A.M. Best Assigns Debt Ratings to CNA's $1.5 Billion Shelf Offering.OLDWICK, N.J. -- A.M. Best Co. has assigned indicative debt ratings of "bbb" to senior unsecured, "bbb-"to subordinated and "bb+" to 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. to be issued under CNA Financial Corporation's (CNAF CNAF Caisse Nationale des Allocations Familiales (French: national family allowances fund) CNAF Commander, Naval Air Forces CNAF Canadian Native Arts Foundation CNAF Combined Name and Address File ) (NYSE NYSE See: New York Stock Exchange : CNA (Certified NetWare Administrator) See Novell certification. ) recently filed $1.5 billion shelf offering. The financial strength (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) and issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of CNA Insurance Companies (CNA) (both domiciled in Chicago, IL) and CNAF's existing debt ratings remain unchanged. All ratings have a negative outlook. The shelf offering allows CNA to periodically sell debt securities, common stock, preferred stock, debt and equity warrants, depositary shares, purchase contracts and stock purchase units with net proceeds to be utilized for general corporate purposes including the repayment of existing debt. CNA's FSRs and ICRs reflect its strong risk-adjusted capitalization, improved underwriting fundamentals and good business position as a top writer within the commercial lines segment of the U.S. property/casualty industry. In 2004 and through the first six months of 2005, CNA's core property/casualty operations demonstrated good overall underwriting results with combined ratios below 100 (excluding catastrophe losses). Furthermore, as of June 30, 2005, CNAF's debt-to-total capital is below 20%, and Earnings Before Interest and Taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) interest coverage levels returned to positive levels. Cash coverage of holding company obligations remains strong. Somewhat offsetting these strengths are CNA's unsatisfactory operating performance in aggregate prior to 2004 and the operational and financial risks of further potential reserve development related to core property/casualty, non-core run-off and asbestos and environmental (A&E) loss reserves. Although A.M. Best is encouraged by CNA's operating progress, a removal of the negative outlook is contingent upon the company demonstrating continued operating profitability, liquidity and reserve stability that is commensurate with other A (Excellent)-rated carriers. For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies and A.M. Best groups, please visit http://www.ambest.com/pc. 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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