S&P Announces: Protective Life Corp.'s $100M, 30-Year Trust-Originated Preferred Securities Rated 'BBB+'.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 20, 2004 On Jan. 20, 2003, Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. assigned its 'BBB+' 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. rating to Protective Life Corp's (NYSE NYSE See: New York Stock Exchange :PL) proposed $100 million, 30-year trust-originated preferred securities (TOPrS), which will be issued from PLC Capital Trust V and guaranteed by PL. The proposed new issue will be drawn down from the existing $500 million shelf registration filed on May 5, 2003. PL intends to use the proceeds to repay $92 million in bank debt under a revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, with the balance of the proceeds used for general corporate purposes. After the note issuance, PL is expected to maintain financial leverage of about 30% and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). fixed-charge coverage fixed-charge coverage The number of times that a firm's operating income exceeds its fixed payments. Fixed-charge coverage is a measure of a firm's ability to meet contractually fixed payments, with high coverage indicating significant flexibility for making of more than 10x. Absent the use of interest-rate swaps that reduce fixed-charge costs, GAAP fixed-charge coverage will be about 8x. The ratings are based on PL's very strong and diversified business profile, exceptionally strong earnings, extremely strong capitalization, very strong liquidity, and strong investment portfolio. PL has a very strong and diversified business profile, with a solid position in the individual life, annuity, guaranteed investment contracts Guaranteed investment contract (GIC) A pure investment product in which a life company agrees, for a single premium, to pay at a maturity date the principal amount of a predetermined annual crediting (interest) rate over the life of the investment. , and credit life markets. A profitable acquisition line of business that acquires in-force blocks of policies and small insurance companies complements these businesses. Central to the ratings on PL is its consistently exceptional earnings performance, which helps lift the ratings above what the group's diversified business profile would otherwise suggest. Operating performance for full-year 2003 is expected to continue to demonstrate exceptional returns. Ratings List Protective Life Corp. Counterparty credit rating A/Stable/-- Senior unsecured debt rating A Preferred stock rating BBB+ Protective Life Insurance Co. Counterparty credit rating AA/Stable/A-1+ Financial strength rating AA/Stable/A-1+ Empire General Life Assurance Corp. Protective Life and Annuity Insurance Co. Financial strength rating AA/Stable West Coast Life Insurance Co. Counterparty credit rating AA/Stable/-- Financial strength rating AA/Stable |
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