A.M. Best Co. has affirmed the debt rating of “a-” for the reopened 4.00% 10-year unsecured senior notes, due 2023 of Ameriprise Financial, Inc. (Ameriprise Financial) (headquartered in Minneapolis, MN) [NYSE: AMP]. The outlook is stable.
The debt rating applies to the recently announced $150 million 4.00% senior unsecured notes, due 2023, to be issued by Ameriprise Financial, as well as its existing $600 million 4.00% senior unsecured notes, due 2023, issued September 3, 2013. The additional notes being offered constitute a further issuance of, and are fungible with, the existing notes. The $150 million of additional notes were priced at 101.96% with a yield to maturity of 3.76%. These additional notes offer terms identical to the existing notes issued on September 3, 2013, with the exception of the issue date and offering price. The existing financial strength, issuer credit and debt ratings of Ameriprise’s domestic life/health insurance companies are unchanged.
Proceeds from the issuance are expected to be used for general corporate purposes. A.M. Best notes that Ameriprise recently completed a make whole on $350 million of the 5.65% senior notes, due 2015. With this issuance and the warehousing of the net proceeds, A.M. Best calculates Ameriprise Financial’s debt-to-capital ratio to initially rise to approximately 24%, which remains in line with the company’s rating guidelines. The small increase in Ameriprise Financial’s financial leverage ratio upon issuance, the pro forma impact on financial leverage, along with interest expense coverage, is expected to remain well within A.M. Best’s expectations for the rating.
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.