A.M. Best Assigns Indicative Ratings to AmerUs Group's Shelf Registration.OLDWICK, N.J. -- A.M. Best Co. has assigned indicative ratings of "bbb" to senior debt, "bbb-" 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 trust preferred 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. of the AmerUs Group Co.'s (AmerUs) (Des Moines, IA) (NYSE NYSE See: New York Stock Exchange :AMH AMH Abington Memorial Hospital (Abington, PA) AMH Anti-Müllerian Hormone AMH Australian Medicines Handbook AMH Automated Material Handling AMH Aviation Structural Mechanic (Hydraulics) US Navy Rating ) $1.5 billion mixed shelf offering that was recently filed with the Securities and Exchange Commission. A.M. Best expects future proceeds to be used for general corporate purposes, including working capital, capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , subsidiaries, acquisitions, and debt refinancing while affording AmerUs additional financial flexibility. The existing issuer credit, debt and financial strength ratings of AmerUs and its subsidiaries remain unchanged. The outlooks on all ratings are stable. AmerUs' total debt-to-capital ratio as of March 31, 2005--including preferreds--was approximately 27%. A.M. Best expects AmerUs' debt-to-capital ratio to remain constant in the near term and trend downward over time. AmerUs' steady earnings continue to provide solid interest coverage, though it will likely decline slightly once shelf registration proceeds are utilized. AmerUs' ratings reflect its enhanced business profile in the protection and accumulation lines of business, driven primarily by growth of its fixed-indexed life and annuity products, as well as its improved statutory and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings, solid levels of risk-adjusted capitalization relative to insurance and investment risks and strong asset/liability management Asset/Liability Management A technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Also known as "surplus management. . Partially offsetting these positives are AmerUs' exposure to market conduct issues related to alleged improper annuity product and sales practices to the senior citizen marketplace, relatively high levels of below-investment grade bonds and intangible assets and increased interest rate risks due to continued growth in interest-sensitive product offerings. In noting AmerUs' growth in fixed-indexed life and annuities, A.M. Best acknowledges its prudent product design and customer profiles, effective hedging programs and active market conduct and compliance programs. However, A.M. Best remains cautious over the potential declines in the industry's future fixed-indexed sales and its impact on earnings given the increasing due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. demanded to comply with the prevailing heightened regulatory environment. 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. 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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