OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Long-Term Issue Credit Rating of “bbb+” (Good) to the $300 million, 7% surplus notes, due October 2064, issued by Farmers Insurance Exchange (Woodland Hills, CA). The outlook assigned to this Credit Rating (ratings) is stable.
The proceeds from the surplus notes issuance are expected to be used for general purposes, and the financial leverage will remain within AM Best’s guidelines for the company’s current rating. Additionally, the company’s liquidity is considered sufficient to service the debt.
Subject to certain restrictions, Farmers Insurance Exchange may redeem, in whole or in part, the surplus note in two different scenarios. The first allows Farmers Insurance Exchange to call it during the three-month period prior to, and including, Oct. 15, 2054 (the par call period), at a redemption price equal to 100% of the principal amount of the note being redeemed. The second allows Farmers Insurance Exchange to call the note at any time on any date that is not within the par call period, at a redemption price equal to the make-whole redemption price, plus accrued and unpaid interest. The surplus notes will mature on Oct. 5, 2064.
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