A.M. Best Assigns Debt Rating to Unum Group’s New Senior Notes
OLDWICK, N.J.-(Business Wire)-September 28, 2009 - A.M. Best Co. has assigned a debt rating of “bbb-” to the $350 million 7.125% senior unsecured notes, maturing 2016 issued by Unum Group (Unum) (Chattanooga, TN) [NYSE: UNM]. The rating outlook is stable. Unum and its subsidiaries’ existing financial strength, issuer credit and debt ratings are unchanged.
The proceeds from the notes are to be used for general corporate purposes. A.M. Best notes that earlier in 2009, the company paid off $132.2 million of maturing debt using cash at the holding company. At June 30, 2009, Unum’s debt-to-capital ratio was reported at 18.5%, well below the company’s target of 25%. The company’s financial leverage has remained in the lower end of Unum’s targeted range over the last couple of years and is lower than or comparable to its industry peers. Including the new notes, leverage is expected to be approximately 20.6%.
Unum’s ratings reflect its improving income from continuing operations, its adequate capitalization and name recognition in the employee benefits market. Partially offsetting these positive rating factors are the challenges that a recessionary environment creates for disability income insurers, and the continued competitive market for Unum’s core products.
For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
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