A.M. Best Co. has allotted a debt rating of "bbb+" to
Markel Corporation Inc
) 3.625% senior unsecured notes worth $250 million and the 5.0%
senior unsecured notes worth $250 million. The MKL notes are
scheduled to mature in 2023 and 2043 respectively. Both the
ratings carry a stable outlook.
The ratings reflect Markel's improving debt levels and
coverage ratios. The proceeds from the issuances will be deployed
for general corporate purposes including acquisition costs.
As of Dec 31, 2012, the debt to capital ratio of Markel was 28%
in line with the 2011 end debt to capital ratio. The debt to
equity ratio was 38%. Post the acquisition of
Alterra Capital Holdings Limited
), expected to close in the second quarter of 2013, the debt to
capital ratio of the company is expected to improve 100 basis
points to 27%. The acquisition is expected to improve the debt to
equity ratio by 400 basis points to 34% over the same time
Rating affirmations or upgrades from credit rating agencies
play an important part in retaining investor confidence in the
stock as well as maintaining the creditworthiness in the market.
We believe that Markel's present score with the credit rating
agencies will help it write more business going forward.
Last Nov, A.M. Best affirmed the issuer credit rating (ICR)
for Markel at "bbb+" as well as the debt ratings on its senior
unsecured debt at "bbb+". The rating agency also affirmed the
indicative ratings on the company's shelf registered securities -
preferred securities at "bbb-", subordinated debt at "bbb" and
senior unsecured debt at "bbb+". Additionally, A.M. Best affirmed
the financial strength rating (FSR) of Markel's subsidiary -
Markel North America Insurance Group (Markel N.A.) - at "A" and
its ICR at "a+". The credit rating agency also affirmed the FSR
and ICR of Markel's subsidiary FirstComp Insurance Company at
"B++" and "bbb+", respectively, and those of Deerfield Insurance
Company at " A-" and "a-". A.M. Best maintains a stable outlook
on all the ratings.
Travelers Companies Inc.
), another property and casualty insurer had its ratings affirmed
by another credit rating agency, Fitch ratings. Fitch reaffirmed
the Issuer Default Rating ("IDR") of Travelers last December. It
also maintained the senior unsecured notes at "A" and
subordinated notes at "BBB+". The Insurer Financial Strength
Rating (IFS) of the subsidiaries carried the rating of "AA". All
the ratings of TRV and its subsidiaries held a stable outlook.
The rating reflected Travelers' strong market position,
consistent earnings results and a robust balance sheet.
Markel Corporation carries a Zacks Rank #3 (Hold) while
Travelers carries a Zacks Rank #2 (Buy). Another industry major,
Cincinnati Financial Corporation
) carries a favorable Zacks Rank #1 (Strong Buy).
ALTERRA CAP HLD (ALTE): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
MARKEL CORP (MKL): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis
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