S&P Announces: St. Paul Cos. Inc. Ratings Placed on CreditWatch Positive Pending Merger With Travelers

November 17, 2003

On Nov. 17, 2003, Standard & Poor’s Ratings Services placed its ‘BBB+’ counterparty credit and debt ratings on the St. Paul Cos. Inc. and its ‘A+’ counterparty credit and financial strength ratings on SPC’s 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. in the first half of 2004.

The decision to place these ratings on CreditWatch reflects the possibility that, following completion of the merger, Standard & Poor’s 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. Standard & Poor’s will be meeting with management in coming weeks to review the business and financial implications of the merger plan. These ratings are expected to remain on CreditWatch until the transaction closes.

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