Best Assigns ‘bbb’ Debt Ratings to Markel Notes

August 20, 2004

A.M. Best Co. announced that it has assigned a debt rating of “bbb” to Markel Corporation’s $200 million 7.35 percent senior unsecured notes, due in 2034.

“The proceeds from this offering will be used to repay $110 million of indebtedness at the company’s revolving credit facility with the remaining proceeds used for general corporate purposes,” Best noted. It also affirmed the “bbb” and “bb+” debt ratings on Markel’s existing senior unsecured notes and preferred securities, respectively. The outlook for all the ratings remains stable.

“Following this offering, Markel Corporation’s financial leverage (total debt plus preferred securities to capital) increased from 35.5 percent to 37.4 percent,” said Best. The rating agency indicated that, although financial leverage remains within its accepted range, “this level is nearing the high-end of expectations.”

Best also said it had taken into consideration “Markel’s favorable second quarter earnings announcement, near-term earnings prospects and future capital formation. As of June 30, 2004, Markel’s earnings to interest coverage of 6.8 times was comfortably supportive.”

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