AM Best Assigns Issue Credit Rating to Fairfax Financial Holdings Limited Senior Unsecured Notes

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Long-Term Issue Credit Rating of “a-” (Excellent) to the recently issued $750 million, 6.2% senior unsecured notes, due June 2056, of Fairfax Financial Holdings Limited (Fairfax) (Toronto, Canada) (TSX: FFH). The outlook assigned to this Credit Rating (rating) is stable.

The Long-Term Issuer Credit Rating of Fairfax, as well as the ratings of its operating subsidiaries and all other debt issuances, are unchanged, as Fairfax’ adjusted debt leverage, as measured by AM Best, increased marginally to 30.0% from 28.4% and remained within AM Best’s neutral assessment level under its Holding Company Financial Assessment. Equity credit for hybrid securities was applied to the debt leverage calculation and will be applied to the Best’s Capital Adequacy Ratio (BCAR), as the analysis is done at the consolidated level, and considers Fairfax as an insurance holding company down-streaming its resources to its operating companies. Interest coverage measuring EBIT/interest expense plus preferred dividends is expected to reach 6.6x at the end of 2026, compared with 5.3x at the end of 2025, as measured by AM Best, reflecting an adequate coverage. Additionally, Fairfax benefits from ample liquidity and financial flexibility provided by its access to capital markets. Over 70.0% of Fairfax’s $73.0 billion investment portfolio is allocated to cash & cash equivalents, short-term investments and bonds, with a total effective duration under 2.5 years. Over 65% of Fairfax’ bonds portfolio is rated AA and AAA. Fairfax intends to use the net proceeds from the offering for general corporate purposes.

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AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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