S&P: Liberty unchanged

Standard & Poor's said that the counterparty credit rating on Liberty Mutual Group Inc. (A-/stable/A-2) is not affected by the company's tender offer for any or all of its outstanding $1.25 billion of 10.75% subordinated notes due 2058.

This transaction does not affect the ratings because of the expectation that Liberty will keep its other hybrid issues outstanding in the intermediate term, S&P said.

The tender offer slightly increases Liberty's prospective financial flexibility given the prospective lower interest expense, which will improve interest coverage, the agency said.

The rating reflects Liberty's strong position in the U.S. property/casualty insurance market as well as its strong and well-diversified business mix by product and geographic region, S&P said.

The ratings are constrained by below-industry-average historical underwriting and operating profitability, its weak underwriting results in commercial lines, its lower capital cushion relative to peers and its limited financial flexibility, the agency said.

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