A.M. Best Assigns Rating to UnumProvident's New Senior Debt; Affirms Existing Debt Ratings.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--June 14, 2002 A.M. Best Co. has assigned an "a-" rating to UnumProvident Corporation's (NYSE NYSE See: New York Stock Exchange : UNM UNM University of New Mexico UNM UnumProvident Corporation UNM Under New Management UNM United Nations Medal UNM User Name Mapping ), Chattanooga, Tennessee “Chattanooga” redirects here. For other uses, see Chattanooga (disambiguation). Chattanooga is the fourth-largest city in Tennessee (after Memphis, Nashville, and Knoxville), and the seat of Hamilton CountyGR6 , new $250 million 7.375% senior unsecured notes, due June 2032, and an "a-" senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. rating on the company's upcoming issue of $150 million in public income notes (PINES). The 30-year PINES will be issued on the NYSE and possess an early dated call feature (after five years) and a coupon rate Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. of approximately 7.25%. This is the second draw down of a $1 billion shelf registration the company filed in the fourth quarter of 2000. The ratings on UnumProvident's existing debt have been affirmed. The A (Excellent) group financial strength rating on UnumProvident's life/health insurance subsidiaries is unaffected. The outlook for all UnumProvident ratings is stable. Proceeds from the offering are being used to replace existing commercial paper and maturing medium-term notes Medium-term note (MTN) A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc. . This offering has no impact on the total amount of UnumProvident debt. The company's total debt (including preferreds) to capital ratio at March 31, 2002, stands slightly below 30%, which is in the acceptable range for the rating. Over time, A.M. Best expects UnumProvident's overall financial leverage to gradually be reduced. Prospective fixed charge coverage is expected to be in the range of 5-7 times. UnumProvident continues to maintain a leadership position in the individual and group disability income market as well as a significant presence in the group life, payroll deduction and long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. fields. Additionally, the company continues to have a number of advantages over competitors in the disability field, including the vast amount of claims data it processes -- being the industry leader -- and its effective return-to-work programs. However, A.M. Best believes a sluggish economy Sluggish Economy A state in the economy in which the growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts. will continue to impact UnumProvident's overall profitability, particularly with regards to claims incidence and resolution of its disability income business as well as its large fixed income portfolio, which is heavily weighted in corporate issues. UnumProvident Corp., is a holding company whose subsidiaries offer a comprehensive, integrated portfolio of products and services backed by industry-leading, return-to-work resources and disability expertise. UnumProvident is the world leader in protecting income and lifestyles through its comprehensive offering of group, individual and voluntary benefits products and services. As of March 31, 2002, it reported consolidated assets of $42.4 billion and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $5.7 billion. For a list of A.M. Best's current debt ratings, please visit 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. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion