Best’s News & Research Service - October 30, 2014 04:27 PM (EDT)
A.M. Best Affirms Debt Rating of Liberty Mutual Group Inc.'s Reopened Senior Unsecured Notes
Oldwick //BestWire// - A.M. Best has affirmed the debt rating of "bbb" for the 4.850% 30-year, senior unsecured notes, due 2044, of Liberty Mutual Group Inc. (LMGI) (Boston, MA). The outlook is stable. The existing ratings of LMGI and its subsidiaries are unchanged.
The debt rating applies to the recently announced $300 million 4.850% senior unsecured notes, due 2044, to be issued by LMGI, as well as its existing $750 million 4.850% senior unsecured notes, due 2044, issued July 24, 2014. The additional notes being offered constitute a further issuance of, and are fungible with, the existing notes. The $300 million of additional notes were priced at 99.929%, plus accrued interest from July 24, 2014, with a yield to maturity of 4.854%. These additional notes offer terms identical to the existing notes issued on July 24, 2014, with the exception of the issue date and the offering price. Proceeds of the new notes offered are intended to be used for general corporate purposes.
As a result of the new notes offering, A.M. Best expects LMGI's proforma unadjusted and adjusted debt-to-capital ratios (excluding accumulated other comprehensive income) to be only modestly higher than its proforma ratios (including the existing $750 million of notes issued in July) of 27% and 22%, respectively, at June 30, 2014. The company's financial leverage and coverage ratios are within A.M. Best's guidelines for LMGI's current rating and are expected to remain so over the near term.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Analyzing Insurance Holding Company Liquidity
- Equity Credit for Hybrid Securities
- Evaluating U.S. Surplus Notes
- Insurance Holding Company and Debt Ratings
- Risk Management and the Rating Process for Insurance Companies
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