AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of the life/health insurance subsidiaries of Prudential Financial, Inc. (PFI) (Newark, NJ) [NYSE: PRU], collectively referred to as Prudential. Concurrently, AM Best has affirmed the Long-Term ICR of “a-” (Excellent) of PFI and all Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of the group. The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the companies and ratings.)

The ratings reflect Prudential’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, very favorable business profile and very strong enterprise risk management.

Prudential’s very strong balance sheet assessment is supported by its investment portfolio and strategic allocations to higher performing, high quality assets with lower exposure to low quality structured securities. Absolute capital growth of Prudential’s insurance subsidiaries is reflective of the strong operating gains in its core insurance operations. The U.S. insurance companies have adequate liquidity metrics and favorable financial flexibility options through its access to the capital markets and membership in the Federal Home Loan Bank.

AM Best also has a favorable view of Prudential’s operating performance profile, as revenues are diversified across its insurance premiums, mortality and expense fees and administration fees from insurance and investment products. The group’s net investment income is a steady driver of earnings, with growth of approximately 5% of general account invested assets over the past five years for the current rated statutory entities. AM Best also recognizes the geographic diversification of earnings; non-U.S. business contributes approximately 43% of GAAP earnings for PFI.

Prudential’s vast and diversified product offerings for life, retirement strategies and asset management services is the foundation of its very favorable business profile. The pension risk transfer business has also changed its risk profile over the past decade and the large deals and successful practice has positioned Prudential to be among the top market participants. AM Best also acknowledges the strategies Prudential employs to transition to less market-sensitive variable annuity and universal life products, which has resulted in lowering the company’s traditional variable annuities account values by approximately 40% and is projected to reduce their guaranteed universal life reserves by approximately 33% following the closing of its deal with Somerset Reinsurance Ltd. Additionally, Prudential has invested in technology to support new and expanding sales and administration capabilities to support its large and expansive captive field sales forces. The company has done buildouts or acquired its advisor and client value capabilities with varied levels of success.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for the following subsidiaries of Prudential Financial, Inc.:

• The Prudential Insurance Company of America
• Pruco Life Insurance Company
• Pruco Life Insurance Company of New Jersey

The following Short-Term IRs have been affirmed:

Prudential Financial, Inc.—

-- AMB-1 (Outstanding) on $3 billion commercial paper program

Prudential Funding, LLC—

-- AMB-1 (Outstanding) on $7 billion commercial paper program

PRICOA Short-Term Funding, LLC—

-- AMB-1 (Outstanding) on $3 billion Funding Agreement Backed Commercial Paper

The following Long-Term IRs have been affirmed with stable outlooks:

Prudential Financial, Inc.—

-- “a-” (Excellent) on JPY 23.0 billion 2.62% senior unsecured notes, due 2026

-- “a-” (Excellent) on JPY 17.5 billion 2.76% senior unsecured notes, due 2026

-- “a-” (Excellent) on JPY 9 billion 3.099% senior unsecured notes, due 2027

-- “a-” (Excellent) on $500 million 5.75% senior unsecured notes, due 2033

-- “a-” (Excellent) on $350 million 6.625% senior unsecured notes, due 2040

-- “a-” (Excellent) on $325 million 5.80% senior unsecured notes, due 2041

-- “a-” (Excellent) on $895.8 million 3.905% senior unsecured notes, due 2047

-- “a-” (Excellent) on $1.039 billion 3.935% senior unsecured notes, due 2049

-- “bbb” (Good) on $500 million 5.20% fixed to floating junior subordinated notes, due 2044

-- “bbb” (Good) on $1.0 billion 5.375% fixed to floating junior subordinated notes, due 2045

-- “bbb” (Good) on $750 million 4.5% fixed to floating junior subordinated notes, due 2047

-- “bbb” (Good) on $1.0 billion 5.70% junior subordinated notes, due 2048

-- “bbb” (Good) on $800 million 3.70% junior subordinated notes, due 2050

-- “bbb” (Good) on $1.0 billion 5.125% junior subordinated notes, due 2052

-- “bbb” (Good) on $1.2 billion 6.0% junior subordinated notes, due 2052

-- “bbb” (Good) on $500 million 6.75% junior subordinated notes, due 2053

-- “bbb” (Good) on $500 million 5.625% junior subordinated notes, due 2058

-- “bbb” (Good) on $500 million 4.125% junior subordinated notes, due 2060

-- “bbb” (Good) on $300 million 5.95% junior subordinated notes, due 2062

Prudential Financial, Inc.— “a-” (Excellent) program rating

-- “a-” (Excellent) on all outstanding notes issued under the program

The Prudential Insurance Company of America—

-- “a” (Excellent) on $350 million 8.30% surplus notes, due 2025

PRICOA Global Funding I— “aa-” (Superior) program rating

-- “aa-” (Superior) on all outstanding notes issued under the program

Prudential Funding, LLC— “a+” (Excellent) program rating

The following indicative Long-Term IRs have been affirmed with stable outlooks:

Prudential Financial, Inc.—

-- “a-” (Excellent) on senior unsecured debt

-- “bbb+” (Good) on subordinated debt

-- “bbb” (Good) on preferred stock

Prudential Financial Capital Trust II and III—

-- “bbb” (Good) on preferred securities

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, Best’s Performance Assessments, Best’s Preliminary Credit Assessments 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. For more information, visit www.ambest.com.

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