S&P rates W.R. Berkley notes BBB-

S&P said it assigned its BBB- debt rating to W.R. Berkley Corp.'s proposed subordinated debentures due 2059.

Proceeds are expected to be used for general corporate purposes. “We also expect some of the proceeds to be earmarked to repay its senior notes due 2020. We classify the debentures as having intermediate equity content. We include securities of this nature, up to a maximum of 15%, in our calculation of total adjusted capital, which forms the basis of our consolidated risk-based capital analysis of insurance companies,” said S&P in a press release.

The agency said it sees pro forma for this transaction, financial leverage to be about 32% (including capitalized lease obligations) at the end of December. Over the next 24 months, S&P said it expects financial leverage to improve to less than 30% and fixed-charge coverage to be 5x-6x.

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