Moody's downgrades Travelers

Moody's Investors Service said it downgraded the insurance financial strength ratings of Travelers Insurance Co. and Travelers Life and Annuity Co., its wholly owned subsidiary, to Aa2 from Aa1. Other ratings downgraded with a negative outlook are Travelers Insurance Co. Institutional Funding Ltd.'s senior debt to Aa2 from Aa1 and Travelers Life & Annuity Global Funding I's secured debt to Aa2 from Aa1.

Travelers Insurance Co.'s short-term insurance financial strength rating was affirmed at Prime-1.

The rating action follows the announcement by Citigroup Inc. and MetLife Inc. that they have signed a definitive agreement under which Citigroup will sell Travelers Insurance and Travelers Life and Annuity, among other entities not rated by Moody's, to MetLife for $11.5 billion in cash and stock.

According to the rating agency, the downgrade reflects the anticipated change in ownership of Travelers Insurance and Travelers Life and Annuity from Citigroup (Aa1 senior unsecured debt) to MetLife (A2 senior unsecured debt, negative outlook) and its primary operating company, Metropolitan Life Insurance Co.

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