AM Best Assigns Issue Credit Rating to Prudential Financial Inc.’s New Junior Subordinated Notes

Rhea-AI Summary

AM Best has assigned a Long-Term Issue Credit Rating of “bbb” to Prudential Financial’s $1 billion junior subordinated notes with a 5.125% interest rate due March 1, 2052. The outlook is stable, with all existing ratings for Prudential unchanged. The funds will support general corporate purposes, including repurchasing $1 billion in notes due in 2042. This issuance is expected to stabilize Prudential’s financial leverage and improve interest coverage ratios due to reduced interest expenses. Prudential holds above-average cash resources.

Positive

• Assigned Long-Term Issue Credit Rating of 'bbb' indicates a good financial standing.
• Stable outlook suggests continued confidence in Prudential's financial stability.
• Expected neutral impact on financial leverage following debt issuance.
• Anticipated positive effect on interest coverage ratios from lower interest expenses.
• Above-average cash resources indicate strong liquidity.

Negative

• None.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned Long-Term Issue Credit Rating of “bbb” (Good) to the $1 billion, 5.125% junior subordinated notes, due March 1, 2052, of Prudential Financial, Inc. (Prudential) (Newark, NJ) [NYSE: PRU]. The outlook assigned to the 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 junior subordinated notes of $1 billion aggregate principal amount, due in 2042. AM Best expects the issuance to have a neutral impact on Prudential’s financial leverage following the redemption, and a positive impact on interest coverage ratios due to lower interest expenses. AM Best also notes that Prudential currently maintains above-average levels of cash resources.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220303005679/en/

Edward Kohlberg

Director

+1 908 439 2200, ext. 5664

edward.kohlberg@ambest.com



Michael Porcelli

Senior Director

+1 908 439 2200, ext. 5548

michael.porcelli@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 is Prudential Financial's new credit rating assigned by AM Best?

AM Best assigned Prudential Financial a Long-Term Issue Credit Rating of 'bbb'.

What is the purpose of Prudential Financial's $1 billion junior subordinated notes?

The proceeds will be used for general corporate purposes, including repurchasing existing notes.

When are Prudential Financial's junior subordinated notes due?

The junior subordinated notes are due on March 1, 2052.

How does the new debt issuance impact Prudential's financial leverage?

The issuance is expected to have a neutral impact on Prudential's financial leverage.

What is the interest rate on Prudential Financial's junior subordinated notes?

The interest rate on the junior subordinated notes is 5.125%.