Fitch Rates StanCorp Financial Group’s Senior Notes ‘BBB’
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Fitch expects proceeds from the debt issuance to be used to fund the repayment of
Fitch considers StanCorp's new debt offering to be a refinancing. As such, its fundamental effect on the company's financial leverage will be insignificant. Financial leverage was estimated at 24% at
Fitch's ratings on StanCorp reflect a moderate decline in the company's overall operating profitability in the first half of 2012 relative to the same period in 2011, which is in line with Fitch's expectations, and essentially stable financial leverage.
StanCorp's historically favorable earnings, driven by its group long-term disability (LTD) and group life insurance business, have weakened in recent years due to intense competitive conditions and unfavorable claims trends driven by poor economic conditions. The company reported pretax operating income of
StanCorp's statutory total adjusted capital declined modestly in 2011 to
StanCorp's ratings are supported by the company's adequate balance sheet fundamentals and solid competitive position in the U.S. group insurance market. The company's balance sheet fundamentals reflect strong asset quality, good risk adjusted capitalization, and reasonable financial leverage.
The key rating triggers that could result in an upgrade include:
--A substantial increase in run-rate risk-adjusted capital above 350%, with no significant deterioration in capital quality.
--A long-term improving trend in the group benefit ratio substantially below its historic baseline of about 76%.
The key rating triggers that could result in a downgrade include:
--A prolonged deterioration in the company's group benefit ratio above the 2011 level of 83%.
--GAAP-based interest coverage below 6x for an extended period of time.
--An increase in financial leverage above 30%.
--A decrease in RBC below 300%, or a significant decrease in the quality of capital supporting the company's RBC.
--A significant deterioration in the performance of the company's commercial mortgage loan portfolio.
Fitch rates the following:
StanCorp Financial Group
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Additional information is available at 'www.fitchratings.com'. The ratings above were unsolicited and have been provided by Fitch as a service to investors.
--'StanCorp Financial Group Inc., and Insurance Subsidiaries' (
--'Insurance Rating Methodology' (
StanCorp Financial Group (And Insurance Subsidiaries)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678801
Insurance Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018
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Fitch Ratings
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Source: Fitch Ratings
Copyright: | Copyright Business Wire 2012 |
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