AM Best Assigns Issue Credit Rating to Markel Group Inc.?s Senior Unsecured Notes

BY Business Wire | CORPORATE | 05/17/24 09:43 AM EDT

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Long-Term Issue Credit Rating (Long-Term IR) of ?bbb+? to $600 million of 6.00% senior unsecured notes due 2054 issued by Markel Group Inc. (MKL) (Glen Allen, VA) [NYSE: MKL]. The outlook assigned to this Credit Rating (rating) is stable. The debt will rank equally in right of payment with the company?s outstanding senior unsecured notes.

The proceeds will be used for general corporate purposes, which may include the redemption of Markel?s $600 million of Series A 6.00% preferred shares that will be callable in June 2025. The assignment of the Long-Term IR considers the rating profile of Markel?s principal insurance subsidiary units, as well as the parent company?s financial leverage, coverage and overall debt servicing profile, and the application of appropriate notching to reflect structural subordination of the holding company?s senior unsecured debt.

Markel?s financial leverage, as calculated by AM Best, was in the low-to-mid 20% range at year-end 2023 and will remain in the mid 20% range following the new debt offering. Earnings before interest and taxes (adjusted for capital gains/losses run through the income statement) coverage of interest expenses and preferred dividends has been strong, averaging 6.4 times over the past three years, albeit declining to 6.0 times in 2023.

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 ? 2024 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