OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Long-Term Issue Credit Rating of “bbb” (Good) to the forthcoming $1.2 billion, 6% junior subordinated notes, due Sept. 1, 2052, and the $300 million, 5.95% junior subordinated notes, due Sept. 1, 2062, to be issued by Prudential Financial, Inc. (Prudential) (Newark, NJ) [NYSE: PRU]. The outlook assigned to these 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 $1.5 billion aggregate principal amount of the 2043 notes. The impact on Prudential’s debt leverage is expected to be neutral over the medium term as a higher leverage ratio will be realized prior to the note redemption before decreasing to the mid 20% range and the interest coverage remains favorable. AM Best notes Prudential’s strong liquidity position with approximately $7 billion in cash and liquid assets through June 30, 2022. Also noted is Prudential’s second-quarter 2022 earnings report, in which the company’s annual assumption update resulted in a reserve increase of $1.4 billion on a pre-tax basis, largely in its Individual Life Insurance business. Furthermore, the strength of its balance sheet is supported by a diversified investment portfolio and solid risk-adjusted capital measures at its operating companies, which are expected to remain within target levels.
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