AM Best Comments on Fairfax Financial Holdings Limited’s Re-Opened Senior Unsecured Notes

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Long-Term Issue Credit Rating of “a-” (Excellent) on the CAD 400 million (USD 283 million) 4.40% senior unsecured notes due Feb. 27, 2036, originally issued on Feb. 24, 2026 by Fairfax Financial Holdings Limited (Fairfax) (Toronto, Canada) [TSX: FFH], remains unchanged despite the additional notes being added to the same series. Fairfax has announced that it has issued an additional CAD 300 million (USD 212 million) senior unsecured notes under that offering, increasing the total to CAD 700 million (USD 495 million).

The Long-Term Issuer Credit Rating of Fairfax, as well as the ratings of its operating subsidiaries and all other debt issuances, are unchanged. Fairfax’s adjusted debt-to-tangible capital, as measured by AM Best, increased marginally to 30.4% from 30.0% since Fairfax’ last debt issue, remaining 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 measured by EBIT to interest expense plus preferred dividends is still expected to reach 6.6 times at year-end 2026, compared with 5.3 times at year-end 2025, as measured by AM Best, reflecting adequate interest 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 at the end of 2025. 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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