OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Long-Term Issue Credit Rating of “bbb” to the $450 million 4.50% 30-year senior unsecured notes issued by Unum Group (Unum) (headquartered in Chattanooga, TN) [NYSE: UNM]. The outlook assigned to this Credit Rating (rating) is stable. All other ratings of Unum and its subsidiaries are unchanged.
The proceeds of the note issuance is expected to be used to retire existing debt through a tender offer on Unum’s $226.5 million of outstanding 7.405% notes due 2038 and $350 million 3.0% notes due 2021.
AM Best expects that the issuance will not increase financial leverage for Unum and will be neutral to the total amount of debt outstanding. Unum’s financial leverage, as calculated by AM Best, is moderate at approximately 23.8% and interest coverage is good at over nine times at June 30, 2019.
Unum has good liquidity through its favorable operating cash flows. Additional sources of financial flexibility for the organization are holding company cash and investments and a $600 million revolving credit facility. Unum continues to report strong operating results driven by its ongoing insurance business with a leading market positions in the majority of its core product lines and a diverse nationwide distribution network.
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