Fitch Ratings has assigned a ‘BBB’ rating to Prudential Financial, Inc.’s recent issuance of $500 million of 2.75% three-year and $750 million of five-year 3.875% notes. The Rating Outlook is Stable. PRU’s other ratings are not affected by this rating action. See a complete list of ratings at the end of this release.
PRU’s leverage remains within expectations for the current rating. Proceeds from the debt issuance are expected to be used for general corporate purposes.
Fitch’s ratings on PRU and its subsidiaries continue to reflect its strong competitive position in the U.S. retail and institutional life and retirement markets. The company reported positive net flows and sales growth in 2009 despite the ongoing disruptions in the market. PRU also successfully closed on the sale of its minority stake in Wachovia Securities on Dec. 31, 2009. As expected, the sale generated a GAAP after-tax gain of approximately $1.5 billion and should increase PICA’s risk-based capital ratio by more than 100 points.
On Dec. 21, 2009, Fitch affirmed PRU’s ratings and revised the Outlook to Stable from Negative. The Outlook revision reflects Fitch’s view that PRU has made considerable progress addressing prior concerns regarding the company’s capitalization, liquidity position, and overall financial flexibility. While Fitch continues to be concerned about PRU’s ongoing exposure to heightened investment losses, Fitch believes that the company is well positioned to address future expected investment losses and other contingencies over the medium term.
