AM Best Comments on Fairfax Financial Holdings Limited’s Re-Opened Senior Unsecured Notes
- June 18, 2026 03:42 PM (EDT)
//BestWire// - AM Best has commented that the Long-Term Issue Credit Rating of “a-” (Excellent) on the CAD 400 million (USD 283 million) 4.40% senior unsecured notes due Feb. 27, 2036, originally issued on Feb. 24, 2026 by Fairfax Financial Holdings Limited (Fairfax) (Toronto, Canada) [TSX: FFH], remains unchanged despite the additional notes being added to the same series. Fairfax has announced that it has issued an additional CAD 300 million (USD 212 million) senior unsecured notes under that offering, increasing the total to CAD 700 million (USD 495 million).
The Long-Term Issuer Credit Rating of Fairfax, as well as the ratings of its operating subsidiaries and all other debt issuances, are unchanged. Fairfax’s adjusted debt-to-tangible capital, as measured by AM Best, increased marginally to 30.4% from 30.0% since Fairfax’ last debt issue, remaining within AM Best’s neutral assessment level under its Holding Company Financial Assessment. Equity credit for hybrid securities was applied to the debt leverage calculation and will be applied to the Best’s Capital Adequacy Ratio (BCAR), as the analysis is done at the consolidated level, and considers Fairfax as an insurance holding company down-streaming its resources to its operating companies.
Interest coverage measured by EBIT to interest expense plus preferred dividends is still expected to reach 6.6 times at year-end 2026, compared with 5.3 times at year-end 2025, as measured by AM Best, reflecting adequate interest coverage. Additionally, Fairfax benefits from ample liquidity and financial flexibility provided by its access to capital markets.
Over 70.0% of Fairfax’s $73.0 billion investment portfolio is allocated to cash & cash equivalents, short-term investments and bonds, with a total effective duration under 2.5 years at the end of 2025. Over 65% of Fairfax’ bonds portfolio is rated AA and AAA. Fairfax intends to use the net proceeds from the offering for general corporate purposes.
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 Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.