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Aflac Prices Senior Notes Worth $700 Million in Public Offering

Aflac IncorporatedAFL recently announced the public offering of senior notes in two series. The notes are slated to mature in 2026 and 2046, respectively. The $300 million (par value) senior notes have been priced at a coupon rate of 2.875% and are due in due 2026. On the other hand, the $400 million (par value) senior notes, which are scheduled for maturity in 2046, have been priced at a coupon rate of 4%.

The company has also announced the re-offer yield for both series of senior notes. The series, which is due in 2026, will likely be priced at 99.816 and have a re-offer yield of 2.896%. The series, which is due in 2046, would have the issue price of 99.235 and a re-offer yield of 4.044%.

Aflac intends to use the net proceeds from the offering to repay $650 million principal amount outstanding of its 2.65% senior notes that were issued in February and July of 2012. The 2.65% senior notes would mature in 2017. The remaining proceeds, if any, would be utilized to finance general corporate purposes.

As of Jun 30, 2016, the company had a total long-term debt of $5009 million, up nearly 1% from year-end 2015. By the end of second quarter, the debt-to-equity ratio was 22%, up 600 bps from Dec 31, 2015. With the latest issuance, the company's debt-to-equity ratio is expected to deteriorate to 25% due to an increase of 300 bps.

The Zacks Rank #3 (Hold) insurer has an extraordinary capability of handling leverage. Consistent earnings and a solid liquidity have enabled Aflac to maintain strong risk-adjusted capital.

AFLAC INC Price

AFLAC INC Price | AFLAC INC Quote

Stocks That Warrant A Look

Some better-ranked stocks from the same space are Allied World Assurance Company Holdings, AG AWH , National Interstate Corporation NATL and NMI Holdings Inc NMIH . All of the stocks sport Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

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


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

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