A.M. Best Assigns Rating to Infinity Property and Casualty's Senior Debt Offering.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--July 17, 2003 A.M. Best Co. has assigned a rating of "bbb" to Infinity Property and Casualty Corporation's (Birmingham, AL) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : IPCC See IMS Forum. ) $200 million senior secured term loan facility. The rating outlook is stable. The financial strength rating of A (Excellent) of Infinity's insurance subsidiaries remains unaffected by this transaction. A.M. Best expects proceeds from the senior debt issuance to be used primarily to fund insurance operations to repay a $55 million note payable to American Financial Group, Inc. (Cincinnati) (NYSE NYSE See: New York Stock Exchange :AFG AFG Afghanistan (international vehicle registration) AFG American Financial Group AFG Assistance to Firefighters Grant AFG Arbeitsförderungsgesetz (German: Labor Advancement Law) AFG Accreditation for Growth ) and for general corporate purposes. Infinity's financial leverage (debt to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. ) will be approximately 30%, which is manageable and within the range that A.M. Best anticipated. In addition, A.M. Best expects Infinity's solid fixed charge coverage ratios of five to six times to be derived from expected favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. earnings. The rating reflects Infinity's excellent capitalization of the insurance operating entities and the historically favorable operating performance of the book of business. The rating also recognizes the group's strong non-standard automobile market presence as one of the top non-standard auto insurance groups in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , with direct premiums written of approximately $905 million. Somewhat offsetting these positive factors are the potential earnings fluctuations going forward due to localized market conditions and fraud activity prevalent in some key markets. However, Infinity has pursued aggressive premium rate increases and will benefit from recent price firming throughout the non-standard auto market. The following debt rating has been assigned with a stable outlook: Infinity Property and Casualty Corporation-- -- "bbb" on $200 million senior secured term loan facility 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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