A.M. Best Assigns Debt Rating to Aflac Incorporated’s New Senior Notes

A.M. Best Co. has assigned a debt rating of “a-” to the newly issued $300 million 3.45% senior unsecured notes due 2015 and $450 million 6.45% senior unsecured notes due 2040 of Aflac Incorporated (Aflac) (Columbus, GA) [NYSE: AFL]. The assigned outlook is stable.

Proceeds from the senior notes will be used to repay in full at maturity the 1.52% Uridashi notes and variable interest rate Uridashi notes, both due September 2011, to potentially repurchase common stock and for general corporate purposes. Aflac’s existing financial strength, issuer credit and debt ratings are unchanged.

This debt offering enhances Aflac’s financial flexibility. Aflac continues to maintain strong brand recognition in both Japan and the United States and a healthy risk-adjusted capital position at its operating subsidiaries. In addition, with its very favorable operating earnings and strong cash flows, A.M. Best believes the organization can withstand additional potential write-downs in its bond portfolio. However, A.M. Best will continue to monitor Aflac's investment portfolio and capitalization levels.

A.M. Best notes that Aflac’s financial leverage is expected to remain below 25%, which is consistent with its current ratings.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life & Non-Life Insurance Edition which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include A.M. Best’s Ratings & the Treatment of Debt. Methodologies 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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