Aflac Swaps Senior Notes - Analyst Blog

By
A A A

Aflac Inc. ( AFL ) recently announced that it has entered into agreements with three separate parties to swap the previously issued senior notes worth $750 million into yen currency.

The first set of five-year $400 million senior notes which contained a fixed coupon rate of 2.65% was swapped for a coupon rate of 1.22% at yen 30.9 billion.

Now, the second set of ten-year $350 million senior notes, with a fixed coupon rate of 4.0% was converted into a value of yen 27.0 billion with a coupon rate of 2.07%.

Management's intent was to gain a higher debt rating utilizing a lower Japanese effective interest rate from this transaction. The proceeds from the sale of these notes are also to be used to clear off the company's 1.87% Samurai notes which currently stand due in June 2012 valuing at $347 million.

Previously, in its fourth quarter earnings, the company appreciated its operating earnings per share by 6% using gains from yen/dollar exchange rate. Aflac's constant desire to ameliorate its capital position in the market is a favorable sign for its investors as it is calculated to bolster confidence in their minds.

The company seems to be in quite a formidable position at present to battle its ominous competitors such as AMERISAFE, Inc. ( AMSF ), Employers Holdings Inc. ( EIG ) and Seabright Holdings, Inc. ( SBX ).

We currently expect Aflac's first quarter of fiscal 2012 to yield an EPS of $1.67/share and $6.67/share for the full year 2012.

We maintain our Neutral recommendation on the stock. Our recommendation is supported by Zacks #3 Rank, which translates into a short-term rating of Hold.


 
AFLAC INC ( AFL ): Free Stock Analysis Report
 
AMERISAFE INC ( AMSF ): Free Stock Analysis Report
 
EMPLOYERS HLDGS ( EIG ): Free Stock Analysis Report
 
SEABRIGHT INSUR ( SBX ): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AFL , AMSF , EIG , SBX

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Quick on Your Feet
Quick on Your Feet                  
Early Entrepreneurship
Early Entrepreneurship              

Stocks

Referenced

Most Active by Volume

48,099,947
  • $16.09 ▲ 0.50%
40,277,806
  • $102.50 ▲ 0.24%
40,236,499
  • $19.57 ▲ 2.35%
31,092,510
  • $49.75 ▲ 0.65%
30,795,218
  • $34.92 ▲ 0.78%
29,910,855
  • $3.63 ▲ 0.83%
24,019,154
  • $13.06 ▼ 0.38%
23,753,906
  • $74.82 ▲ 1.31%
As of 8/29/2014, 04:04 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com