S&P puts St. Paul on positive watch

Standard & Poor's said it placed its BBB+ senior debt, counterparty credit and other debt ratings on the St. Paul Cos. Inc. and its A+ counterparty credit and financial strength ratings on the insurance company subsidiaries on CreditWatch with positive implications.

This action follows the company's announcement that its board of directors has approved a plan to merge with Travelers Property Casualty Corp. (A; A-/negative/--) in the first half of 2004.

S&P said the decision to place these ratings on CreditWatch reflects the possibility that, following completion of the merger, S&P will affirm the existing ratings or raise them one notch to the current ratings on Travelers.

The financial strength rating on Travelers's insurance operating subsidiaries is AA-, and both companies are among the top-10 writers in the commercial lines sector of the U.S. property/casualty market.

On a pro forma basis the combined entity would be the second-largest U.S. commercial lines insurer.

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