicly traded finance company in the U.S. provides Citigroup with a significant opportunity to leverage its broad array of financial services products to the customer base of Associates, while also providing potentially large retail outlet for its products and services. The acquisition also provides additional scale in Citigroup's expanding international consumer finance operations, as Associates is the fifth largest consumer finance company in Japan and has a client base of approximately 700,000 in Europe. Best also notes the relatively consistent revenue and earnings streams of the finance unit, which should provide additional stability to Citigroup's overall earnings performance.

Through its subsidiaries, Associates First Capital provides various insurance products, including credit accident and health, credit life, accidental death and dismemberment, involuntary unemployment and personal property insurance. A.M. Best believes that in addition to expanding Citigroup's reach in the consumer finance arena, the acquisition may provide additional diversification benefits and cross-marketing opportunities to both the Travelers and Associates insurance operating units.

The A+ (Superior) ratings of the Travelers principal property/casualty and life/health subsidiaries are unaffected by this announcement.

The A+ (Superior) financial strength ratings of the following property/casualty and life/health subsidiaries of Associates First Capital Corporation were affirmed:

-- Associates Insurance Group;

-- Associates Insurance Co.;

-- Associates Lloyds Insurance Co.;

-- Commercial Guaranty Insurance Co.;

-- TNC Insurance Group;

-- American Equity Insurance Co.;

-- American Equity Specialty Insurance Co.;

-- Mendakota Insurance Co.;

-- Mendota Insurance Co.;

-- Northfield Insurance Co.;

-- Northland Casualty Co.;

-- Northland Insurance Co.;

-- Associates Financial Life Insurance Co.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.