A.M. Best Assigns Indicative Debt Ratings to Horace Mann's Shelf Registration; Affirms Existing Debt and Financial Strength Ratings.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 19, 2003 A.M. Best Co. has assigned indicative ratings of "bbb-" to unsecured senior debt, "bb+" to 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". 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 Horace Mann Educators Corporation's (Springfield, IL) (NYSE NYSE See: New York Stock Exchange : HMN HMN Hemmings Motor News ) recently filed $300 million universal shelf offering. At the same time, A.M. Best has affirmed Horace Mann's existing debt and A- (Excellent) financial strength ratings for the property/casualty and life/health operations. The outlook for all ratings is stable. The shelf offering allows Horace Mann to periodically sell debt securities, common stock, preferred stock and other securities, with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to be used to reduce outstanding debt or for general corporate purposes. A.M. Best views favorably Horace Mann's strict expense management and strengthened underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. standards in the property/casualty operations. With respect to the life/health operations, A.M. Best views favorably its solid marketing niche in the educators' market place, consistently positive operating performance and the ongoing success in growing agent productivity. Further, the rating recognizes the establishment of its independent annuity field force. These strengths are partially offset by the aggressive underwriting leverage position maintained in the property/casualty operations and the decline in operating performance in recent years that was primarily influenced by prior year adverse loss reserve development. While the capital position of the property/casualty operations has declined, it is supportive of the Excellent rating level. The following indicative debt ratings have been assigned to the shelf registration: Horace Mann Educators Corporation-- -- "bbb-" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. -- "bb+" on subordinated debt -- "bb" on preferred stock The financial strength ratings of A- (Excellent) have been affirmed for the following property/casualty and life/health operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of the Horace Mann Insurance Group: -- Horace Mann Insurance Company -- Horace Mann Property & Casualty Insurance Company -- Teachers Insurance Company -- Horace Mann Lloyds -- Horace Mann Life Insurance Company The following debt ratings have been affirmed: Horace Mann Educators Corporation-- -- "bbb-" on $100 million 6.625% senior notes, due 2006 -- "bbb-" on $353.5 million 3% convertible notes, due 2032 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 www.ambest.com. |
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