A.M. Best Assigns Rating to Nationwide Financial's Junior Subordinated Notes.OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bbb" to the $400 million 6.75% fixed-to-floating rate junior subordinated notes issued by Nationwide Financial Services, Inc. (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]. The notes have a scheduled maturity of 30 years and a final maturity date of 2067. The rating assigned to the notes reflects their subordinated status to senior, subordinated and junior 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". of NFS; the replacement capital covenant; and a 10-year optional interest deferral feature. 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). will be used to redeem its $300 million 8% senior unsecured notes due 2027 on June 4, 2007 and for general corporate purposes. Incorporating equity credit for the new hybrids, NFS' pro forma financial leverage will remain below 20% with solid interest coverage at seven times. NFS' ratings reflect its established position in multiple product lines, extensive brand recognition, sound capital position and broad distribution platform. The ratings also recognize NFS' diversified business mix, which has consistently generated solid GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). operating revenues and pre-tax operating earnings. Offsetting these strengths are NFS' continuing struggles with negative net flows within its variable and fixed annuity lines; above average exposure to relatively illiquid Illiquid An asset or security that cannot be converted into cash very quickly (or near prevailing market prices). Notes: A house is a good example of an illiquid asset. See also: Cash, Liquidity Illiquid In the context of finance. asset classes such as commercial mortgages, private placement bonds and mortgage-backed securities; and recent downward trend in statutory pre-tax net operating gains. NFS is roughly 63% owned by 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 , one of the largest multi-line insurance organizations in the U.S. 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. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com. |
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