A.M. Best has assigned indicative ratings of “bbb” to senior
unsecured debt, “bbb-” to subordinated debt and “bb+” to preferred stock
of the recently filed universal shelf registration by Unum Group
(Unum) (headquartered in Chattanooga, TN) [NYSE:UNM]. The new
registration replaces Unum’s previous shelf, which recently expired. The
outlook assigned to these ratings is stable. Consequently, A.M. Best has
withdrawn the indicative ratings related to the previous shelf
registration. All remaining ratings of Unum and its subsidiaries are
unchanged.
Unum’s financial leverage as of Sept. 30, 2014, is reasonable for its
ratings at roughly 23%, while fixed charge coverage remains strong. The
organization has excellent financial flexibility as it maintains over
$500 million of cash and short-term investments at the holding company –
enough to cover over two and a half years of interest expense.
Unum’s current ratings reflect its strong franchise, solid
capitalization, diversified earnings sources and favorable operating
performance. In addition, the investment portfolio provides a somewhat
stable source of income due to manageable levels of impairments.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
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Analyzing Insurance Holding Company Liquidity
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Equity Credit for Hybrid Securities
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Insurance Holding Company and Debt Ratings
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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