Best’s News & Research Service - June 10, 2024 03:32 PM (EDT)
AM Best Assigns Issue Credit Rating to Unum Group’s New Senior Unsecured Notes
- June 10, 2024 03:32 PM (EDT)
//BestWire// - AM Best has assigned a Long-Term Issue Credit Rating (Long-Term IR) of “bbb+” (Good) to the recently issued $400 million of 6.000% senior unsecured notes due June 15, 2054, issued by Unum Group (Unum) (headquartered in Chattanooga, TN) [NYSE: UNM]. The outlook assigned to this Credit Rating (rating) is stable.
The proceeds will be used to repay the $350 million aggregate principal amount of outstanding indebtedness under the company’s senior unsecured term loan facility. The assignment of the Long-Term IR considers the rating profile of Unum’s principal insurance subsidiary units, as well as the parent company’s financial leverage, coverage and overall debt servicing profile, and the application of appropriate notching to reflect structural subordination of the holding company’s senior unsecured debt.
Unum’s financial leverage, as calculated by AM Best, was in the 25% range at year-end 2023 and will remain in the 25% range following the new debt offering. Earnings coverage of interest expenses has been strong in the 6-10 times range over the past three years. Coverage is expected to remain strong over the near term.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.