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A.M. Best Assigns Rating to Reinsurance Group of America, Incorporateda?s Senior Unsecured Notes Offering

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  Published in Business and Finance on Wednesday, May 25th 2011 at 6:55 GMT by Market Wire
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OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has assigned a debt rating of aa-a to the offering of $400 million 5.00% senior unsecured notes due 2021of Reinsurance Group of America, Incorporated (RGA) (St. Louis, MO) (NYSE: RGA). The assigned outlook is stable.

"Risk Management and the Rating Process for Insurance Companies"

The notes will rank pari passu to all other current and future senior debt of RGA. Proceeds from this offering are expected to be used to fund $200 million of senior notes maturing in December 2011, as well as for general corporate purposes.

RGAa™s debt servicing capabilities are viewed favorably by A.M. Best, with cash flows supported by profitable operations. RGAa™s financial leverage ratios remain within A.M. Besta™s guidelines for its current ratings. Moreover, based upon A.M. Besta™s analytical results, RGAa™s overall liquidity is favorable to meet its short-term funding needs, while long-term liquidity is more closely aligned with longer dated assets. RGA historically maintains strong asset liability management capabilities and sufficient statutory risk-adjusted capital positions.

These strengths are partially offset by challenges facing RGAa™s ability to improve market share in North America at a time when cession rates are very low, current credit market conditions are tight and the nature of the life reinsurance market is highly competitive. In addition, A.M. Best expects RGAa™s earnings to be pressured in the near to medium term due to the low interest rate environment and the global economic pressures.

The principal methodology used in determining these ratings is [ Besta™s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: a[ A.M. Besta™s Ratings & the Treatment of Debt ].a; a[ Equity Credit for Hybrid Securities ]a; aRisk Management and the Rating Process for Insurance Companiesa; and aAssessing Country Risk.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is the worlda™s oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].

Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.