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Prudential Financial Inc.

S&P assigned its 'A' senior unsecured debt ratings to Prudential Financial Inc.'s (PRU) $500 million, 3.00% medium-term notes (MTN) Series D, due 2016, and $300 million, 5.625% medium-term notes Series D, due 2041.


The ratings on the senior unsecured issues reflect S&P’s 'A' counterparty credit rating on PRU, which reflects a nonstandard two-notch gap from the core insurance operating company ratings. Typically, the credit rating on a holding company is a full rating category below the ratings on the operating companies. The nonstandard notching reflects PRU's diverse sources of earnings from regulated U.S. and international insurance operations, as well as asset management subsidiaries, largely unrestricted. S&P expects that the company will use a portion the proceeds from these offerings to fund $350 million of MTNs maturing in December 2011, and the remainder for general corporate purposes.


Moody's has rated Prudential Financial Inc.'s (senior debt at Baa2, stable outlook) $800 million senior debt issuance (a draw down from Prudential's existing shelf registration, split between $500 million with a five-year maturity and $300 million with a 30-year maturity) at Baa2 (stable outlook). The proceeds of the proposed issuance are expected to be used for general corporate purposes and refinancing of an upcoming debt maturity.


Moody's said the debt serves as a refinancing of $350 million of debt maturities coming due in December 2011, and the agency views it as a credit-neutral event. Moody's said Prudential's Baa2 senior unsecured debt rating, and the A2 insurance financial strength rating of its U.S. life insurance operating companies, are based primarily on the group's strong brand name and leading market positions for a number of life insurance offerings. These offerings include individual life insurance, variable annuities, group life, and retirement and stable value products. The company's strengths also include its international business franchises, diversified core earnings base, and good capital position.



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