OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned Long-Term Issue Credit Ratings (Long-Term IR) of “a-” to the new yen-denominated senior notes of Aflac Incorporated (Aflac) (Columbus, GA) (NYSE: AFL), which total JPY 38.0 billion. The offering consists of JPY 12.6 billion of 0.5% senior unsecured notes due 2029; JPY 9.3 billion of 0.843% senior unsecured notes due 2031; JPY 9.8 billion of 0.934% senior unsecured notes due 2034; and JPY 6.3 billion of 1.122% senior unsecured notes due 2039. The outlook assigned to these Long-Term IRs is stable. Aflac’s existing Long-Term Issuer Credit Ratings remain unchanged.
Aflac anticipates the proceeds from the sale of the notes to fund all or a portion of the redemption of its 4% senior unsecured notes due 2022, of which $350 million of the principal amount is outstanding. The company intends to use proceeds in excess of the redemption price, if any, for general corporate purposes. Aflac’s capitalization and liquidity provide financial flexibility and support for the overall enterprise. Aflac’s financial leverage, which was slightly above 21% at Sept. 30, 2019, will increase modestly to just above 22% with the new issuance. Upon redemption of the 4% senior unsecured notes, AM Best expects financial leverage to return to prior levels. Additionally, Aflac’s interest coverage is expected to remain near 22 times.
Aflac’s Credit Ratings, which were affirmed on April 24, 2019, recognize its diverse portfolio of supplemental health products in the United States and Japan. These products generate strong earnings and steady cash flows to the holding company, supporting its cash position and interest coverage measures.
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