NU Online News Service, March 13, 2003, 6:23 p.m. EST – UnumProvident Corp., Chattanooga, Tenn., says it’s pleased that Fitch Ratings, New York, and Standard & Poor’s Ratings Services, New York, are still giving its insurance units A’s for financial strength.
Both agencies lowered their financial-strength ratings for the insurance units one notch Thursday, from an earlier rating of A plus.
Both agencies lowered the parent company’s credit rating one notch, to BBB.
But the agencies say they limited the downgrades to one notch because they believe UnumProvident will soon raise capital on Wall Street.
“The current ratings reflect Standard & Poor’s expectation that Unum will be successful in its capital-raising initiatives within about one month,” S&P says in a discussion of its ratings moves.
Fitch says its current ratings assume that UnumProvident will use reinsurance, private placements and other strategies to raise capital and restructure its balance sheet.
UnumProvident is having temporary trouble raising capital because of discussions with the U.S. Securities and Exchange Commission about how it accounts for problems with speculative-grade securities, according to the rating agencies.