A.M. Best Assigns Issuer Credit Rating to Ameriprise Financial, Inc.; Assigns Indicative Rating to New Shelf Registration
October 11 2005 - 3:17PM
Business Wire
A.M. Best Co. has assigned an issuer credit rating (ICR) of "a-" to
Ameriprise Financial, Inc. (Ameriprise) (Minneapolis, MN) (NYSE:
AMP), the ultimate holding company for the former subsidiaries of
American Express. Concurrently, A.M. Best has assigned an
indicative rating of "a-" to the senior unsecured debt under the
company's $1.7 billion shelf registration recently filed with the
Securities and Exchange Commission. All ratings have a negative
outlook. The financial strength ratings and ICRs of IDS Life
Insurance Company and its subsidiaries remain unchanged. Once the
shelf is declared effective, A.M. Best expects Ameriprise to draw
down about $1.5 billion of senior unsecured notes. The majority of
the draw-down proceeds will likely be used to refinance its $1.35
billion bridge facility, which was used to replace the company's
inter-company debt payable to American Express Company at the time
of the spin off. Ameriprise's current debt-to-capital ratio of
approximately 16% is expected to remain relatively consistent in
the near to medium term, with fixed charge coverage of over seven
times. A.M. Best believes that future earnings and cash flow will
provide strong debt service coverage and enable improved
capitalization at the company and its life/health insurance
subsidiaries. The negative outlook reflects A.M. Best's concerns
about the inherent risks associated with re-branding the
enterprise, the successful execution of plans to separate its
operations from American Express, as well as the challenges to
maintain consistent operating results and appropriate
capitalization levels for the current ratings. 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. A.M. Best Co., established in 1899, is the
world's oldest and most authoritative insurance rating and
information source. For more information, visit A.M. Best's Web
site at www.ambest.com.
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