AmerUs Life Holdings's $125M Nts Rtd 'BBB' by S&P AmerUs Life Insurance Co.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 6/12/98--Standard & Poor's today assigned its triple-'B' rating to AmerUs Life Holdings Inc.'s 6.950% $125 million senior notes due 2005, representing the first 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 $750 million shelf registration by AmerUs Life Holdings on April 24, 1998. Standard & Poor's expects that AmerUs Life Holdings Inc. (ALHI ALHI American Leisure Holdings Inc ) will use the proceeds of this offering to partially pay down outstanding bank debt. ALHI is the holding company for the AmerUs Life group of companies, which include AmerUs Life Insurance Co. (single-'A' financial strength rating), Delta Life & Annuity Co., American Investors Life Insurance Co., and Financial Benefit Life Insurance Co. (collectively known as AmerUs Life). ALHI is primarily reliant upon dividends from these subsidiaries to pay interest and principal on its debt. The rating reflects: -- AmerUs Life's strong business review. Although recent acquisitions have increased its overall risk profile due to the concentration of interest-sensitive business, AmerUs Life's new business production is expected to increase due to its increased distribution capacity; -- Capitalization, on a consolidated basis, is strong, with a Standard & Poor's capital adequacy ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. of 155% at Dec. 31, 1997. Total leverage of debt and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. as of March 31, 1998 at AmerUs Life Holdings Inc. was 20%, which is well within the tolerance level for the rating level; -- AmerUs Life has generated a strong financial performance. Profitability, on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, reflects a good GAAP return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). measuring 80 basis points during 1997 due to good mortality, persistency, and expense fundamentals. Earnings were strong during the first three months of 1998 due to favorable mortality and improved operational efficiencies due to AmeriUs Life's recent acquisitions of Delta Life Corp. and AmVestors Financial Corp. OUTLOOK: STABLE Total leverage is expected to remain at or below 25%, which is management's target leverage position. Fixed-charge coverage fixed-charge coverage The number of times that a firm's operating income exceeds its fixed payments. Fixed-charge coverage is a measure of a firm's ability to meet contractually fixed payments, with high coverage indicating significant flexibility for making is expected to remain in excess of 4 times (x). Standard & Poor's also anticipates AmerUs Life's business review will remain strong, its earnings will be solid, and capitalization will remain appropriate for the rating level. -- CreditWire CONTACT: Kevin Ahern, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (1) 212-208-8839 Timothy W Clark, New York (1) 212-208-1593 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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