The St. Paul Cos. Series D medium-term notes were assigned a ‘BBB+’ senior debt rating by the Standard & Poor’s Ratings Services yesterday.
The notes will be issued periodically in a total amount up to $500 million as either fixed- or floating-rate notes, maturing in between nine months and 30 years.
The MTNs, to the extent issued, will be drawn down from St. Paul’s existing universal shelf registration, which has a total offering capacity of $1.68 billion, and will rank equally with St. Paul’s existing senior unsecured debt obligations. The universal shelf’s net capacity of about $683 million was amended Aug. 22, 2002 by $1 billion, resulting in an offering capacity of $1.68 billion.
St. Paul’s debt-to-capital ratio as of Dec. 31, 2002 was about 25 percent, which is supportive of the rating. If the full amount of the MTNs were issued, the ratio would be 28 percent, which is still inline for the rating.
S&P’s expects the debt-to-total capital ratio won’t 25 percent by the end of 2003. Similarly, the profitability and capitalization of St. Paul’s insurance operating companies should remain in line with expectations, as reflected in part by an expected capital adequacy ratio of more than 150 percent.
S&P’s said the St. Paul Cos. enjoys strong brand recognition in the domestic primary commercial market and should continue to benefit from a hardening market as well as more stringent policy terms and conditions.