Fitch Rates Travelers' Planned Issuance 'A(EXP)'

Fitch Ratings has assigned an 'A(EXP)' rating to The Travelers Companies, Inc. (NYSE: TRV) planned $500 million issuance of 30 year senior unsecured notes. The ratings are equivalent to Fitch's ratings on TRV's currently outstanding senior notes.

Fitch anticipates TRV using the proceeds from the planned issuance to repay $400 million in outstanding senior notes maturing in June 2016.

KEY RATING DRIVERS

The 'A(EXP)' rating reflects expectations that TRV's capitalization and interest coverage will not materially change from levels reported at March 31, 2016. Specifically, Fitch expects that the financial leverage ratio will be approximately 22% and Operating EBIT will cover fixed charges by approximately 11x.

TRV's ratings are supported by a strong competitive position as a top six U.S. property/casualty insurer, an adequate reserve position, prudent capital management, a history of solid earnings and financial flexibility.

RATING SENSITIVITIES

Key rating triggers that could lead to a downgrade include:

--Capitalization at the underwriting subsidiaries that is inconsistent with standards for the current rating category such as consolidated statutory net leverage greater than 4.5x, a long term increase in the financial leverage ratio to greater than 25% or a deterioration in the Prism score to below the "Very Strong" category.

--A GAAP fixed charge coverage ratio less than 8x on a run rate basis.

--A sustained period of net losses or catastrophe losses out of proportion with the company's market share.

Key rating triggers that could lead to an upgrade include:

--Improvement in TRV's capitalization measured by a Prism score of "Extremely Strong". However, given publicly traded companies' sensitivity around managing capital, this level of overcapitalization is unlikely.

--Sustained underwriting performance across business lines that is clearly better than the industry and similarly-rated peers.

Fitch has assigned the following rating:

The Travelers Companies, Inc.

--Senior notes due 2046 rated 'A(EXP)'.

Relevant Rating Committee Date: Dec. 1, 2015.

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

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003970

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.

Contacts:

Fitch Ratings
Primary Analyst
Douglas M. Pawlowski, CFA
Senior Director
+1-312-368-2054
Fitch Ratings, Inc.
70 West Madison St.
Chicago, IL 60602
or
Secondary Analyst
Gerry Glombicki, CPA
Director
+1-312-606-2354
or
Committee Chairperson
Jeff A. Mohrenweiser
Senior Director
+1-312-368-3182
or
Media Relations:
Hannah James, +1 646-582-4947
hannah.james@fitchratings.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.