A.M. Best Europe – Rating Services Limited has assigned a debt rating of “a” to the EUR 500 million subordinated fixed to floating rate bonds recently issued by Hannover Finance (Luxembourg) S.A. (Luxembourg) and guaranteed by Hannover Rueckversicherung Aktiengesellschaft (Hannover Re) (Hannover, Germany). The outlook for this rating is stable.

The bonds have been offered in a denomination of EUR 50,000 each and in the aggregate principle amount of EUR 500 million. The proceeds from the debt offering will be used for general business purposes. The debt matures September 2040 and provides the issuer with the option of redemption after ten years. Hannover Re’s leverage and interest coverage remain within tolerance for the company’s current rating.

The principal methodology used in determining these ratings is http://www.ambest.com/ratings/methodology/bcrm.pdf, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “A.M. Best’s Ratings & the Treatment of Debt” and “Equity Credit for Hybrid Securities”. Methodologies can be found at http://www.ambest.com/ratings/methodology.