A.M. Best Assigns Debt Ratings to The Allstate Corporation's $1 Billion of Senior Notes.

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "a-" to the $700 million, 7.45% 10-year senior notes and $300 million, 6.20% five-year senior notes issued on May 13, 2009 by The Allstate Corporation (Allcorp) (NYSE: ALL) (Northbrook, IL). The debt has been issued under a recently filed shelf registration effective May 8, 2009.

Additionally, A.M. Best has assigned indicative ratings of "a-" to senior unsecured debt, "bbb+" to subordinated debt, "bbb" to junior subordinated debt, "bbb" to trust preferred securities and "bbb" to preferred stock of Allcorp's shelf registration. The outlook for all ratings is stable.

The financial strength rating of A+ (Superior) and issuer credit ratings of "aa-"of Allstate Insurance Group (Allstate) (Northbrook, IL) and the existing debt and issuer credit ratings of Allcorp are unchanged.

This shelf registration replaces the previous shelf, which was effective May 18, 2006 and has an undesignated amount of securities. Under the terms of the shelf, Allcorp may issue an indeterminate number of debt securities, common stock, preferred stock, depositary shares, warrants, stock purchase contracts and stock purchase units. In addition, trust preferred securities can be issued through Allstate Financing III, IV, V and VI.

Proceeds from this latest offering will be used by Allcorp for general corporate purposes, which include funding the repayment of $750 million in senior notes at their scheduled maturity date of December 1, 2009. Following this transaction, Allcorp's total debt-to-adjusted capitalization will be approximately 28%, but it is projected to decrease to approximately 25% following the scheduled repayment of the $750 million of senior notes.

Allstate continues to maintain adequate risk-adjusted capitalization for its current ratings, despite significant realized and unrealized capital losses, dividend payments to Allcorp and modest operating earnings in 2008 and first quarter 2009, driven by sizeable catastrophe losses. The ratings and outlook also reflect A.M. Best's expectation that Allstate's underlying operating performance will continue to produce favorable results, thus allowing the group to replenish its risk-adjusted capital position over the near term.

Allstate continues to maintain a significant market presence and strong overall business profile as the second-largest personal lines writer, a distinct advantage contributing to the expectation that the group will continue to produce favorable operating results. Furthermore, Allstate maintains moderate underwriting leverage as well as additional liquidity at the holding company level in both Allcorp and affiliate, Kennett Capital, Inc.

For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.