Rating agency A.M.Best has conferred a rating of "a-" on senior
debt, "bbb+" on subordinated debt and "bbb" on preferred stock of
the recently filed shelf registration of
Torchmark Corp.
(
TMK
).
Shelf registration is a process authorized by the U.S.
Securities and Exchange Commission that allows companies to file a
single registration document permitting the issuance of multiple
securities. Shelf registration refers to the registration of a new
issue, which can be prepared in advance for up to three years, so
that the issue can be offered quickly as soon as funds are needed
or market conditions are favorable.
The rating agency also provided an indicative rating of "bbb" to
the preferred securities, which may come out under the company's
current shelf registration.
The rating agency acknowledges Torchmark's strong business
fundamentals and its niche presence in life and supplemental health
businesses. Its leverage ratio stands at 22.9%, which falls within
the rating agency's comfort level. A.M. Best is also confident
about the company's ability to pay off its interest obligations as
reflected by its fixed interest coverage ratio of 9.4x.
Earlier the rating agency had affirmed the financial strength
ratings ("FSR") and the issuer credit ratings ("ICR") of Torchmark
and its subsidiaries. Torchmark's subsidiaries have been assigned
an FSR of "A+" and an ICR of "aa-," while the holding company has
been conferred with an ICR of "a-," along with its existing debt
ratings. All the ratings hold a stable outlook.
A.M. Best took into account Torchmark's solid market presence as
well as a broad product profile that offers annuities, whole and
term life insurance, accidental death insurance, health insurance,
Medicare supplements, and long-term health care policies. Torchmark
makes these offerings through its subsidiaries Liberty National
Life, American Income Life Insurance, United Investors Life
Insurance, United American Insurance and Globe Life and Accident
Insurance.
Torchmark also scores strongly with other rating agencies. Last
month, Fitch Ratings confirmed its insurer financial strength
("IFS") rating of 'A+' and ICR of 'A-.' The ratings carried a
stable outlook.
Peer
Assurant Inc.
(
AIZ
) also carries an ICR of "bbb" with a stable outlook by A.M.Best.
Torchmark currently retains a Zacks # 3 Rank, which translates into
a short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on its shares.
ASSURANT INC (AIZ): Free Stock Analysis Report
TORCHMARK CORP (TMK): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research