Travelers 2008 Annual Report Download - page 113

redeemable preferred stock. These credit exposures are diversified across a number of countries and
industries. The following table shows the industry sectors for those exposures.
Carrying Average
(at December 31, 2008, in millions) Value Credit Rating
Credit Sector(1)
Government:
Debt securities issued by foreign governments ........ $ 1,519 Aaa
Corporate:
Financial
Bank .................................... 1,821 Aa3
Insurance ................................. 497 Aa3
Brokerage and asset management ............... 282 A2
Finance/leasing ............................. 189 A3
Total financial ............................ 2,789
Industrial ................................... 4,972 Baa1
Public utility ................................. 1,956 Baa1
Sovereign corporate securities(2) .................. 1,341 Aaa
Commercial mortgage-backed and project loans(3) ..... 766 Aaa
Canadian municipal securities .................... 571 Aa1
Asset-backed and other ......................... 399 A1
Total corporate ........................... 12,794
Total credit exposure ....................... $14,313 A1
(1) Credit sectors include debt securities issued by foreign governments, corporate bonds and
redeemable preferred stocks.
(2) Sovereign corporate securities include corporate securities that are backed by a
government and include sovereign banks and securities issued under the Temporary
Liquidity Guaranty and the Federal Ship Financing Programs.
(3) Included in Commercial mortgage-backed securities and project loans are $221 million of
securities guaranteed by the U.S. government and $37 million by government sponsored
enterprises.
The Company’s fixed maturity investment portfolio at December 31, 2008 included $39.06 billion
of securities which are obligations of states, municipalities and political subdivisions (collectively
referred to as the municipal bond portfolio). The municipal bond portfolio is diversified across the
United States, the District of Columbia and Puerto Rico, and includes general obligation and revenue
bonds issued by states, cities, counties, school districts, and similar issuers. Included in the municipal
bond portfolio are $5.45 billion of advance refunded or escrowed-to-maturity bonds. Advance refunded
and escrowed-to-maturity bonds are bonds for which an irrevocable trust has been established to fund
the remaining payments of principal and interest. Such escrow accounts are verified as to their
sufficiency by an external auditor and almost exclusively involve U.S. Treasury securities. The following
table shows the geographic distribution of the remaining $33.61 billion of municipal bonds which are
not advance refunded or escrowed-to-maturity.
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