Fitch Rates New Allstate Senior Note Issue 'A+'.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 Allstate Corporation's (Allstate) $650 million 5% senior note issue due August 2014. 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 due May 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 June 30, 2004 financial leverage will be approximately 22.4% of total adjusted capital, excluding accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as (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 is approximately 15 times, which reflects the excellent financial results achieved in the first half of 2004. Excellent first half 2004 results for Allstate reflect 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 the property/casualty personal automobile segment continues to be a favorable consideration, and performance in homeowners has also shown material improvement in recent periods. 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 and Fitch expects Hurricane Charley will make this an average to above-average year for the effect of catastrophic events on Allstate financials, in contrast to recent years' below-average effect. Fitch also notes that recent asbestos reserve increases by prominent industry players and Allstate's own second-quarter reserve increase of $216 million based on its experience in advance of its traditional third-quarter asbestos and environmental reserve study could signal the possibility of additional increases. Allstate is one of the largest property/casualty insurance companies in the U.S. The company provides a full array of personal lines insurance coverage throughout 49 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 new written premiums of $13.1 billion for the first half of 2004, up from $12.4 billion for first half 2003. Allstate Financial, the company's large life insurance and annuity operation, contributed approximately 13% of first half 2004 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 $139.8 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 $20.7 billion as of June 30 2004. Allstate Corporation -- Long-term issuer affirmed at 'A+'/Stable Outlook; -- 5.0% senior notes due 2014 assigned 'A+'/Stable Outlook. Note: The noted ratings are initiated by Fitch as a service to users of Fitch Ratings. The ratings are based primarily on public information. |
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