A.M. Best Assigns Indicative Ratings to Unum Group’s New Shelf Registration

A.M. Best has assigned indicative ratings of “bbb” to senior unsecured debt, “bbb-” to subordinated debt and “bb+” to preferred stock of the recently filed universal shelf registration by Unum Group (Unum) (headquartered in Chattanooga, TN) [NYSE:UNM]. The new registration replaces Unum’s previous shelf, which recently expired. The outlook assigned to these ratings is stable. Consequently, A.M. Best has withdrawn the indicative ratings related to the previous shelf registration. All remaining ratings of Unum and its subsidiaries are unchanged.

Unum’s financial leverage as of Sept. 30, 2014, is reasonable for its ratings at roughly 23%, while fixed charge coverage remains strong. The organization has excellent financial flexibility as it maintains over $500 million of cash and short-term investments at the holding company – enough to cover over two and a half years of interest expense.

Unum’s current ratings reflect its strong franchise, solid capitalization, diversified earnings sources and favorable operating performance. In addition, the investment portfolio provides a somewhat stable source of income due to manageable levels of impairments.

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. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Analyzing Insurance Holding Company Liquidity
• Equity Credit for Hybrid Securities
• Insurance Holding Company and Debt Ratings

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.