Fitch Rates AmerUs Group's Perpetual Preferred Stock Issuance.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. today assigned a 'BB+' rating to the $250 million AmerUs Group Co. non-cumulative perpetual stock issuance. The Rating Outlook is Stable. The proceeds from the perpetual 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. offering will be used to repay the outstanding balance on a revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. , which was drawn down to retire $125 million in maturing senior debt earlier this month. The remainder of the proceeds will be used to repurchase AmerUs stock and for general corporate purposes. Fitch allocated 100% equity credit to the new issuance given the perpetual term of the preferred stock combined with the non-cumulative dividend feature. According to Fitch's calculations, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma March 31, 2005 equity-adjusted debt-to-total capital at AmerUs was just below 13%. The financial leverage calculation eliminated the $125 million senior debt outstanding at the time. The two-notch gap between AmerUs' long-term issuer rating and its perpetual preferred stock reflects the level of the long-term issuer rating, the subordination to other outstanding hybrid securities, and the amount of hybrid securities in the capital structure. AmerUs Group Co.'s fixed-charge coverage was 7.5 times (x) in 2004, eliminating realized/unrealized investment gains from the earnings figure. This level of fixed-charge coverage is considered solid, and remains an important component in AmerUs Group Co.'s debt ratings. Fitch expects AmerUs to meet management's guidance for profitability as measured by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ROE (return on equity) of 12%, adjusted debt-to-total capital below 25%, and NAIC NAIC See National Association of Investors Corporation (NAIC). (National Association of Insurance Commissioners The National Association of Insurance Commissioners (NAIC) is an Internal Revenue Code Section 501(c)(3) non-profit organization which seeks to organize the regulatory and supervisory efforts of the various state insurance commissioners from around the United States. ) risk-based capital in excess of 300% of the company action level. AmerUs Group Co., an insurance holding company, is headquartered in Des Moines, Iowa “Des Moines” redirects here. For other uses, see Des Moines (disambiguation). Des Moines (pronounced /dɪˈmɔɪn/ in English, , and reported total assets of $23 billion and stockholders' equity of $1.6 billion at March 31, 2005. AmerUs Group Co. -- Perpetual preferred stock rated 'BB+'/Stable; -- Long-term issuer 'BBB'/Stable; -- OCEANs 'BBB-'/Stable; -- PRIDES 'BBB'/Stable. AmerUs Capital I -- Trust preferred 'BB+'/Stable. AmerUs Life Insurance Co. -- Insurer financial strength 'A'/Stable. Indianapolis Life Ins. Co. -- Surplus note 'BBB+'/Stable; -- Insurer financial strength 'A'/Stable. American Investors Life Insurance Co. -- Insurer financial strength 'A'/Stable. Bankers Life Insurance Co. of New York -- Insurer financial strength 'A'/Stable. Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from this site, at all times. This document will remain on the public site for seven days. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion