Moody's rates Prudential Financial notes Baa3(hyb)

Moody's Investors Service said it assigned a Baa3(hyb) subordinated debt rating to Prudential Financial's $500 million issuance of 5.2% fixed- to floating-rate debentures.

The proceeds are expected to be used for general corporate purposes as well as the redemption of some of the company's outstanding 9% junior subordinated notes due 2068.

The outlook is positive.

Prudential's debt issuance represents an opportunity to refinance some of its higher coupon, junior subordinated notes with longer duration, lower cost hybrid securities, Moody's said.

The company's Baa2 senior unsecured debt rating and the A2 insurance financial strength rating of its U.S. life insurance operating companies are based primarily on the group's strong brand name and international business franchises, diversified core earnings base and strong capital position, the agency said.

These credit strengths are tempered by still high levels of operating and financial debt, higher than average equity market sensitivity and a relatively complex capital structure, Moody's said.

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