Travelers Property & Casualty and Citigroup Inc. recently announced that they would suffer only modest exposures from telecommunications company WorldCom’s accounting scandal.
According to a press release from Travelers, CFO Jay S. Benet said “the company has determined that this event is not expected to have a material impact on Travelers operating income, which excludes realized investment gains and losses, for the quarter and year.” The company currently holds $83.4 million in WorldCom debt.
Citigroup said “the value of its exposure to various WorldCom bonds at its life and annuity companies was $250 million, while its WorldCom exposure at its Travelers Property Casualty arm was $85 million,” according to a press release. “This is out of a $70 billion bond portfolio at its insurance units.”
The company estimates it has another possible $40 million of exposure to WorldCom in other areas of the company.
Citigroup CFO Todd Thomson said in the press release, “While we are currently assessing the level of impairment on these securities, we expect that the financial impact to Citigroup should be relatively modest.”
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