A.M. Best Affirms Various Ratings of Delphi Financial Group.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings of A- (Excellent) of Delphi Financial Group, Inc.'s (Delphi Financial) (NYSE NYSE See: New York Stock Exchange : DFG DFG Deutsche Forschungsgemeinschaft (German Research Council) DFG Department of Fish and Game DFG District Factor Group DFG Data Flow Graph DFG Difference Frequency Generation DFG Diode Function Generator DFG Dog Faced Gremlin ) (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY) core life insurance subsidiaries, Reliance Standard Life Insurance Company (Reliance Standard) (Chicago, IL) and First Reliance Standard Life Insurance Company (New York, NY). Concurrently, A.M. Best has affirmed the issuer credit rating of "bbb-" of Delphi Financial. A.M. Best has also affirmed the debt rating of "bbb-" on $143.8 million 8% senior unsecured notes, due 2033 of Delphi Financial and the debt rating of "bb+" on $100 million 9.31% capital securities, due 2027 issued by Delphi Funding L.L.C. The outlook for the ratings is positive. Reliance Standard continues to profitably grow its core group long-term disability and group life insurance business in a very competitive employee benefits market. The maintenance of the positive outlook reflects its favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. level of profitability over the last several years, established market position in its core small to mid-sized employee benefits market, strengthening capitalization and improved investment quality. While favorable cash flow at Reliance Standard has historically enabled a high level of dividends to provide support for the debt service of Delphi Financial, A.M. Best expects that the majority of future operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before will remain at the operating company operating company A business that engages in transactions with outsiders. to allow for further expansion of its business, as was the case over the past year. Delphi Financial has significantly reduced its leverage due to the reduction of debt and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and continues to demonstrate solid financial performance. Over the medium term, A.M. Best anticipates financial leverage and debt service coverage to remain under 25% and at least eight times, respectively. Partially offsetting these strengths is the general vulnerability of virtually all of Reliance Standard's core business lines to the economy and its exposure to various higher risk investments. A.M. Best believes the uncertainty in the economy, including the recent fluctuation in interest rates, can have a negative impact on Reliance Standard's profitability in its disability business, as well as the spreads on its asset accumulation segment. However, the group continues to maintain positive financial performance trends, despite recent economic conditions. The financial strength ratings of A- (Excellent) have been affirmed with a positive outlook for the following core life insurance subsidiaries of Delphi Financial Group, Inc.: --Reliance Standard Life Insurance Company --First Reliance Standard Life Insurance Company The following debt ratings have been affirmed with a positive outlook: Delphi Financial Group, Inc. -- --"bbb-" on $143.8 million 8% senior unsecured notes, due 2033 Delphi Funding LLC-- --"bb+" on $100 million 9.31% capital securities, due 2027 The following indicative ratings have been affirmed for debt securities available under the existing shelf registration: Delphi Financial Group, Inc. -- --"bbb-" on senior debt -- "bb+" on subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". --"bb+" on preferred securities --"bb" on preferred stock For current Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , independent data and analysis on more than 1,050 health companies and more than 130 HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, industry composites, please visit http://www.ambest.com/health/. For a list of Best's Debt Ratings, please visit http://www.ambest.com/debtratings/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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