TEXT-S&P rates Allstate junior subordinated debt 'BBB'

Thu Jan 3, 2013 1:06pm EST

Jan 3 - Standard & Poor's Ratings Services said today that it assigned its
'BBB' debt rating to Allstate Corp.'s (NYSE:ALL) junior subordinated
debentures up to $1 billion maturing in 2053. We expect the debentures to
qualify for intermediate content treatment under our criteria for hybrid
securities, based on a review of preliminary documentation.

The company intends to use the net proceeds from this issue for general 
corporate reasons including share repurchases. Adjusted debt and financial 
leverage as of Sept. 30, 2012, were conservative at 23.2% and 26.6%, 
respectively. Fixed-charge coverage is very strong, improving to 10.3x during 
the first nine months of 2012 from 2.7x in full-year 2011. On a pro-forma 
basis we expect financial leverage to be near 30% and fixed-charge coverage to 
be near 9x for 2012 and 2013.

The counterparty credit rating on Allstate Corp. and the insurer financial 
strength ratings on its property-liability insurance operating companies are 
based on its very strong competitive position and well-recognized franchise in 
the U.S. personal-lines sector. Strong but volatile operating results, capital 
adequacy that is deficient at the rating level, and an aggressive 
capital-management strategy offset the positive factors. Allstate also has 
earnings volatility from exposure to catastrophe, and investment-portfolio 
losses and competitive pressures in its standard auto book because of 
catastrophe-reduction efforts in the homeowners' book.

RELATED CRITERIA AND RESEARCH
Hybrid Capital Handbook: September 2008 Edition, Sept. 15, 2008

RATINGS LIST
Allstate Corp.
 Counterparty Credit Rating              A-/Negative/A-2

New Rating
Allstate Corp.
 Jr. Sub. Notes Due 2053                 BBB

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.