A.M. Best Assigns Ratings to Fairfax Financial Holdings Limited’s Senior Notes Offering

  A.M. Best Assigns Ratings to Fairfax Financial Holdings Limited’s Senior
  Notes Offering

Business Wire

OLDWICK, N.J. -- January 17, 2013

A.M. Best Co. has assigned a debt rating of “bbb” to the $250 million 5.84%
senior unsecured notes due 2022 of Fairfax Financial Holdings Limited
(Fairfax) (Toronto) [TSX: FFH]. The assigned outlook is stable. All existing
ratings for Fairfax and its subsidiaries are unchanged.

These notes represent a re-opening of the series, which Fairfax issued in
October 2012. The aggregate amount outstanding after giving effect to this
offering is $450 million. The senior notes will be issued under a prospectus
supplement to Fairfax’s short form base shelf dated December 10, 2012. The
majority of the proceeds will be used to buy back a portion of Fairfax’s
outstanding debt over the next 12 months, augment its cash position, increase
short-term investments and marketable securities and for other corporate
obligations.

At September 30, 2012, Fairfax’s adjusted debt-to-total capital ratio was
calculated at approximately 30%. In the mid-term, Fairfax’s financial leverage
and coverage ratios are expected to remain within A.M. Best’s guidelines for
its current ratings. These calculations include the debt of wholly owned
subsidiaries, which are capable of servicing their own debt. In addition,
Fairfax had cash and investments of approximately $1 billion at September 30,
2012.

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
visit www.ambest.com.

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contact:

A.M. Best Co.
Darian Ryan, CPA
Senior Financial Analyst
908-439-2200, ext. 5449
darian.ryan@ambest.com
or
Michael Lagomarsino, CFA
Assistant Vice President
908-439-2200, ext. 5810
michael.lagomarsino@ambest.com
or
Rachelle Morrow
Senior Manager, Public
908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
james.peavy@ambest.com