Fitch Rates New Allstate Senior Note Issue 'A+'; Outlook Stable.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. has assigned a senior debt rating of 'A+' to The Allstate Corporation's (Allstate) $800 million 5.55% senior note issue due May 2035. This rating is consistent with Fitch's current long-term issuer and existing debt ratings on Allstate. The Rating Outlook is Stable. Allstate anticipates using the proceeds of the debt issuance for general corporate purposes, including facilitation of the redemption of a $900 million 7 7/8% senior note issue which expired May 1, 2005. Following the issuance, Allstate's 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 financial leverage will be approximately 20.2% of total adjusted capital, excluding AOCI AOCI Accumulated Other Comprehensive Income AOCI Airport Operators Council International (now Airports Association Council International) AOCI Airborne Ocean Color Imager AOCI Accredited Off-Campus Instruction AOCI Adoption Option Committee, Inc. . Allstate's interest coverage ratio was approximately 13 and 18 times (x), respectively in 2004 and first quarter 2005, reflecting its excellent financial results. Allstate's excellent 2004 results continued in first quarter 2005 reflecting the company's strong market position, good operating performance and conservative capitalization structure. Allstate has a strong asset portfolio and reasonable operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. . The company's strong operating track record in property/casualty personal automobile segment continues to be a favorable consideration, and performance in homeowners, excluding catastrophes, has also been good. Fitch's main concern for Allstate continues to be its property/casualty catastrophe exposure. As the nation's second largest personal lines insurer, Allstate will continually be challenged to manage this exposure, although Allstate favorably managed the effects of 2004's hurricane losses. Fitch also notes challenges in the Life operation due to rising interest rates. Allstate is one of the largest property/casualty insurance companies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The company provides a full array of personal lines insurance coverage throughout states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . The company had property/liability earned premiums of $6.7 billion for the first quarter of 2005, up 4.9% or $.3 billion from first quarter 2004. Allstate Financial, the company's large life insurance and annuity operation, contributed approximately 11% of first quarter 2005 operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . Allstate had total assets of $151.5 billion and total shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $21.3 billion, as of March 31, 2005. Note: The noted ratings were initiated by Fitch as a service to users of Fitch ratings and are based on public information. Entity/Issue/Type Action Rating/Outlook Allstate Corporation -- $800,000,000 5.55% senior notes due 2035 Assign 'A+'/Stable. |
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