AM Best Assigns Issue Credit Ratings to Prudential Financial Inc.?s Forthcoming Junior Subordinated Notes

BY Business Wire | CORPORATE | 08/12/22 12:40 PM EDT

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Long-Term Issue Credit Rating of ?bbb? (Good) to the forthcoming $1.2 billion, 6% junior subordinated notes, due Sept. 1, 2052, and the $300 million, 5.95% junior subordinated notes, due Sept. 1, 2062, to be issued by Prudential Financial, Inc. (Prudential) (Newark, NJ) [NYSE: PRU]. The outlook assigned to these Credit Rating (rating) is stable. All other ratings of Prudential and its subsidiaries are unchanged.

The proceeds from this debt issuance are expected to be used for general corporate purposes, which may include the redemption or repurchase of Prudential?s $1.5 billion aggregate principal amount of the 2043 notes. The impact on Prudential?s debt leverage is expected to be neutral over the medium term as a higher leverage ratio will be realized prior to the note redemption before decreasing to the mid 20% range and the interest coverage remains favorable. AM Best notes Prudential?s strong liquidity position with approximately $7 billion in cash and liquid assets through June 30, 2022. Also noted is Prudential?s second-quarter 2022 earnings report, in which the company?s annual assumption update resulted in a reserve increase of $1.4 billion on a pre-tax basis, largely in its Individual Life Insurance business. Furthermore, the strength of its balance sheet is supported by a diversified investment portfolio and solid risk-adjusted capital measures at its operating companies, which are expected to remain within target levels.

This press release relates to Credit Ratings that have been published on AM Best?s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best?s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best?s Credit Ratings, Best?s Performance Assessments, Best?s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best?s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright ? 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article