OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Long-Term Issue Credit Rating (Long-Term IR) of “bbb+” to $600 million of 6.00% senior unsecured notes due 2054 issued by Markel Group Inc. (Markel) (Glen Allen, VA) [NYSE: MKL]. The outlook assigned to this Credit Rating (rating) is stable. The debt will rank equally in right of payment with the company’s outstanding senior unsecured notes.
The proceeds will be used for general corporate purposes, which may include the redemption of Markel’s $600 million of Series A 6.00% preferred shares that will be callable in June 2025. The assignment of the Long-Term IR considers the rating profile of Markel’s principal insurance subsidiary units, as well as the parent company’s financial leverage, coverage and overall debt servicing profile, and the application of appropriate notching to reflect structural subordination of the holding company’s senior unsecured debt.
Markel’s financial leverage, as calculated by AM Best, was in the low-to-mid 20% range at year-end 2023 and will remain in the mid 20% range following the new debt offering. Earnings before interest and taxes (adjusted for capital gains/losses run through the income statement) coverage of interest expenses and preferred dividends has been strong, averaging 6.4 times over the past three years, albeit declining to 6.0 times in 2023.
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