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CITICORP CREDIT RATINGS LOWERED BY DUFF & PHELPS

 CITICORP CREDIT RATINGS LOWERED BY DUFF & PHELPS
 CHICAGO, Dec. 23 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has


lowered the long-term ratings for Citicorp as follows: senior debt from 'A-' (single A minus) to 'BBB+'(triple B plus); subordinated debt from 'BBB+' to 'BBB' (triple B); and preferred stock from 'BBB' to 'BBB-' (triple B minus). Approximately $25 billion of securities are affected by the rating changes. The commercial paper rating has been lowered to Duff 1- (one minus) from Duff 1. The short-term deposit rating of Citibank, N.A., has been lowered from Duff 1+ to Duff 1 and the long- term deposit rating has been lowered from 'A' (single A) to 'A-'.
 The rating reduction is mainly due to slower than expected improvement in capitalization measures and the expectation of some further moderate deterioration in asset quality which will negatively affect earnings retention over the near-term. Further, the weak economy and the expectation of some diminution in the long-term profitability of Citicorp's credit card business due to certain structural and competitive factors, will adversely affect earnings capability.
 Management has taken aggressive steps in recent months to rebuild capital and restructure the expense configuration of the corporation.
 While this has very positive implications for Citicorp longer term, the workout of problem real estate loans, and the associated credit- related expenses including cost of carry, write-downs and other expenses, combined with Duff & Phelps expectations of a weak business environment in 1992 will negatively affect profitability and internal generation of capital. As a result, material improvements in both profitability and earnings retention are not expected until sometime in 1993.
 While fundamentals have weakened somewhat during this period of economic weakness and real estate market instability, Citicorp and its principal subsidiary bank, Citibank, have made substantial improvements in funding structure and liquidity. Commercial paper usage has declined to approximately $1 billion with proceeds invested in short-term, marketable securities, while the level of more stable, core deposits has grown dramatically at the bank level.
 Citicorp is the largest bank holding company in the United States with $224 billion of assets. Citicorp operates over 3,000 offices in 92 countries; domestic offices are located throughout 40 states.
 The company's expansion efforts are directed particularly at growing the Global Consumer business.
 -0- 12/23/91
 /CONTACT: Charles J. Orabutt of Duff & Phelps, 312-368-3153/
 (CCI) CO: Citicorp ST: New York IN: FIN SU: RTG


KD -- NY084 -- 4975 12/23/91 16:53 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Dec 23, 1991
Words:406
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