1. AM Best assigns 'a-' rating to AFG's new $350 million notes. 2. AFG's leverage ratio will rise to nearly 30%, remaining guideline-compliant. 3. Strong interest coverage ratio over 10 times signals robust financial health. 4. Positive operating earnings showcase AFG's strong underwriting results. 5. Proceeds will fund share repurchase, indicating confidence in stock value.
The positive credit rating and strong financial metrics suggest underlying strength, potentially boosting investor confidence. Historical data shows that issuances accompanied by solid credit ratings often correlate with stock price increases.
The article contains key financial metrics and projections influencing AFG's stock performance, highlighting credible ratings and buyback strategies.
Immediate impacts can arise from investor reactions to favorable ratings and share repurchase announcements. Previous similar cases indicate quick price movements following such news.
AM Best has assigned a Long-Term Issue Credit Rating of "a-" (Excellent) to the recently issued $350 million, 5% 10-year senior unsecured notes due September 2035, issued by American Financial Group, Inc. (AFG) (Cincinnati, OH) (NYSE:AFG). The outlook assigned to this Credit Rating (rating) is stable. The existing ratings of AFG and its subsidiaries are unchanged.
AFG plans to use the net proceeds of the offering for general corporate purposes including share repurchase. Following the new issuance, AFG's unadjusted financial leverage ratio will increase modestly to nearly 30% and remain within AM Best's guidelines for AFG's current ratings. AFG's interest coverage ratio will remain strong at over 10 times.
AFG continues to benefit from consistently positive operating earnings of its insurance subsidiaries, which are reflective of profitable underwriting results supported by a diversified product portfolio and business profile through its multiple distribution platforms, in addition to significant investment income.
This press release relates to Credit Ratings that have been published on AM 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 see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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Raymond Thomson, CPCU, ARe
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