The recently issued 5.75% senior unsecured notes worth $250
), have been rated "bbb" by A.M. Best. The outlook is stable. The
notes are scheduled to mature in 2042.
The ratings signify Unum Group's dominant market presence, diverse
business mix, continued operating profitability, and solid
financial flexibility and strong risk-adjusted capitalization.
Standard & Poor's Ratings Services ("S&P"), another rating
agency, assigned "BBB-" ratings to the senior note. The rating came
on the back of Unum's solid foothold in group and voluntary
products coupled with steady operational results, conventional
investment portfolio, and solid capitalization.
However, potential increase in disability claims and challenges
faced by the company dwarf the positives.
S&P believes the new issue will immediately augment Unum
Group's liquidity and financial flexibility in the near term. It
expects the company to maintain EBITDA interest coverage at more
than 10x, and debt-to-total capital ratio to remain below 25%.
S&P maintains counterparty credit rating of "BBB-" with a
positive outlook for Unum Group.
Another credit rating agency,
), assigned "Baa2" rating with a stable outlook.
Fitch Ratings intends to assign "BBB" rating to the notes. It,
however, affirms Issuer Default Rating (IDR) at 'BBB+' with a
stable outlook for Unum Group.
The debt-to-capital ratio at June 30, 2012 was 23%. With this
issuance, the ratio is expected to increase by 200 basis points.
The proceeds from the issue are to be deployed to fund debt
maturity scheduled in late 2015 as well as for general corporate
Recently, senior unsecured debt and subordinated debt of
), has been bestowed with "bbb" and "bb-" ratings, respectively by
A.M. Best. The preferred stock was assigned with "bb+" rating.
Cigna closely competes with Unum Group. All the ratings carry a
We retain our Neutral recommendation on Unum Group. The
quantitative Zacks #3 Rank (short-term Hold rating) for the company
indicates no clear directional pressure on the stock over the near
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