Northwestern Mutual surplus notes receive aa rating from AM Best
The rating action follows Northwestern Mutual’s announcement of a $1.25 billion surplus notes issuance carrying a 6.05% coupon and maturing in 2056. The new debt keeps a stable outlook and supports the insurer’s general corporate funding needs while remaining subordinated to policyowner liabilities.
Highlights
- AM Best assigned a Long-Term Issue Credit Rating of 'aa' with a stable outlook to Northwestern Mutual's $1.25 billion 6.05% surplus notes due 2056.
- Proceeds from the surplus notes will be used for general corporate purposes, and the notes are subordinated to policyowner liabilities within the capital structure.
- Northwestern Mutual's financial leverage remains low at 20% and interest coverage exceeds 3x, supporting the company's strongest balance sheet and credit rating metrics.
Rating action and note structure
As reported by AM Best, the agency assigns a Long-Term Issue Credit Rating of “aa” (Superior) to The Northwestern Mutual Life Insurance Company’s recently announced surplus notes. The issuance totals $1.25 billion, carries a 6.05% rate and is due in 2056, with the outlook on the rating set at stable.The proceeds from the offering are designated for general corporate purposes. The newly issued surplus notes remain subordinated to policyowner liabilities, preserving their position within the insurer’s broader capital structure.
Capital profile and insurer credit implications
AM Best says Northwestern Mutual’s unadjusted financial leverage remains low at 20%, while interest coverage stays favorable at more than 3x after policyholder dividends. The agency says those measures remain within its guidelines for the assigned rating.The company’s existing ratings continue to reflect what AM Best assesses as its strongest balance sheet strength, alongside very strong operating performance, a very favorable business profile and very strong enterprise risk management. Those factors underpin the insurer’s broader credit standing as it adds the new surplus notes to its funding mix.
Our earlier article on AM Best’s ranking of U.S. life and health insurers highlighted how admitted assets across the industry rose to about $9.9 trillion at year-end 2025. It noted Athene US Life Group posted the fastest growth among the top 25 carriers, climbing to No. 8 as several major groups maintained their positions at the top of the table.
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