Moody's rates AXIS notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to the $500 million 5.875% 10-year senior notes issued by AXIS Specialty Finance LLC and guaranteed by AXIS Capital Holdings Ltd.

The outlook is stable.

The proceeds will be used for general corporate purposes, which may include share repurchases.

The agency said this debt issue draws on the ample borrowing capacity that AXIS Capital had. But considering the potential for more share buybacks and recent losses on the companies' credit and political risk business, Moody's thinks the ratings have little tolerance for more leverage following this issuance.

The Baa1 senior unsecured debt rating on AXIS Capital is based on the credit support provided by its various insurance operating subsidiaries and reasonable financial flexibility, though financial leverage will go up meaningfully as a result of this debt issue, Moody's said.

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