Fitch Rates Prudential Financial Inc.'s Senior Debt 'BBB+'

CHICAGO--()--Fitch Ratings has assigned a 'BBB+' rating to $600 million of senior unsecured notes issued by Prudential Financial, Inc. (PFI). The Rating Outlook for PFI is currently Positive.

KEY RATING DRIVERS

The ratings are equivalent to the ratings assigned to PFI's existing senior unsecured notes, and reflect standard notching based on Fitch's rating criteria.

Fitch expects proceeds from the debt issuance to be used for general corporate purposes including funding debt maturing in 2015. As a result, Fitch's view of financial leverage is not impacted by this issuance.

PFI's balance sheet fundamentals remain consistent with rating expectations, and recent financial performance has been strong. The ratings assigned to PFI and its subsidiaries continue to reflect the company's very strong competitive position in the U.S. and Japanese life insurance markets.

The Positive Outlook reflects PFI's improved operating and earnings profile, which has benefited from recent acquisitions and improved market conditions. Recent financial performance has exceeded rating expectations, and has led to a material improvement in key credit metrics associated with interest coverage. Fitch expects PFI's ability to sustain recent improvement in financial performance, and progress on reducing financial leverage could lead to an upgrade within the next 12-24 months.

RATING SENSITIVITIES

Key rating triggers that could result in an upgrade include:

--Reduction in financial leverage to 28% or below;

--GAAP interest coverage remaining in the 8x-10x range (based on pre-tax adjusted operating earnings);

--Stated NAIC RBC ratio remaining near current levels;

--TFC ratio at or below 1.3X;

--Japan's solvency margin ratio remaining above 700%;

--No deterioration in the creditworthiness of PFI's Japan business.

Triggers that could result in a downgrade include:

--Financial leverage above 35%;

--Total financing and commitments ratio above 1.5x;

--GAAP interest coverage ratio below 5x;

--Stated NAIC RBC ratio below 400%;

--Japan's solvency margin ratio below 600%.

Fitch has assigned the following rating:

Prudential Financial, Inc.

--$350 million of 2.35% senior notes due 2019 'BBB+';

--$250 million of 4.60% senior notes due 2044 'BBB+'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology, November 2013.

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=723072

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=850874

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Contacts

Fitch Ratings
Primary Analyst
Douglas L. Meyer, CFA
Managing Director
+1-312-368-2061
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Bradley S. Ellis, CFA
Director
+1-312-368-2089
or
Committee Chairperson
James Auden
Managing Director
+1-312-368-3146
or
Media Relations
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Douglas L. Meyer, CFA
Managing Director
+1-312-368-2061
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Bradley S. Ellis, CFA
Director
+1-312-368-2089
or
Committee Chairperson
James Auden
Managing Director
+1-312-368-3146
or
Media Relations
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com