Last week, Fitch Ratings assigned a debt rating of "BBB+" on the
recently issued 5.75% senior unsecured notes of
American Financial Group Inc.
), according to Reuters. Concurrently, the rating agency affirmed
its Issuer Default Rating (IDR) of "A-" on the umbrella company and
the debt rating on its various outstanding senior notes at
Fitch also affirmed the IDR of American Financial's operating
subsidiaries at "A+". The rating agency holds a stable outlook for
all these ratings.
The Fitch ratings follow similar action by A.M. Best Co.,
Standard & Poor's Ratings Services (S&P) and Moody's
Investor Services of
) earlier. While A.M. Best assigned a rating of "bbb+" on the
notes, Moody's conferred a "Baa2" rating. Both agencies have a
positive outlook on the ratings.
Additionally, S&P assigned a "BBB+" rating on the notes. All
other existing senior unsecured notes of American Financial also
carry a "BBB+" rating from S&P. Further, the rating agency
assigned a counterpart credit rating of "BBB+" with a stable
outlook on the company.
American Financial announced the issue of the senior notes worth
$125 million in August. These notes are scheduled to mature on
August 25, 2042. However, the company will allow the redemption of
100% of the principal amount plus accrued and unpaid interest on
these notes from August 25, 2017.
American Financial is also expected to submit an application for
the listing of these unsecured senior notes on the New York Stock
Exchange. On receiving approval from the regulatory bodies, trading
should begin within 30 days after the issuance, with the "AFA"
The proceeds from this issue will be used to buy back American
Financial's outstanding 7.125% senior debenture due 2034. Last
week, the company announced its intention to redeem the debentures
worth $115 million. The debentures, which are listed on the New
York Stock Exchange under the trading symbol "AFE", will be
redeemed on September 28, 2012. The redemption amount will include
the principal as well as the accrued interest. The residual
proceeds will be used to finance the daily operations of the
American Financial and aid its working capital.
American Financial currently carries a Zacks #3 Rank, which
implies a short-term Hold rating.
AMER FINL GROUP (AFG): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
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