Moody's changes Alleghany outlook to positive, rates notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to Alleghany Corp.’s $300 million of senior notes due 2044 and revised the outlook to positive from stable.

The note proceeds will be used to redeem a like amount of the 5.75% senior notes due December 2015 of subsidiary Transatlantic Holdings, Inc. The outlook for Transatlantic Holdings remains stable.

The agency said the outlook change reflects the current and anticipated reduced structural subordination of Alleghany's debt relative to debt issued by Transatlantic Holdings. Although the present capital transaction will leave consolidated adjusted financial leverage fundamentally unchanged, it will shift the preponderance of consolidated debt to Alleghany from Transatlantic Holdings, consistent with the company's plan to shift its debt capital management for the group to the ultimate parent.

Alleghany's Baa2 rating primarily reflects the underlying insurance financial strength of its principal operating subsidiaries as well as the parent company's manageable financial leverage and good internal liquidity, Moody’s said.

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