A.M. Best Assigns Debt Rating to CNA Financial's Forthcoming Senior Notes.

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bbb" to the forthcoming $500 million senior unsecured notes to be issued by CNA Financial Corporation (CNAF) (NYSE:CNA). The financial strength and issuer credit ratings of CNA Insurance Companies (CNA) (both domiciled in Chicago, IL) and CNAF's existing debt ratings remain unchanged. The outlook for all ratings is stable.

CNAF intends to use the net proceeds of the senior notes issuance and the issuance of common stock in roughly equal proportion to repurchase the Series H cumulative preferred stock plus all unpaid dividends accrued through the date of redemption (approximately $994 million) and for other general corporate purposes. CNAF's financial leverage is expected to remain well below acceptable limits for its current rating, and although earnings coverage has varied widely over the last five years, available cash coverage remains in line with A.M. Best's expectation for the rating.

The rating reflects CNA's favorable risk-adjusted capitalization, improved underwriting fundamentals and good business position as a top writer within the commercial lines segment of the U.S. property/casualty industry. CNA's operating platform demonstrates considerable geographic and product line scope, strong service capabilities and a diversified distribution channel with well established agency relationships. The rating also considers CNA's financial flexibility derived through historical capital support provided by its ultimate parent, Loews Corporation.

Somewhat offsetting these favorable rating factors are CNA's unsatisfactory operating performance in the aggregate over the past five years, exposure to mass tort liabilities such as asbestos and environmental claims and historically adverse loss reserve development relating to core loss reserves. In addition, A.M. Best expects that price softening and increased competitive forces in the U.S. commercial lines sector could pressure underwriting margins to a moderate degree.

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A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.