A.M. Best Assigns Rating to Great American Financial Resources' New Debt Securities.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 16, 2004 A.M. Best Co. has assigned a debt rating of "bbb" to the $75 million 30-year senior unsecured notes to be issued by AAG AAG Association of American Geographers (Washington, DC) AAG Assistant Attorney General AAG Asociación Argentina de Golf AAG Anti-Aircraft Gun AAG Assistant Adjutant General AAG Australian Association of Gerontology Holding Company, Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Great American Financial Resources, Inc. (GAFRI GAFRI Great American Financial Resources, Inc. ) (NYSE NYSE See: New York Stock Exchange :GFR GFR - Grim File Reaper ) (Cincinnati, OH). The notes are a drawdown Drawdown The peak to trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage between the peak to the trough. Notes: of the $250 million shelf registration previously filed by GAFRI. Additionally, A.M. Best has affirmed the ratings on existing debt guaranteed by GAFRI and indicative ratings on the aforementioned shelf. The financial strength rating of A (Excellent) of the GAFRI core life insurance subsidiaries is unaffected. All ratings have a stable outlook. The 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). from this offering will be used to redeem the 9.25% preferred securities issued by American Annuity Group Capital Trust I, a wholly-owned subsidiary trust of the company, in November 1996. For the current rating level, A.M. Best notes that overall financial leverage (including trust preferreds as debt) remains high for GAFRI, while interest coverage is adequate. The replacement of the higher rate preferred securities will improve GAFRI's interest expense and coverage. GAFRI has committed to maintain financial leverage at or below its current level of 31%. The ratings reflect the group's solid operating performance, favorable liquidity position, adequate risk-adjusted capitalization and multiple distribution sources. Its established presence in the individual tax-deferred annuity tax-deferred annuity See tax-sheltered annuity (TSA). market, particularly teachers in the primary and secondary grade levels in the public education market, has resulted in a stable liability structure evidenced by strong surrender charge protection. Offsetting factors include the group's concentration in individual fixed annuities--a highly competitive line vulnerable to changes in interest rates. While GAFRI has attempted to expand its operations beyond the annuity market, it has had limited success in growing its life insurance line, which continues to produce operating losses. In addition, its supplemental health business is subject to regulatory and market related concerns, which impact retention and profitability. The following debt rating has been assigned: AAG Holding Company, Inc. (guaranteed by Great American Financial Resources, Inc.) -- -- "bbb" on $75 million 30-year senior unsecured notes, due 2034 For a list of A.M. Best's current debt ratings, please visit: http://www.ambest.com/ratings/debtrating/companies.html. 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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