Chubb Corp's $400M Sr Nts Rtd AA+ by S&P;Unit Rtg Afmd.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 8/11/98-- Standard & Poor's today assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. its double-'A'-plus rating to Chubb Corp.'s $400 million ($200 million each of seven-year and 20- year notes respectively) senior notes offering. The offering represents a 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: on an existing shelf registration which was filed in June 1995. Concurrently, Standard & Poor's 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. its double- 'A'-plus issuer credit and senior debt ratings on Chubb Corp and its unit, Chubb Capital Corp. These rating actions follow Standard & Poor's expectations that Chubb will provide existing and future note holders with extremely strong financial security. Total debt outstanding of $255.6 million is affected. Standard & Poor's expects the proceeds from the offering to be used primarily to facilitate share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. . However, given management's recent actions to reduce debt at the various holding companies, financial leverage is expected to remain conservative relative to the rating. Post transaction, debt anddebt like securities are expected to constitute less than 12% of Chubb's capital structure. Prior to the transaction debt as a percentage of 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. constituted a very conservative 4.6%. Similarly, interest coverage on both a statutory cash and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis should remain extremely strong at approximately 13.8 times (x) and 13.2x respectively. Other factors that are expected to support Chubb Corp.'s ratings is the company's strong market position in the property-casualty business, superior underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results, and solid capitalization at the insurance operations. OUTLOOK: STABLE In the long term, Standard & Poor's' believes management would feel comfortable operating at a debt-to-capital ratio close to 20%. However, any increase in leverage is not likely to be arbitrary but related to a specific event such as an acquisition, new business opportunity or share repurchase.---CreditWire
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