November 28, 2012 / 2:20 PM / in 5 years

TEXT-S&P rates Prudential Financial jr. sub. notes 'BBB+'

Nov 28 - Standard & Poor’s Ratings Services said today that it assigned its ‘BBB+’ junior subordinated debt rating of $500 million, (with an underwriter’s overallotment option of 15%) of junior subordinated notes due 2052 being offered by Prudential Financial Inc. (PRU).

The notes are rated two notches below our issuer credit rating on PRU, reflecting one notch for optional deferral and one notch for subordination to senior indebtedness, consistent with our hybrid ratings criteria. We will treat the notes as intermediate-equity content hybrids in our analysis because the notes allow optional deferral for up to five years, are subordinate to PRU’s senior indebtedness, and have more than 20 years remaining to maturity. Consistent with our criteria, we will treat the notes as minimal equity-content hybrids when they have fewer than 20 years remaining until maturity, and as debt in our analysis at that time.

The issuer credit rating on PRU is two notches lower than the ratings on its core operating companies. (Typically, the rating on a holding company is a full category, or three notches, below the ratings on the operating companies.) The nonstandard notching reflects PRU’s diverse sources of earnings and liquidity, as well as its strong fixed-charge coverage.


-- Holding Company Analysis, June 11, 2009

-- Hybrid Capital Handbook: September 2008 Edition, Sept. 15, 2008


Prudential Financial Inc.

Counterparty Credit Rating A/Stable/A-1

New Rating

$500 mil. Junior Subordinated Notes Due 2052

Jr. Subordinated Debt BBB+

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