A.M. Best Assigns Issue Credit Rating to Aflac Incorporated’s Subordinated Debentures
October 18 2017 - 10:03AM
Business Wire
A.M. Best has assigned a Long-Term Issue Credit Rating of
“bbb+” to Aflac Incorporated’s (Aflac) (Columbus, GA) [NYSE:
AFL] recently priced yen-denominated 30-year, 2.108% subordinated
debentures totaling JPY 60 billion (USD 536 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 the funding of all or a portion of the redemption
price of the existing 5.50% subordinated debentures due 2052. Any
additional proceeds would be used for general corporate purposes.
Aflac’s financial leverage is expected to remain in the 23% range
once the repayment of the issue occurs. Aflac’s financial
flexibility continues to be strong, and interest coverage was in
excess of 16 times as of June 30, 2017.
Aflac’s ratings, which were affirmed on June 13, 2017, recognize
its position as one of the world’s leading underwriters 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. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
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/20171018006048/en/
A.M. BestKate SteffanelliSenior Financial Analyst+1 908 439
2200, ext. 5063kate.steffanelli@ambest.comorJoseph Zazzera,
MBADirector+1 908 439 2200, ext.
5797joseph.zazzera@ambest.comorChristopher SharkeyManager,
Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim PeavyDirector,
Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
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