A.M. Best Assigns Indicative Ratings to Ameriprise Financial's New Shelf Registration.OLDWICK, N.J. -- A.M. Best Co. has assigned indicative ratings of "a-" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. , "bbb+" 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". , "bbb+" on trust preferred securities and "bbb" on 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 Ameriprise Financial Ameriprise Financial, Inc. (NYSE: AMP) is a company offering financial advice and products. It is the successor to American Express Financial Advisors (AEFA), which was a subsidiary of the American Express Company. , Inc.'s (Ameriprise) (Minneapolis, MN) (NYSE NYSE See: New York Stock Exchange : AMP) recently filed shelf registration. The outlook for all ratings is negative. Ameriprise and its life/health subsidiaries' existing financial strength, issuer credit and debt ratings are unchanged. This shelf registration has an undesignated amount of securities, which can be issued in accordance with recently adopted Securities and Exchange Commission rules Securities and Exchange Commission Rules Rules enacted by the SEC to assist in the regulation of US financial markets. for seasoned issuers and replaces Ameriprise's $1.7 billion shelf registration, which had $200 million of capacity remaining. Under the terms of the shelf, Ameriprise may issue an indeterminate amount of senior debt securities, subordinated debt securities, preferred stock, depositary shares, common stock, warrants, stock purchase contracts and stock purchase contract units. In addition, trust preferred securities can be issued through Ameriprise Capital Trusts I, II, III and IV. The rating reflects the combined insurance, annuity, asset management and banking and brokerage products, primarily distributed through the Ameriprise branded financial advisor force, as well as the group's consistent operating performance and improved capitalization. The negative outlook recognizes A.M. Best's view that there are still inherent execution risks associated with re-branding the enterprise. This is evidenced by Ameriprise's reliance on its branded advisors for life insurance, annuity and domestic mutual fund cash sales sales made for ready, money, in distinction from those on which credit is given; stocks sold, to be delivered on the day of transaction. See also: Cash and this channel contributes approximately 53% of total cash sales. Earnings in 2005 declined from historical levels, although variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. net flows were positive. A.M. Best notes that interest coverage, although solid, has also dampened due to lower earnings and higher debt servicing costs as $1.5 billion of senior notes were issued in late 2005. For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit www.ambest.com/lh. 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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