Prudential's Books Hide $500 Million Loss

When asked by analysts about the credit rating, and whether it would be concerned about a possible downgrade, Prudential did not seem bothered, responding that when it originally went public it was rated A, could cope and, if necessary, had the resources to move capital to subsidiaries.

In addition to the capital discussion, the focus was on the realization of a put option held on a joint venture brokerage with Wachovia(WB Quote) that is expected to realize around $5 billion, netting $3.7 to $4 billion when exercised in January 2009 and payable to Prudential in January 2010.

Despite this positive note, it was recognized that the capital position of Prudential might well drop further, with possibly $1 billion being required to maintain the 350% risk-based capital ratio.

The company withdrew all guidance for the remainder of 2008 "in view of the current market volatility and extraordinary events and developments affecting financial markets generally."

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