A.M. Best Assigns Issue Credit Ratings to Aflac Incorporated’s Senior Unsecured Notes
September 15 2016 - 11:36AM
Business Wire
A.M. Best has assigned a Long-Term Issue Credit Rating
(Long-Term IR) of “a-” to the $300 million 2.875% 10-year senior
unsecured notes and $400 million 4.00% 30-year senior unsecured
notes recently issued by Aflac Incorporated (Aflac)
(Columbus, GA)(NYSE:AFL). The outlook assigned to these Credit
Ratings (ratings) is stable. Aflac’s existing Long-Term Issuer
Credit Ratings remain unchanged.
A.M. Best expects the proceeds from the sale of the notes to be
utilized to repay in full, at maturity, Aflac’s $650 million 2.65%
senior notes due February 2017. Additional funds will be used for
general corporate purposes.
A.M. Best notes that Aflac’s financial leverage will be
minimally impacted, and is expected to remain in the 25% range
until the repayment of the February maturity occurs. Additionally,
Aflac’s financial flexibility remains strong and interest coverage
is expected to remain above 12 times.
All of 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 both 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 © 2016 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/20160915006003/en/
A.M. BestKate Steffanelli, +1-908-439-2200, ext.
5063Senior Financial
Analystkate.steffanelli@ambest.comorJoseph Zazzera, MBA,
+1-908-439-2200, ext. 5797Assistant Vice
Presidentjoseph.zazzera@ambest.comorChristopher Sharkey,
+1-908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
+1-908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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