Fitch Assigns ‘A’ to Travelers P&C Corp.’s Conv Debt Issue

March 15, 2002

Fitch has assigned an ‘A’ rating to Travelers Property Casualty Corp.’s (TAP) proposed issuance of $850 million convertible junior subordinated notes due 2032. The Rating Outlook is Stable.

As part of its reorganization plan, Travelers Property Casualty Corp. recently changed its name from Travelers Insurance Group Inc. Additionally, its downstream holding company, which had been named Travelers Property Casualty Corp., changed its name to Travelers Insurance Group Holdings Inc.

The rating reflects TAP’s consistently strong profitability, excellent market positioning and business diversity as the nation’s third largest commercial insurer and second largest independent agency-based personal lines writer. Furthermore, Travelers P&C maintains strong capitalization on both an operating and financial leverage basis and relatively conservative reserving and catastrophe management philosophies. Pro forma debt and preferred stock to capital is expected to increase moderately and remain within Fitch’s guidelines for a two-notch differential between the insurer financial strength and senior debt ratings. Additionally, fixed charge coverage is expected to remain strong.

Hartford-based TAP reported assets of $57.8 billion and capital of $10.7 billion at year-end 2001. The company’s parent—Citigroup recently announced its intent to spin-off TAP, initially through an IPO of more than 20 percent and then through the distribution of TAP’s common stock to Citigroup shareholders by year-end 2002.

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