Fitch Ratings has assigned an ‘A’ rating to the following issues for The Allstate Corporation (Allstate):
–Series A 6.50% fixed- to floating-rate junior subordinated debentures due 2067
–Series B 6.125% fixed- to floating-rate junior subordinated debentures due 2067.
No action was taken on the ratings of The Allstate Corporation (Allstate) and its property/casualty and life subsidiaries (see list below). The Rating Outlook remains Stable.
Allstate’s junior subordinated debentures received 75% equity credit based on Fitch’s hybrid methodology. The primary factors used to determine equity credit included: loss absorption provided by the junior subordinated standing of the securities, the ability to defer dividends for up to 10 years and the fact that the step up provision from fixed to floating after 10 years was not considered onerous.
Proforma equity-adjusted debt-to-total capital as of March 31, 2007 was 17.4%, which remains comfortably within expectations for financial leverage. In addition, fixed charge coverage is estimated to remain above 15 times (x), which is considered quite strong.
Fitch currently rates Allstate and subsidiaries as follows:
The Allstate Corporation
–Issuer Default Rating (IDR) ‘AA-‘.
–Commercial paper ‘F1’.
Allstate Insurance Company
Allstate County Mutual Insurance Co.
Allstate Indemnity Co.
Allstate P&C Insurance Co.
Allstate Texas Lloyd’s
Deerbrook Insurance Co.
Encompass Home and Auto Insurance Co.
Encompass Independent Insurance Co.
Encompass Insurance Company of America
Encompass Insurance Company of Massachusetts
Encompass Property and Casualty Co.
–Insurer financial strength rating ‘AA+’.
Allstate Life Insurance Co.
Allstate Life Insurance Co. of NY
American Heritage Life Insurance Co.
Lincoln Benefit Life Insurance Co.
–Insurer financial strength rating ‘AA’.
Allstate Life Global Funding Trusts Program ‘AA’.