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Fitch Rates Prudential Financial's Senior Debt Issuance 'A-'.

Chicago: Fitch Ratings has assigned an 'A-' rating to $1.9 billion of senior unsecured notes issued by Prudential Financial, Inc. (PFI). Existing ratings assigned to PFI and its affiliates are unaffected by today's rating action. The Rating Outlook is Stable.


The rating assigned to the new senior notes is equivalent to the rating assigned to PFI's existing senior notes. The notes are rated one notch below PFI's Long-term Issuer Default Rating (IDR), which reflects standard notching based on Fitch's rating criteria.

The new notes are being issued in exchange for existing debt. As a result, this issuance is not expected to impact Fitch's view of PFI's financial leverage.


Given PFI's proportionally large Japan operations, its ratings are somewhat constrained by the current 'A' Japan sovereign rating. As a result, an upgrade of PFI's ratings is unlikely absent an upgrade of the Japan sovereign rating. A downgrade of the Japan sovereign rating to 'A-' would likely result in a one-notch downgrade of the 'AA-' Insurer Financial Strength (IFS) ratings to 'A+'.

Additional key rating sensitivities that could result in an upgrade include:

--Reduction in financial leverage to 20% or below;

--GAAP fixed-charge coverage ratio in the 12x to 14x range;

--Regulatory capital ratios in the U.S. and Japan remaining near current levels;

--Prism capital score of 'Very Strong' and TFC ratio at or below 0.8x.

The key rating sensitivities that could result in a downgrade include:

--GAAP return on equity (ROE) below 10%;

--Financial leverage above 30%;

--TFC above 1.5x; stated NAIC RBC ratio below 450% and Japan solvency margin ratio (SMR) below 700%;

--Prism capital score below 'Strong' and GAAP fixed charge coverage ratio below 8x.


Fitch has assigned the following rating:

Prudential Financial, Inc.

--$895 million of 3.905% senior unsecured notes due 2047 'A-';

--$1,039 million of 3.935% senior unsecured notes due 2049 'A-'.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Geographic Code:9JAPA
Date:Feb 19, 2018
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