A.M. Best has assigned debt ratings of “bb+” to the $325 million
4.50% senior unsecured notes due 2020 and $500 million 5.25% senior
unsecured notes due 2025 recently issued by CNO Financial Group, Inc. (CNO
Financial) (Carmel, IN) [NYSE: CNO]. The outlook assigned to all
ratings is positive. CNO Financial’s existing issuer credit and debt
ratings are unchanged.
The new issues are part of a recapitalization plan that includes a new
$150 million senior unsecured revolver, $100 million of which will be
drawn at closing. The company plans to use the roughly $925 million in
proceeds to repay all of its outstanding borrowings, including fees and
expenses, under its existing senior secured credit facility in addition
to its outstanding 6.375% senior secured notes due in 2020. Any
remaining proceeds will be used for general corporate purposes, which
could include share repurchases.
A.M. Best anticipates that CNO Financial’s adjusted financial leverage
ratio will increase to approximately 19% as a net result of the
recapitalization plan. Despite the modest increase in leverage, A.M.
Best notes that the company’s financial leverage and interest coverage
ratios remain well within A.M. Best’s guidelines for its current ratings.
CNO Financial and its subsidiaries provide interest-sensitive life
insurance, traditional life insurance, fixed annuities, Medicare
supplement insurance, long-term care insurance and other supplemental
health products to middle-income pre-retiree and retired people within
the United States.
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:
-
Insurance Holding Company and Debt Ratings
-
Analyzing Insurance Holding Company Liquidity
This press release relates to rating(s) 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 visit A.M. Best’s Ratings
& Criteria Center.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
Copyright Business Wire 2015