Jul 27, 2012, 3:38pm

A.M. Best Co. is requesting comments from market participants in the insurance industry and other interested parties on the draft criteria report, “Equity Credit for Hybrid Securities” (updates version dated June 22, 2011).

Proposed edits to the publication include a new section on subordinated debt. The issuance of subordinated debt is prevalent in certain regions outside of the United States, in part because it supplements capital without diluting existing shareholders’ control and allows the issuer to make tax-deductible interest payments. In addition, subordinated debt often has equity-like characteristics such as a long or perpetual maturity and deferrable coupon payments.

These updates are part of A.M. Best’s continual review of its rating methodology and are not considered material or expected to affect ratings.

Visit www.ambest.com/ratings/methodology to download a PDF copy of each report.

Written comments should be submitted by email to rating.methodology@ambest.com no later than August 26, 2012.

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