AM Best Assigns Issue Credit Rating to Fairfax Financial Holdings Limited?s Senior Unsecured Notes

BY Business Wire | CORPORATE | 08/12/22 04:04 PM EDT

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Long-Term Issue Credit Rating (Long-Term IR) of ?bbb? (Good) to the recently announced USD 750 million, 5.625% senior unsecured notes, due Aug. 16, 2032, of Fairfax Financial Holdings Limited (Fairfax) (Toronto, Canada). The outlook assigned to the Credit Rating (rating) is positive.

Fairfax intends to use substantially all of the net proceeds of this offering to purchase a portion of the non-controlling interests in Allied World Assurance Company Holdings, Ltd, and use any remainder for general corporate purposes.

Following completion of the transaction discussed above, Fairfax?s financial leverage measures are expected to be slightly elevated compared with year-end 2021. However, after accounting for the anticipated income from the sale of Crum & Forster Insurance Group?s pet business and underwriting gains through the remainder of 2022, it is anticipated that leverage ratios will fall back in line with the prior year end. Fairfax?s Long-Term Issuer Credit Rating of ?bbb? (Good), its existing Long-Term IRs and the ratings of its operating insurance subsidiaries are unchanged.

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.

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