According to Reuters, Fitch Ratings has affirmed the issuer
default ratings ("IDR") at 'BB-', senior secured notes at 'BB'
together with other ratings on the existing credit position of
CNO Financial Group Inc.
). The rating agency has also kept the ratings of the company's
subsidiaries. The outlook for all the ratings is stable.
The rating affirmations come on the heels of the company's
recent decision to recapitalize the holding company. The rating
agency believes that it is a favorable decision for CNO Financial
as it will lead to an advancement of its financial profile partly
offset by increased expenditure from repurchasing a part of its
The ratings are subjected to an upgrade, provided the company
continues to earn a decent free income, restricts its interest
coverage ratio at 6x and NAIC RBC at 350% and refinances its senior
notes in order to create a debt profile that would be at par with
its peer life insurance companies.
However, the ratings will be downgraded if NAIC RBC ratio falls
below 300% and the operating leverage exceeds 20x, the overall
operating performance of the company falls, financial leverage
exceeds 30% and TFC goes beyond 0.65x.
In a separate development, Moody's of
) rated the senior notes of CNO Financial at Ba3 with a stable
Another rating agency, Standard & Poor's Ratings Services
has assigned its issue level rating at 'B+' to CNO Financial's $250
million senior secured notes scheduled to mature in 2020. Also, it
has conferred a preliminary 'B+' issue-level rating to the $250
million senior secured term loan due in 2016 and to the $400
million senior secured term loan that will mature in 2018. The
rating agency rated the proposed $50 million senior secured
revolving-credit facility of the company at preliminary 'B+'.
Following the news, CNO Financial's shares gained 5.5% (or 49
cents) to close at $9.45 yesterday.
Rating affirmations or upgrades from credit rating agencies play
an important part in retaining investor confidence in the stock as
well as maintaining credit worthiness in the market. We believe,
strong ratings scores will help CNO Financial retain investor
confidence and help it write more businesses going forward, thereby
boosting its results.
), a close competitor of CNO Financial , received ratings of "a-"
on senior debt, "bbb+" on subordinated debt and "bbb" on preferred
stock from A.M. Best. Another rating agency, Moody's, affirmed the
insurer financial strength ("IFS") rating at 'A1' for Torchmark's
subsidiary, Liberty National Life Insurance Company. The company's
senior debt rating has also been affirmed at 'Baa1' with a stable
CNO Financial carries a Zacks #2 Rank that translates into a
short-term Buy rating. Its peer, Torchmark holds a short-term Zacks
#3 Rank (Hold).
CNO FINL GRP (CNO): Free Stock Analysis Report
MOODYS CORP (MCO): Free Stock Analysis Report
TORCHMARK CORP (TMK): Free Stock Analysis
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