OLDWICK, N.J.–(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.
Contacts
Lewis DeLosa
Financial Analyst
+1 908 439
2200, ext. 5529
[email protected]
Jennifer Marshall
Director
+1 908 439 2200,
ext. 5810
[email protected]
Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159
[email protected]
Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644
[email protected]
