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Press release from Business Wire

A.M. Best Assigns Debt Rating to Prudential Financial, Inc.'s New Junior Subordinated Notes

Wednesday, August 08, 2012

A.M. Best Assigns Debt Rating to Prudential Financial, Inc.'s New Junior Subordinated Notes13:30 EDT Wednesday, August 08, 2012 OLDWICK, N.J. (Business Wire) -- A.M. Best Co. has assigned a debt rating of “bbb” to the recently issued $1.0 billion 5.875% fixed-to-floating rate junior subordinated notes of Prudential Financial, Inc. (PFI) (Newark, NJ) (NYSE: PRU). The assigned outlook is stable. The financial strength, issuer credit and existing debt ratings of PFI and its domestic life/health insurance companies are unchanged. The assigned debt rating reflects the notes' deeply subordinated status within PFI's capital structure. Specifically, these securities will rank junior to PFI's existing and future senior indebtedness and pari passu with PFI's existing junior subordinated notes. A.M. Best notes that the newly issued junior subordinated notes differ from the existing junior subordinated debt in that PFI may redeem the new notes on or after September 15, 2022 or at any time within 90 days after the occurrence of a “tax event,” a rating agency event” or a “regulatory capital event.” The net proceeds of the hybrid offering are expected to be used primarily to redeem a portion of PFI's outstanding retail medium-term notes and for general corporate purposes. The rating recognizes PFI's very strong liquidity and financial flexibility at the holding company in addition to the strong operating performance of its various business segments. PFI has repeatedly demonstrated its access to the capital markets, particularly over the past two years. A.M. Best also notes that PFI, consistent with its scale and business mix, continues to utilize significant amounts of operating leverage. However, incorporating partial equity credit for the new notes, financial leverage and interest coverage both remain within the guidelines for the company's current rating level. The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.A.M. Best Co.Ken Johnson, CFA, CTP, 908-439-2200, ext. 5056Senior Financial Analystken.johnson@ambest.comorThomas Rosendale, 908-439-2200, ext. 5201Assistant Vice Presidentthomas.rosendale@ambest.comorRachelle Morrow, 908-439-2200, ext. 5378Senior Manager, Public Relationsrachelle.morrow@ambest.comorJim Peavy, 908-439-2200, ext. 5644Assistant Vice President, Public