OLDWICK, N.J.--(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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