New York, November 15, 2012 -- Moody's Investors Service has assigned a Baa3(hyb) subordinated debt rating to Prudential Financial's ("Prudential"; NYSE:PRU, senior debt at Baa2/positive) $1.5 billion issuance of 30.5-year 5.625% fixed-to-floating rate debentures. The debenture is a drawdown from a shelf registration filed in March, 2012. Proceeds are expected to be used for general corporate purposes as well as the redemption of some of the company's outstanding retail medium-term notes. The outlook on the debt is positive.

RATINGS RATIONALE

According to Moody's Senior Vice President, Scott Robinson, "Prudential's debt issuance represents an opportunity to refinance some of its higher coupon retail medium-term notes, which are redeemable at par, with longer duration, lower cost, hybrid securities." As of October 31, 2012 the company had $1.1 billion of outstanding retail medium-term notes, which are redeemable at par, with a weighted average interest rate of 6.12% and a weighted average maturity of 16.7 years. The rating agency commented that the debentures are expected to receive partial equity credit according to Moody's hybrid methodology.

Moody's commented that Prudential's Baa2 senior unsecured debt rating and the A2 insurance financial strength (IFS) rating of its US life insurance operating companies are based primarily on the group's strong brand name and international business franchises, diversified core earnings base, and strong capital position. Prudential's International Insurance segment, which includes its Japanese insurance business, has become an important contributor to the overall earnings for the enterprise. During the first nine months of 2012, the segment accounted for approximately 53% of $3.9 billion of total pre-tax adjusted earnings (excluding the Corporate segment).

These credit strengths are tempered by still high levels of operating and financial debt, higher than average equity market sensitivity and a relatively complex capital structure. Sustained improvements in these areas would likely lead to a reassessment of the rating.

RATING DRIVERS

Rating Drivers -- U.S. insurance operating companies

Moody's noted that the following could result in an upgrade to the insurance operating companies' A2 IFS ratings: 1) GAAP net income resulting in returns on capital for the U.S. life insurance operations in the high single digits; 2) total leverage sustained below 40%; and 3) GAAP earnings coverage above 6 times.

Conversely, the following could result in changing the outlook back to stable: 1) investment losses of over $500 million are sustained or are deemed likely to occur over the next 12 months; 2) Total leverage is anticipated to remain above 40%; or 3) GAAP earnings coverage is not anticipated to be over 6 times.

Rating Drivers - Holding company

The rating agency said the following could result in an upgrade to Prudential's ratings: 1) increase in cash flow diversity available to the holding company, with ordinary dividends from the company's non-U.S. life insurance subsidiaries accounting for a significantly higher percentage of holding company cash flows; and 2) upgrade of PICA or improvement in the credit profile of the Japanese operations.

Conversely, the following could result in changing Prudential's outlook back to stable: 1) Deterioration in credit profile of Prudential Insurance Company of America or the Japanese operations; 2) total leverage is anticipated to remain above 40%; or 3) GAAP earnings coverage is not anticipated to be over 6 times.

Prudential Financial, Inc. is an insurance and investment management organization headquartered in Newark, New Jersey. As of September 30, 2012, the company had total assets of $672 billion and total shareholders' equity of $39 billion.

Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations.

The principal methodology used in this rating was Moody's Global Rating Methodology for Life Insurers published in May 2010. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

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Scott Robinson Senior Vice President Financial Institutions Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Robert Riegel MD - Insurance Financial Institutions Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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