A.M. Best Co. has assigned a debt rating of “bbb” to the recently issued $400 million 5.70% senior unsecured notes, due 2043 of ING U.S., Inc. (ING U.S.) (headquartered in New York, NY). The notes were issued in a 144A private placement and guaranteed by Lion Connecticut Holdings, Inc. The assigned outlook is stable. ING U.S., which plans to be rebranded as Voya Financial, completed its initial public offering (IPO) in early May, and trades on the New York Stock Exchange under the symbol “VOYA.”
ING U.S. intends to use the note proceeds for general corporate purposes including the repayment of intercompany borrowings. Following the May 2013 IPO, ING Groep N.V.’s (ING Group) (Netherlands) ownership of ING U.S. was reduced to approximately 71%.
The rating recognizes ING U.S.’ strong market position in the life insurance and retirement markets, profitable operating results and its sound level of risk-adjusted capital. The assigned rating also reflects A.M. Best’s favorable view of ING U.S. management’s execution on its capital plans. Over the last 12 months, ING U.S. has issued $2.6 billion of senior notes and hybrid securities, while raising approximately $1.5 billion from the IPO of which about $600 million was retained by ING U.S. These transactions have enabled ING U.S. to ladder its debt maturities and take advantage of the lower cost of funds. ING U.S.’ financial leverage and earnings before interest and taxes interest coverage remain within A.M. Best’s guidelines for its current ratings. Moreover, ING U.S.’ financial flexibility has been enhanced as the ordinary dividend capacity of the insurance operating companies was recently restored. A.M. Best notes that ING Group has until the end of 2016 to complete the sale of its ownership in ING U.S.
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.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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.