AM Best Assigns Issue Credit Rating to The Hartford Financial Services Group, Inc.’s New Senior Unsecured Notes

Rhea-AI Summary

AM Best has assigned a Long-Term Issue Credit Rating of “a-” (Excellent) to The Hartford Financial Services Group (NYSE: HIG). This rating applies to the recently announced $600 million senior unsecured notes, maturing in September 2051. The funds will be used to redeem existing $600 million junior subordinated debentures due 2042. AM Best foresees a modest increase in financial leverage but maintains that it will stay within acceptable limits for the current ratings, which were affirmed in July 2021.

Positive

• Assigned Long-Term Issue Credit Rating of 'a-' (Excellent) by AM Best.
• Stable outlook for the assigned Credit Rating.
• Funds from note issuance will be used to redeem higher-interest debt, improving financial position.

Negative

• Financial leverage expected to increase modestly after the issuance.

 

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Long-Term Issue Credit Rating (Long-Term IR) of “a-” (Excellent) to The Hartford Financial Services Group, Inc.’s (The Hartford) (headquartered in Hartford, CT) [NYSE: HIG] recently announced $600 million, 2.9% senior unsecured notes due September 2051. The outlook assigned to this Credit Rating (rating) is stable.

The proceeds from the sale of the notes will be used to redeem the outstanding $600 million principal amount of the company’s 7.875% fixed-to-floating rate junior subordinated debentures due 2042, which are redeemable at par on or after April 15, 2022. AM Best expects The Hartford’s financial leverage to increase modestly immediately following the issuance, but it will remain well within guidelines to support its current ratings. Coverage ratios remain favorable for The Hartford’s ratings, which were affirmed in late July 2021 (see related press release).

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 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 © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210916005906/en/

Kate Steffanelli

Senior Financial Analyst

+1 908 439 2200, ext. 5063

kate.steffanelli@ambest.com

Jennifer Marshall, CPCU, ARM

Director

+1 908 439 2200, ext. 5327

jennifer.marshall@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: AM Best

FAQ

What does the Long-Term Issue Credit Rating of 'a-' mean for The Hartford (HIG)?

The Long-Term Issue Credit Rating of 'a-' (Excellent) indicates strong creditworthiness and financial stability for The Hartford.

What is the significance of the $600 million senior unsecured notes issued by The Hartford?

The $600 million senior unsecured notes will be used to redeem existing higher-interest debt, potentially improving The Hartford's financial leverage.

When are the new senior unsecured notes due for The Hartford (HIG)?

The newly issued $600 million senior unsecured notes are due in September 2051.

How will The Hartford's financial position change after the issuance of new notes?

AM Best expects a modest increase in financial leverage, but it will remain within acceptable limits for current ratings.