A.M. Best Assigns Rating to Prudential Financial's $2.0 Billion Senior Convertible Note Offering

Business Wire, Dec 8, 2006

OLDWICK, N.J. -- A.M. Best Co. has assigned a rating of "a-" to Prudential Financial, Inc's. (PFI) [NYSE: PRU] (Newark, NJ) $2.0 billion convertible floating rate senior unsecured notes, due December 2036. The rating outlook is stable.

A.M. Best expects the offering proceeds to be utilized initially to purchase a high-quality duration-matched investment portfolio and to repurchase approximately $205 million of PFI common stock as part of its ongoing treasury stock repurchase program. In the future, the company may use the remaining proceeds for general corporate purposes. The notes are floating rate securities, with an issuer call option and investor put option.

The rating reflects PFI's diversified earnings profile, prominent market position within its core business lines, superior level of risk-adjusted capitalization, strong financial discipline and significantly improved operating returns. A.M. Best notes that while total leverageCoboth financial and operating leverageCohas increased in recent years, PFI has shown significant improvement in its historical fixed charge coverage ratios and has significantly strengthened the liquidity of its balance sheet as measured by its strong cash and cash equivalent ratio to equity. A.M. Best notes that the group's financial leverage and interest coverage ratios remain within expectations for the current rating category.

Partly offsetting these strengths is PFI's challenge to maintain strong compound growth in its operating margins, revenue and assets under management; continued assertive emphasis on capital management; further enhancement of its risk management capabilities; and the ability to fully realize revenue growth from prior acquisitions.

The following rating has been assigned with a stable outlook:

Prudential Financial, Inc.Co

-- "a-" on $2 billion convertible floating rate senior unsecured notes, due 2036

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.