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FOR IMMEDIATE RELEASE
OLDWICK - JULY 24, 2015 04:46 PM (EDT)
A.M. Best has placed under review with positive implications the financial strength rating of A (Excellent) and the issuer credit ratings (ICR) of "a" of the insurance subsidiaries of StanCorp Financial Group, Inc. (StanCorp) [NYSE:SFG]: Standard Insurance Company and The Standard Life Insurance Company of New York. Collectively, the group is referred to as Standard Insurance Group (Portland, OR). A.M. Best also has placed under review with positive implications the ICR of "bbb" and the issue ratings of StanCorp. (See below for a detailed list of the companies and ratings).
The under review status follows the announcement that Meiji Yasuda Life Insurance Company (Meiji Yasuda) has entered into a definitive agreement to acquire a 100% stake in StanCorp in an all-cash transaction. The acquisition price is $115 (USD) per share in cash totaling $5.0 billion (USD) in transaction value (approximately JPY 624 billion). The transaction includes a post-announcement "go-shop clause," which gives an opportunity for other bidders to determine whether they are interested in acquiring StanCorp during a 25-day period.
StanCorp is expected to become Meiji Yasuda's primary U.S. presence in the group marketplace. Meiji Yasuda currently has the largest share in group insurance in the Japanese market. StanCorp's management team and organizational structure is expected to remain intact.
The ratings will remain under review pending the transaction's closing, which is expected in the first quarter of 2016. A.M. Best plans to hold discussions with management regarding capital planning and a review of its strategic plans during this time. The transaction is subject to approval by stockholders, as well as state insurance departments in Oregon and New York, and other regulators.
The following issue ratings have been placed under review with positive implications:
StanCorp Financial Group, Inc.—
— "bbb" on $250 million 5.00% senior unsecured notes, due 2022
— "bb+" on $300 million 6.90% junior subordinated debentures, due 2067 (currently $253 million outstanding)
The following shelf ratings have been placed under review with positive implications:
StanCorp Financial Group, Inc.—
— "bbb" on senior unsecured debt
— "bbb-" on subordinated debt
— "bb+" on preferred stock
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.