Fitch Rates CNA's $400MM Senior Debt 'BBB'

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has assigned a 'BBB' rating to CNA Financial Corporation's (CNA) new $400 million senior unsecured debt issue. CNA's other ratings are unaffected by this event. A full list of ratings follows at the end of this release.

KEY RATING DRIVERS

The new issuance is to redeem the $350 million of senior debt coming due in August 2016 and for general corporate purposes. The incremental new debt raises financial leverage from 18.4% at year-end 2015 to 18.7%, which is below any negative rating triggers for financial leverage. The newly issued 10-year notes rank pari passu with the issuer's other senior unsecured obligations.

Fitch recently a press release on Feb. 16, 2016 affirming all of CNA's ratings. Please refer to that press release, available at www.fitchratings.com, for further rationale on CNA's ratings.

RATING SENSITIVITIES

Key rating triggers that could lead to an upgrade include:

--Strong operating performance with an ROE of 9% and a sustained GAAP calendar year combined ratio for the ongoing property/casualty business of approximately 100% or better;

--Improved view of reserve adequacy;

--Achieving a Prism score of 'Very Strong' or higher for several consecutive years and debt-to-total capital maintained below 25%.

Key rating triggers that could lead to a downgrade include:

--Decline in ROE below 6% and sustained combined ratio of 105% or worse;

--Adverse GAAP reserve development in excess of 5% of prior year's equity;

--Achieving a Prism score of 'Adequate' or below or debt-to-total capital maintained above 30%.

FULL LIST OF RATING ACTIONS

Fitch has assigned a 'BBB' rating to the following:

CNA Financial Corporation

--$400 million 4.5% due Mar. 1, 2026.

Fitch has taken no rating action on the following ratings:

CNA Financial Corporation

--IDR at 'BBB+';

--$350 million 6.5% due Aug. 15, 2016 'BBB';

--$150 million 6.95% due Jan. 15, 2018 'BBB';

--$350 million 7.35% due Nov. 15, 2019 'BBB';

--$500 million 5.875% due Aug. 15, 2020 'BBB';

--$400 million 5.75% due Aug. 15, 2021 'BBB';

--$243 million 7.25% due Nov. 15, 2023 'BBB';

--$550 million 3.95% due May 15, 2024 'BBB'.

--Outlook Stable.

Continental Casualty Company Group

Members:

American Casualty Company of Reading, Pennsylvania

Columbia Casualty Company

Continental Casualty Company

The Continental Insurance Company

The Continental Insurance Company of New Jersey

National Fire Insurance Company of Hartford

Surety Bonding Company of America

Transportation Insurance Company

Universal Surety of America

Valley Forge Insurance Company

Western Surety Company

--Insurer Financial Strength 'A';

--Outlook Stable.

Additional information is available on www.fitchratings.com

Applicable Criteria

Insurance Rating Methodology (pub. 16 Sep 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=871172

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999883

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999883

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160223006967/en/

Fitch Ratings, Inc.
Primary Analyst
Gerald B. Glombicki, CPA
Director
+1-312-606-2354
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Jeremy R. Graczyk
Analyst
+1-312-368-3208
or
Committee Chairperson
Mark Rouck, CFA, CPA
Senior Director
+1-312-368-2085
or
Media Relations
Hannah James, + 1-646-582-4947
[email protected]

Source: Fitch Ratings

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