A.M. Best Assigns Issue Credit Rating to Aflac Incorporated’s Senior Unsecured Notes
January 18 2017 - 11:04AM
Business Wire
A.M. Best has assigned a Long-Term Issue Credit Rating of
“a-” to Aflac Incorporated’s (Aflac) (Columbus, GA)
(NYSE:AFL) recently priced yen-denominated 10-year, 0.932% senior
unsecured notes totaling JPY 60 billion (USD 520 million). The
outlook assigned to the Credit Rating (rating) is stable. Aflac’s
existing Long-Term Issuer Credit Ratings remain unchanged.
A.M. Best anticipates the proceeds from the sale of the notes to
be utilized for general corporate purposes; however, it is expected
that the primary use will be for the replenishment of holding
company cash that was used during the recent tender offers made in
December 2016. A.M. Best notes that Aflac intends to pay in full
its $650 million senior notes, due February 2017, utilizing
proceeds from a previous issuance. Aflac’s financial leverage is
expected to remain in the 25% range until the repayment of the
February maturity occurs. Aflac’s financial flexibility continues
to be strong, and interest coverage is expected to remain above 12
times.
Aflac’s ratings, which were affirmed on June 22, 2016, recognize
its position as the world’s leading underwriter of individually
issued policies marketed at worksites. The company’s insurance
subsidiaries offer a diverse portfolio of supplemental health
products in Japan and the United States, which generate strong
earnings and steady cash flows to the holding company. A.M. Best
believes that Aflac will remain challenged to achieve considerable
growth in its domestic operations given the intense competition in
the voluntary supplemental insurance market. Additionally, Aflac’s
earnings will be impacted due to the weaker Japanese yen relative
to the U.S. dollar, and the potential exists for noteworthy
realized investment losses as the company continues to execute its
long-term asset allocation strategy.
This press release relates to Credit Ratings that have been
published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please see A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating
Services, Inc. and/or its subsidiaries. ALL RIGHTS
RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20170118005886/en/
A.M. BestKate Steffanelli, +1-908-439-2200,
ext. 5063Senior Financial
Analystkate.steffanelli@ambest.comorJoseph Zazzera, MBA,
+1-908-439-2200, ext.
5797Directorjoseph.zazzera@ambest.comorChristopher
Sharkey, +1-908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
+1-908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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