The counterparty credit rating on The St. Paul Travelers Cos. (St. Paul Travelers) is based on the group's very strong market position, strong operating performance, very strong operating company capitalization, and conservative financial leverage and coverage ratios. The ratings also reflect our view that the reserving and integration issues arising from the merger of St. Paul Cos. Inc. (St. Paul) and Travelers Property Casualty Corp. (Travelers) on April 1, 2004, have been successfully addressed. Partially offsetting these strengths is the possibility of some further adverse development of reserves associated with the pre-merger liabilities of the St. Paul Fire&Marine Group and the company's large exposure to asbestos claims. On June 15, 2006, St. Paul Travelers issued $800 million of
