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Pru holds onto to Egg despite credit card woes

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Prudential Plc has rejected Citibank‘s £950 million ($1,852.3 billion) offer to buy Egg Banking PLC. Prudential completed the takeover of the internet bank earlier this year after abandoning plans to auction the bank in 2004. Despite reporting a second-half operating loss recently, Prudential stated this week that it remains committed to the integration of Egg with the rest of its U.K. operations.

Junior bonds in Egg’s Pillar Funding Series credit card securitization trust were downgraded by Fitch Ratings in October and remain on negative watch by Moody’s Investors Service due to trust accounting irregularities ( ASR, 11/13/06). The group said it is intending to present new accounting measures by early 2007.

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