Business Wire 15-Feb-2018 12:49 PM
OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Besthas placed under review with developing implications the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of a- for the property/casualty subsidiaries and affiliated insurance companies of Kemper Corporation (Kemper Corp.) [NYSE: KMPR],collectively referred to as Kemper Property & Casualty Group. A.M. Best also has placed under review with developing implications the FSR of A- (Excellent) and the Long-Term ICRs of a- for Kemper Corp.s life/health subsidiaries, collectively referred to as Kemper Life & Health Group (Kemper L&H). Concurrently, A.M. Best has placed under review with developing implications the Long-Term ICR of bbb- and the Long-Term Issue Credit Ratings (Long-Term IR) of Kemper Corp., the ultimate parent. All companies are headquartered in Chicago, IL, unless otherwise specified. (See below for a detailed listing of the companies and ratings.)
This Credit Rating (rating) action follows the Feb. 13, 2018, announcement of an agreement by Kemper Corp. to purchase Infinity Property & Casualty Corporation (Infinity) [NASDAQ: IPCC]. The transaction was valued at approximately $1.4 billion, or $129.00 per Infinity share; the exchange ratio for stock consideration to be issued in the merger is fixed and was determined based on Kempers 20-trading day volume weighted average price as of Feb. 12, 2018, of $64.40. This represents an approximately 33% premium to Infinitys closing price of $97.05 as of Feb. 12, 2018. Based on Kempers Feb. 12, 2018, closing stock price of $57.75, the implied total consideration is approximately $1.3 billion, or $121.01 per Infinity share, an approximately 25% premium to Infinitys closing price of $97.05 as of Feb. 12, 2018. This deal is expected to close in the third quarter of 2018 and is expected to be financed as a cash and stock transaction.
The developing implications status reflects the need for A.M. Best to evaluate Kempers plans to integrate Infinity into existing insurance operations, as well as to ensure that risk-adjusted capitalization is maintained at levels in line with its current ratings. Additionally, A.M. Best needs to gain greater insight into the overall impact on the companys business profile, business writings and operating performance. The ratings will remain under review pending the completion of the transaction and the conclusion of A.M. Bests discussions with management.
The FSR of A- (Excellent) and the Long-Term ICRs of a- have been placed under review with developing implications for the following members of the Kemper Property & Casualty Group:
The FSR of A- (Excellent) and the Long-Term ICRs of a- have been placed under review with developing implications for the following members of Kemper Life & Health Group:
The following Long-Term IR has been placed under review with developing implications:
-- bbb- on $450 million 4.35% senior unsecured notes, due 2025
-- bb+ on $150 million 7.375% subordinated debentures, due 2054
The following indicative Long-Term IRs for securities available under the shelf registration have been placed under review with developing implications:
-- bbb- on senior unsecured debt
-- bb+ on subordinated debt
-- bb on preferred stock
This press release relates to Credit Ratings that have been published on A.M. Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings . For information on the proper media use of Bests Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Bests Credit Ratings and A.M. Best Rating Action Press Releases .
A.M. Best is the worlds oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180215006061/en/
A.M. Best Michael T. Venezia, +1-908-439-2200, ext. 5034 Senior Financial Analyst P/C firstname.lastname@example.org or Bruno Caron, FSA, MAAA, +1-908-439-2200, ext. 5144 Financial Analyst L/H email@example.com or Christopher Sharkey, +1-908-439-2200, ext. 5159 Manager, Public Relations firstname.lastname@example.org or Jim Peavy, +1-908-439-2200, ext. 5644 Director, Public Relations email@example.com
Source: A.M. Best
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