S&P, Best Rate Zurich Bonds

September 4, 2008

Both Standard & Poor’s and A.M. Best have given high ratings to Zurich’s latest debt issue. S&P said it has “assigned its ‘A+’ long-term senior unsecured debt rating to the proposed Swiss franc (CHF) 800 million [$720 million] dual-tranche fixed-rate bonds to be issued under Switzerland-based Zurich Insurance Co.’s (ZIC; AA-/Stable/A-1+) $10 billion Euro Medium-Term Note program. The issuers will be ZIC (CHF 500 million [$450 million]) and Zurich Finance (USA) Inc. (CHF 300 million [$270 million]).

Best assigned an “a” rating to the bonds with a positive outlook. It also noted that they were both ” issued under the EMTN program,” and that the “proceeds of these issues will be used for general corporate purposes.”

S&P added: “ZIC is a core operating entity of the Zurich Financial Services group. It will provide an irrevocable unconditional guarantee for the CHF300 million bond to be issued by Zurich Finance (USA) Inc. The ‘A+’ rating on the bonds, which is one notch below the counterparty credit and insurer financial strength rating on ZIC, reflects the structural subordination of senior creditors to ZIC’s primary insurance policyholders.”

Sources: Standard & Poor’s – www.standardandpoors.com and A.M. Best – www.ambest.com

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