OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Long-Term Issue Credit Rating of “aa-” to the $350 million 4.850% 60-year surplus notes recently issued by Guardian Life Insurance Company of America (Guardian) (New York, NY). The outlook assigned to the Credit Rating (rating) is stable.
A.M. Best expects Guardian to utilize the proceeds of the surplus notes for general corporate purposes, which may include the repayment or redemption of existing indebtedness or other obligations. The new $350 million notes, together with the 7.375% $450 million surplus notes due 2039 and the 4.875% $400 million surplus notes due 2064 that currently are outstanding, account for all of the organization’s financial leverage. A.M. Best believes Guardian’s unadjusted debt-to-capital ratio will be roughly 16%, which remains prudent, and pro-forma statutory interest coverage also is estimated to be adequate.
Guardian’s ratings reflect its long-term financial strength as a mutual with superior risk-adjusted capitalization, a generally conservative invested asset portfolio, a track record of growth and profitability with favorable operating results, and a comprehensive enterprise risk management (ERM) strategy. Guardian’s core businesses — individual life, individual disability, group employee benefits and retirement products and services — continue to generate steady revenue, earnings and cash flows. Furthermore, Guardian utilizes a sophisticated ERM approach that includes the use of an economic capital model and scenario stress testing to assist with its strategic business planning. Guardian recently has made progress on a number of initiatives, including the exit and divestiture of lower margin businesses and expansion of its presence in its core markets.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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