AMSTERDAM–(BUSINESS WIRE)–AM Best has assigned an indicative Long-Term Issue Credit Rating of “a-” to the forthcoming EUR 750 million fixed rate senior dated subordinated notes due 2030 to be issued by Assicurazioni Generali S.p.A. (Generali) (Italy). The outlook assigned to this Credit Rating (rating) is stable, which is in line with the outlook of Generali’s Long-Term Issuer Credit Rating (Long-Term ICR).

Generali intends to use the proceeds of this issue to partially finance the buyback of up to EUR 1 billion of outstanding subordinated debt callable in 2022, in line with its strategy to reduce total debt by EUR 1.5 million to EUR 2.0 billion by year-end 2021, and reduce ongoing finance costs.

The notes are designated by Generali as a “green bond.” The proceeds will be invested in a number of asset classes with positive environmental impact including green buildings, renewable energy and sustainable water management.

AM Best expects Generali’s financial leverage ratio to decrease slightly following the buyback and issue of these notes. AM Best will continue to monitor Generali’s interest coverage and leverage ratios.

The rating of the senior dated subordinated notes is two notches below Generali’s Long-Term ICR, reflecting the fact that they are subordinated to Generali’s senior creditors, but senior to any of the company’s deeply and more deeply subordinated obligations. The notes will rank pari passu with Generali’s more senior dated subordinated notes for so long as certain legacy Tier 2 notes being subordinated obligations being issued as at 4 June 2019, which are expressed to be senior subordinated obligations with a specified maturity date if and for so long as their terms and conditions do not permit the issuance of subordinated obligations ranking senior thereto, are outstanding. The senior dated subordinated notes would rank junior to the more senior dated subordinated ones thereafter, which could result in an increase of the notching gap between the rating of the senior dated subordinated notes and Generali’s Long-Term ICR.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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