DCR Assigns American General Institutional Capital A $500 Million Capital Trust Preferred Stock 'A+' RatingCHICAGO, Nov. 27 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) rates American General Institutional Capital A's $500 million Capital Trust Preferred Stock 'A+' (Single A-Plus). Payment of dividends and redemption on the securities are unconditionally guaranteed by the trust's parent, American General Corporation (AGC) on a subordinated basis. The securities effectively rank pari passu with, and carry the same rating as, AGC's outstanding preferred stock. AGC intends to initially use the proceeds of this issue to pay down commercial paper. At yearend 1996 AGC is expected to have a capital structure consisting of approximately 19 percent debt (including short-term debt) and 16 percent preferred stock. These compare to actual levels of 24 percent and 10 percent, respectively at June 30, 1996. Fixed charge and preferred dividend coverage Preferred dividend coverage Net income after interest and taxes (before common stock dividends) divided by preferred stock dividends. preferred dividend coverage ratios are expected to decline only modestly from the 6.3 times level of June 30, 1996. The company targets capitalization mix levels not to exceed 25 percent debt and 10 percent preferred. Because the yearend preferred level is outside the target range, the company has indicated a willingness to consider revising target levels of debt and preferred stock. The trust is a special purpose subsidiary of AGC and will issue preferred securities and purchase subordinated debentures from AGC. This financing will permit AGC to deduct interest expense for federal income tax purposes. The preferred securities mature in 2045. AGC ranks as one of the largest diversified stock financial services organizations in the USA with total GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). assets of $64.3 billion and stockholders` equity of $5.5 billion at Sept. 30, 1996. The company is a leading provider of retirement services, consumer loans and life insurance. SOURCE Duff & Phelps Credit Rating Co.
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/CONTACT: Martha M. Butler, CFA, 312-368-3191, butler@dcr.com, or Julie A. Burke, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , CFA, 312-368-3158, burke@dcr.com, both of Duff & Phelps Credit Rating Co./ (AGC) CO: American General Institutional Capital ST: Illinois IN: FIN SU: RTG RTG abbreviation for ready to go; used in medical records. MS -- NYW050 -- 4717 11/27/96 12:37 EST EST electroshock therapy. EST abbr. electroshock therapy http://www.prnewswire.com |
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