A.M. Best Assigns Indicative Ratings to Nationwide Financial Services' Shelf Registration.OLDWICK, N.J. -- A.M. Best Co. has assigned indicative debt ratings of "a-" to senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. , "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". , "bbb" 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. and "bbb+" to trust preferred securities of Nationwide Financial Services, Inc.'s (NFS (Network File System) The file sharing protocol in a Unix network. This de facto Unix standard, which is widely known as a "distributed file system," was developed by Sun. See file sharing protocol and WebNFS. NFS - Network File System ) (Columbus, OH) (NYSE NYSE See: New York Stock Exchange : NFS) recently filed shelf registration. All ratings have a stable outlook. This 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 NFS' existing $1.5 billion shelf registration, which had $1.1 billion of capacity remaining. Under the terms of the shelf, NFS may issue an indeterminate number of senior debt securities, subordinated debt securities, preferred stock, depositary shares, common stock, warrants, stock purchase contracts and stock purchase units. In addition, trust preferred securities can be issued through Nationwide Financial Services Capital Trusts III and IV. The ratings recognize NFS' favorable business profile, which is characterized by balanced sources of revenue and earnings, strong and diversified distribution, sound overall earnings capabilities and a solid capital position. NFS enjoys a solid market position as a provider of annuities, life insurance and retirement plans for both retail and institutional markets. NFS' ratings also recognize the advances it has made in adopting an integrated risk management process, which provides an improved framework for managing the risks inherent in its various lines of business. NFS also benefits from the significant franchise value associated with being a 63%-owned subsidiary of Nationwide Mutual Insurance Company Nationwide Mutual Insurance Company & Affiliated Companies is a group of large U.S. insurance and financial services companies based in Columbus, Ohio. History Beginnings as Farm Bureau Mutual , a market leader in the property/casualty industry. Offsetting rating factors include the highly competitive markets faced by NFS in several of its core product lines. A.M. Best believes the group will continue to be challenged to reverse the recent trend of 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 outflows and recapture lost individual life market share. These markets are becoming increasingly commoditized, which will place further pressure on sales, persistency and spread margins. Also, given NFS' heavy reliance on equity-based products, future earnings will continue to be correlated to the performance of the equity markets. Additionally, NFS' level of intangibles to equity is somewhat high relative to similarly-rated peers. 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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