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AM Best Assigns Issue Credit Rating to CSAA Insurance Exchange?s New Surplus Notes

BY Business Wire | CORPORATE | 02/11/25 02:14 PM EST

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Long-Term Issue Credit Rating of ?a-? (Excellent) to the $500 million, 8.125% surplus notes, due February 2045, issued by CSAA Insurance Exchange (CSAA) (Walnut Creek, CA). The outlook assigned to this Credit Rating (rating) is negative.

The surplus notes are intended to support the company?s capital in anticipation of further premium growth and provide an additional layer of protection for catastrophic events, as well as enhance CSAA?s financial flexibility. Following the surplus notes issuance, the financial leverage at CSAA will be well within AM Best?s guidelines for the rating and the interest coverage is expected to be strong.

The notes are callable at par any time after 10 years from the issue date, in whole or in part, with 30 days prior notice and prior approval by the California Department of Insurance.

The Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of ?a+? (Excellent) for the insurance operations of CSAA remain 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 ? 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

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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.

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