Prudential gets AM Best 'bbb' rating on $750 million junior subordinated notes
Prudential Financial is adding new long-dated debt as it manages its capital structure and refinancing options. The insurer's new $750 million junior subordinated notes due 2056 receive a stable long-term issue credit rating, while a separate $450 million note issuance by PRICOA Global Funding I also receives a stable rating.
Highlights
- AM Best assigns 'bbb' rating to Prudential Financial's $750 million, 6.25% junior subordinated notes due 2056 and 'aa-' to PRICOA's $450 million, 5% notes due 2031, both with stable outlooks.
- Prudential may use proceeds from the new $750 million issuance to repurchase all of its existing $750 million 4.5% fixed-to-floating rate junior subordinated notes due 2047, callable in 2027.
- Following these issuances, Prudential's adjusted financial leverage is 25.6% with 45% equity credit, and parent-level liquidity stands at $3.7 billion as of March 31, 2026.
New debt ratings and planned use of proceeds
As reported by AM Best, the ratings agency assigns a Long-Term Issue Credit Rating of "bbb" (Good) to Prudential Financial, Inc.'s $750 million, 6.25% fixed-rate junior subordinated notes due 2056. At the same time, it assigns a Long-Term IR of "aa-" (Superior) to the $450 million, 5% medium-term notes due 2031 of PRICOA Global Funding I, with stable outlooks on both ratings.The proceeds from Prudential's junior subordinated notes are expected to be used for general corporate purposes. Those uses may include repurchasing all of Prudential's $750 million 4.5% fixed-to-floating rate junior subordinated notes due 2047, which are callable in 2027.
Capital position and liquidity implications
After the issuances, Prudential's adjusted financial leverage stands at 25.6%, as calculated by AM Best and including 45% equity credit. The agency says interest coverage is adequate.Liquidity remains strong at the parent company level, with $3.7 billion in highly liquid assets as of March 31, 2026. Prudential Financial is based in Newark, New Jersey and trades on the NYSE under the ticker PRU.
In our earlier article on Fitch’s affirmation of CVB Financial and Citizens Business Bank’s investment-grade ratings, we highlighted the agency’s view that solid capital, strong asset quality, and steady earnings support the Stable Outlook during the Heritage Commerce integration. We also noted Fitch’s expectation that commercial real estate concentration will rise post-merger but remain below key regulatory guidance, while capital ratios are projected to stay robust despite a decline after closing.
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