TEXT - Fitch rates Prudential Inc hybrid debt 'BBB-'

Wed Nov 28, 2012 3:46pm EST

Nov 28 - Fitch Ratings has assigned a 'BBB-' rating to Prudential Financial,
Inc.'s  (PFI) issuance of $500 million of 5.75% junior 
subordinated notes due in 2052. 

Fitch expects proceeds from the debt issuance to be used in part to refinance 
certain outstanding debt and for general corporate purposes. Fitch's view of 
PFI's financial leverage is not affected by this transaction. Fitch expects 
PFI's financial leverage ratio (FLR) to be near 35% at year-end 2012. Based on 
Fitch's rating criteria, this hybrid debt issuance has not been assigned any 
equity credit.  

The company's FLR was 36% as of Sept. 30, 2012, compared to 32% at year-end 
2011. The ratio increased due to an increase in financial debt related in part 
to the pre-funding of upcoming debt maturities, and to PFI's adoption on Jan. 1,
2012 of a new accounting standard for deferred acquisition costs, which reduced 
shareholders equity and increased the ratio by about 2%.  Total leverage, 
including all operating leverage, at Sept. 30, 2012 was modestly lower at 41% 
compared to 42% at year-end 2011.    

Fitch last reviewed and affirmed PFI's ratings on April 19, 2012. The 
affirmation of PFI's ratings reflects Fitch's view that the company's recent 
financial performance and balance sheet fundamentals remain consistent with 
rating expectations. 

Key rating triggers that could result in an upgrade of PFI's operating and 
holding company ratings are: continued reduced reliance on short-term funding; 
progress reducing the financial leverage ratio to the mid-20% range and total 
leverage below 40%; GAAP interest coverage in the 8x-10x range (based on pre-tax
adjusted operating earnings); stated NAIC RBC ratio remaining near current 
levels; and Japan solvency margin ratio above 700%. 

Key rating triggers that could result in a downgrade of PFI's holding company 
ratings (i.e. wider notching from the operating company) include: an FLR above 
35%; outstanding commercial paper (CP) above 10% of total debt on a sustained 
basis; a total financing and commitments ratio above 1.5x; and/or a GAAP 
interest coverage ratio below 5x. 

Triggers that could result in a downgrade of both operating and holding company 
ratings include: a stated NAIC RBC ratio below 400%, and Japan solvency margin 
ratio below 600%, as well as a more significant breach of the holding company 
triggers noted above.

Fitch has assigned the following rating: 

Prudential Financial, Inc.

--5.63% junior subordinated notes due Nov. 15, 2043 'BBB-'