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FOR IMMEDIATE RELEASE
OLDWICK - MAY 15, 2015 08:57 AM (EDT)
A.M. Best has assigned debt ratings of "bb+" to the $325 million 4.50% senior unsecured notes due 2020 and $500 million 5.25% senior unsecured notes due 2025 recently issued by CNO Financial Group, Inc. (CNO Financial) (Carmel, IN) [NYSE: CNO]. The outlook assigned to all ratings is positive. CNO Financial's existing issuer credit and debt ratings are unchanged.
The new issues are part of a recapitalization plan that includes a new $150 million senior unsecured revolver, $100 million of which will be drawn at closing. The company plans to use the roughly $925 million in proceeds to repay all of its outstanding borrowings, including fees and expenses, under its existing senior secured credit facility in addition to its outstanding 6.375% senior secured notes due in 2020. Any remaining proceeds will be used for general corporate purposes, which could include share repurchases.
A.M. Best anticipates that CNO Financial's adjusted financial leverage ratio will increase to approximately 19% as a net result of the recapitalization plan. Despite the modest increase in leverage, A.M. Best notes that the company's financial leverage and interest coverage ratios remain well within A.M. Best's guidelines for its current ratings.
CNO Financial and its subsidiaries provide interest-sensitive life insurance, traditional life insurance, fixed annuities, Medicare supplement insurance, long-term care insurance and other supplemental health products to middle-income pre-retiree and retired people within the United States.
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:
This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.