AM Best Assigns Issue Credit Rating to Markel Corporation’s New Senior Unsecured Notes
May 16 2019 - 9:30AM
Business Wire
AM Best has assigned the Long-Term Issue Credit Rating of
“bbb+” to the $600 million 5.0% 30-year senior unsecured notes due
May 2049 issued by Markel Corporation (Markel) (Glen Allen, VA)
[NYSE: MKL]. The outlook assigned to this Credit Rating (rating) is
stable. The existing ratings of Markel and its subsidiaries are
unchanged.
AM Best expects Markel to use the proceeds from this offering to
retire upcoming debt obligations due in 2019, in addition to
general corporate purposes. Following this issuance, AM Best
expects Markel’s debt-to-total capital ratio to increase modestly
but remain within the guidelines for the assigned ratings. However,
its debt-to-tangible capital ratio will be elevated by an increase
in goodwill plus intangible assets associated with recent
acquisitions, including the exclusive agreement to acquire Nephila
Capital Ltd., which closed in November 2018. However, concerns
regarding the increase in goodwill plus intangibles as a percentage
of both total equity and capital are offset by the solid cash flows
associated with the businesses acquired, Markel’s strong overall
liquidity evidenced by significant parent-only cash and marketable
securities and its long-term success in executing and integrating
acquired insurance and non-insurance entities.
Although overall earnings and the interest coverage ratio was
impacted negatively by the increase in the frequency and severity
of catastrophe losses in 2017, Markel historically has generated
solid interest coverage ratios, which improved in 2018 and so far
year-to-date in 2019.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Understanding Best’s Credit Ratings. For
information on the proper media use of Best’s Credit Ratings and AM
Best press releases, please view Guide for Media - Proper
Use of Best’s Credit Ratings and AM Best Rating Action Press
Releases.
AM Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2019 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Lewis DeLosaFinancial Analyst+1 908 439 2200,
ext. 5529lewis.delosa@ambest.com
Jennifer MarshallDirector+1 908 439 2200, ext.
5810jennifer.marshall@ambest.com
Christopher SharkeyManager, Public Relations+1
908 439 2200, ext. 5159christopher.sharkey@ambest.com
Jim PeavyDirector, Public Relations+1 908 439
2200, ext. 5644james.peavy@ambest.com
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