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A.M. Best Co. has assigned a debt rating of “bbb” to the newly issued 30-year, $250 million 5.75% senior unsecured notes of
Unum Group (Unum) (headquartered in Chattanooga, TN) [NYSE: UNM]. The assigned outlook is stable. Unum’s existing financial strength, issuer credit and debt ratings remain unchanged.
A.M. Best expects the proceeds from the issuance to be used for general corporate purposes and notes that Unum’s next debt maturity occurs in late 2015. As of June 30, 2012, Unum’s debt-to-capital ratio was approximately 23%, which is slightly below the company’s guideline of 25%. The group’s financial leverage has remained at the lower end of its targeted range for some time and is generally conservative compared to its industry peers. With the additional debt, Unum’s financial leverage will be just over 25%. Although interest coverage will decline marginally, it remains solid at roughly seven times.