A.M. Best Rates Pacific LifeCorp's Senior Notes.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 29, 2003 A.M. Best Co. has assigned an "a+" rating to the $600 million 6.60% 30-year senior unsecured notes issued by Pacific LifeCorp, an intermediate stock holding company in the Pacific Mutual Holding Company structure. Concurrently, the "aa-" rating on the group's existing surplus notes has been affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. . The financial strength rating on Pacific LifeCorp's insurance affiliates is unaffected. The group's long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and financial strength ratings have a negative outlook. Pacific LifeCorp owns 100% of Pacific Life Insurance Company (Pacific Life) (Newport, CA) and its 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. , Pacific Life & Annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. Company. The financial strength rating for both companies is A++ (Superior). The proceeds of the senior notes issue were principally used to make a capital contribution to Pacific Life, with the remaining proceeds used to repay inter-company debt and for general corporate purposes. The new debt issue increased the organization's overall financial leverage to approximately 15% on a proforma basis as of June 30, 2003. However, the company's financial leverage and its projected fixed charge coverage are still within A.M. Best's expectations for the assigned ratings. The ratings reflect Pacific Life's superior risk-adjusted capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , strong liquidity, prudent financial management, as well as its prominent position in the upper-income markets for individual life insurance and annuities. Pacific Life has also leveraged its expertise in investment management to establish a leading position in the institutional products arena by capitalizing on new market opportunities in the structured settlement, structured finance and funding agreement Funding Agreement Illiquid insurance contracts that provide guaranteed principal repayment and interest payments for a predetermined period of time. Notes: Funding agreements are marketed to mutual fund companies and municipal reinvestments. segments. Through its diverse operations, Pacific Life has achieved revenue growth that exceeds industry averages and generated strong operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . Pacific Life's strengths are partially offset by its weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. profitability and substantial realized and unrealized investment losses, which have impacted capital accumulation Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. Capital can be generally defined as assets invested for profit. . Additionally, A.M. Best notes the company's exposure to both equity market volatility and interest rate risk in its various life and annuity businesses, as evidenced by declines in asset values, write-offs of deferred acquisition costs, reserve increases related to guaranteed products and tighter margins on interest spread-based business. The following debt rating has been assigned: Pacific LifeCorp-- -- "a+" rating on $600 million 6.60% senior unsecured notes, due September 2033 The following debt ratings have been affirmed: Pacific Life Insurance Company-- -- "aa-" rating on $150 million 7.90% surplus notes, due December 2023 -- AMB-1+ commercial paper rating The A++ (Superior) financial strength rating of the following subsidiaries of Pacific LifeCorp is unaffected: -- Pacific Life Insurance Company -- Pacific Life & Annuity Company For a complete listing of A.M. Best's 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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