Moody's may upgrade American Financial

Moody's Investors Service said it placed the Baa3 senior debt ratings of American Financial Group, Inc. and its subsidiary, Great American Financial Resources, Inc., on review for possible upgrade following the completion of the merger between the two.

The agency said the review will focus on the organizational restructuring taking place as part of the completion of the merger, as well as the respective contributions of earnings and dividend capacity from the life and property and casualty operations to the ultimate holding company.

Factors that could prompt a ratings upgrade include financial leverage consistently below 28%, adjusted operating leverage below 5x with strong risk adjusted capital and pre-tax interest coverage consistently above 6x, Moody's said.

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