OLDWICK, N.J.--()--A.M. Best Co. has assigned a debt rating of “bbb+” to the recently issued CAD 150 million, 4.30% non-cumulative five-year rate reset Class A preferred shares Series G of Industrial Alliance Insurance and Financial Services Inc. (IAG) (Quebec City, Canada). The outlook assigned to the rating is stable. This offering is a five-year rate reset preferred share issued at CAD 25 per share.
The stable outlook is consistent with the outlook of all the other existing ratings of IAG and its core operating insurance subsidiaries. (Please see A.M. Best’s press release dated February 3, 2012.)
The proceeds from the offering will be used for general corporate purposes and will be added to IAG’s capital base. With the issuance of the preferred shares, A.M. Best notes that IAG’s existing financial leverage remains within the range that supports its current ratings, although the interest coverage ratio remains slightly below the range that supports its current ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Insurance Holding Company and Debt Ratings” and “Equity Credit for Hybrid Securities.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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