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