OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a debt rating of "a-" to the forthcoming $400 million 5.30 % senior unsecured notes due 2044 of Nationwide Financial Services Inc. (Nationwide) (Columbus, OH). The assigned outlook is stable. Nationwide’s existing issuer credit and debt ratings are unchanged.
Proceeds from the issuance are expected to be used to retire $400 million of maturing senior unsecured notes in 2015 with no material change in financial leverage expected. Both interest coverage and financial leverage are expected to remain within the guidelines for the current ratings once the 2105 notes are paid down.
The ratings reflect Nationwide’s prominent market positions in multiple product lines, such as variable annuities and pensions, significant brand equity, the favorable risk-adjusted capitalization of its subsidiaries and relatively stable operating performance. However, these strengths are partially offset by Nationwide’s relatively high exposure of assets under management subject to equity market volatility and interest rate movements. This concern is partially mitigated by an increasing percentage of investment only variable annuities sold, which is gradually reducing the risk profile of Nationwide’s annuity block.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Equity Credit for Hybrid Securities
- Insurance Holding Company and Debt Ratings
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