A.M. Best Affirms Ratings of Aflac; Assigns Rating to New Debt Issue
June 26 2007 - 4:02PM
Business Wire
A.M. Best Co. has affirmed the financial strength rating (FSR) of
A+ (Superior) and issuer credit ratings (ICR) of �aa� of American
Family Life Assurance Company of Columbus (Aflac) (Omaha, NE),
American Family Life Assurance Company of Columbus (Japan Branch)
and its wholly owned subsidiary, American Family Life Assurance
Company of New York (Aflac NY) (New York, NY). Concurrently, A.M.
Best has affirmed the ICR of �a� and the debt ratings of �a� on all
outstanding debt of AFLAC, Inc. (Columbus, GA) [NYSE:AFL]. A.M.
Best has also assigned a debt rating of �a� to JPY 30 billion 1.87%
Samurai notes, due 2012 of AFLAC, Inc. The outlook for all ratings
is stable. (See below for a detailed list of the companies and
ratings.) The proceeds of the recently issued debt will be used for
general corporate purposes, including the replacement of JPY 30
billion Samurai notes, which matured in June 2007. Following the
issuance, Aflac has 70 billion yen remaining on its shelf
registration. Aflac presently maintains strong leverage and
coverage ratios, primarily reflecting the low cost of its
JPY-denominated debt issue in Japan. Aflac�s ratings reflect its
strong capitalization, favorable statutory and GAAP operating
results, its dominant position in Japan and its leading market
position in the United States. Aflac maintains a leading market
position within its product niches, primarily the supplemental
health market segment, led by its cancer insurance product. The
company has successfully grown its surplus position over the past
several years despite the payment of sizeable stockholder
dividends. Aflac�s brand name recognition, well-established
distribution relationships and focused marketing approach have
contributed to its success. A.M. Best will continue to monitor
Aflac�s efforts to reduce its product and geographic
concentrations. A.M. Best will also monitor the potential
challenges to Aflac�s position in Japan, given the increased
competition and the relatively low, but improving, interest rate
environment. Furthermore, recent Japanese regulatory scrutiny of
all companies selling medical products in Japan has slowed sales
demand for medical policies industry wide. The FSR of A+ (Superior)
and the ICRs of �aa� have been affirmed for American Family Life
Assurance Company of Columbus and its following subsidiaries:
American Family Life Assurance Company of Columbus (Japan Branch)
American Family Life Assurance Company of New York The following
debt ratings have been affirmed: AFLAC, Inc.� -- �a� on $450
million 6.5% senior unsecured notes, due 2009 (JPY-Denominated
Samurai Notes) -- �a� on JPY 40 billion 0.71% senior unsecured
notes, due 2010 (JPY-Denominated Uridashi Notes) -- �a� on JPY 15
billion 1.52% senior unsecured notes, due 2011 -- �a� on JPY 10
billion 2.26% senior unsecured notes, due 2016 -- �a� on JPY 20
billion variable interest rate senior unsecured notes, due 2011 The
following debt rating has been assigned: AFLAC, Inc.�
(JPY-Denominated Samurai Notes) -- �a� on JPY 30 billion 1.87%
senior unsecured notes, due 2012 The following indicative rating
has been affirmed for securities available under the existing shelf
registration: AFLAC, Inc.� -- �a� on senior unsecured For Best�s
Debt Ratings, all other Best�s Ratings, an overview of the rating
process and rating methodologies, please visit
www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a
full-service credit rating organization dedicated to serving the
financial services industries, including the banking and insurance
sectors. For more information, visit www.ambest.com.
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