AFL AFLAC Inc

Yesterday, AFLAC Inc. (AFL) announced a private offer to exchange the company’s outstanding 8.5% senior notes due 2019 for new notes due in 2022.  The company has $850 million worth notes outstanding at present. The offer is only open to holders of old notes who are either qualified institutional buyers or are not U.S. persons, as defined by the Securities Act, 1933.

The exchange offer will expire on September 28, 2011, unless extended or terminated earlier by AFLAC. Additionally, tenders of the old notes can be withdrawn any time before September 14, 2011. Eligible holders who validly tender and do not withdraw their old notes before the said date will receive an early exchange premium.

The terms and conditions of the offer were disclosed in a confidential offering memorandum and related letter of transmittal on August 31, 2011. One of the conditions states that new notes worth $250 million should be issued in exchange of the validly tendered old notes which are not validly withdrawn before September 14, 2011.

The new notes have not been registered under the Securities Act or any state laws and hence, cannot be sold in the U.S. However, AFLAC will enter into a registration rights agreement for the same.

The third quarter Zacks Consensus Estimate of earnings is currently at $1.59 per share, up about 9.53% year-over-year. Of the 16 firms covering the stock, 3 firms have revised their estimates upward while no downward revisions were witnessed.

For 2011, AFLAC’s earnings are expected to be $6.3 per share, climbing about 13.95% year-over-year.

AFLAC is a health and life insurance company and its major competitors are Unum Group (UNM) and Catalyst Health Solutions Inc. (CHSI). The company currently carries a Zacks #3 Rank which translates into a short tern Hold rating.

On Wednesday, the shares of AFLAC closed at $37.72, up 2.17%, on the New York Stock Exchange.

 
AFLAC INC (AFL): Free Stock Analysis Report
 
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