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A.M. Best Assigns Debt Rating to Fairfax Financial Holdings Limited's Forthcoming Senior Notes

Posted on 14 Aug 2009

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On Friday August 14, 2009, 9:35 am EDT

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has assigned a debt rating of “bbb” to the forthcoming CAD 400 million (USD 368 million) 7.5% senior unsecured fixed rate notes due 2019 to be issued by Fairfax Financial Holdings Limited (Fairfax) (Toronto, Canada) [NYSE: FFH; TSE: FFH]. The outlook for the rating is stable.

The proceeds will be utilized to augment Fairfax’s cash position, increase short-term investments and marketable securities at the holding company, retire outstanding debt and other corporate obligations and for general corporate purposes.

Fairfax’s pro-forma unadjusted debt-to-total capital ratio is expected to increase modestly to 26.8% following the transaction, compared to 23.7% at June 30, 2009 (U.S. GAAP). This calculation includes the debt of Odyssey Re Holdings Corp., a majority-owned public company capable of servicing its debt. The financial leverage and coverage ratios remain well within A.M. Best’s guidelines for its debt ratings.

A.M. Best notes that cash, short-term investments and marketable securities held at the holding company level totaled $880.1 million at June 30, 2009, affording the company additional financial flexibility.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at