Moody's rates American Financial notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to about $125 million of additional 3.5% senior notes due 2026 being issued by American Financial Group, Inc.

The company is also upsizing the existing 4.5% senior notes due 2047, also rated Baa1, by approximately $240 million.

The proceeds from the combined notes offering, which constitutes a re-opening of previously issued debt series, together with cash on hand, are expected to be used to redeem the company's $350 million of 9.875% senior notes due 2019.

The outlook is stable.

The ratings reflect the group's long-standing track record and underwriting expertise as a lead specialty-market underwriter across a diverse array of niche property-casualty (P&C) commercial lines segments, as well as its strong profitability and position in the fixed annuity markets, Moody's said.

The group maintains a good financial profile in terms of operating profitability, capital adequacy, asset quality and holding company liquidity, the agency said.

These strengths are tempered by relatively high operating leverage at the P&C operation and moderate exposure to adverse reserve development in its commercial casualty portfolio, Moody's said.

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