Moody's rates Aflac notes A3

Moody's Investors Service said it assigned an A3 debt rating with a stable outlook to the $700 million of 3.625% fixed-rate senior notes due 2023 to be issued by Aflac, Inc. The outlook is stable.

The proceeds of the notes are expected to be used for the repayment of ¥34.2 billion of the company's Samurai notes due July 2014 and $300 million principal amount of 3.45% senior notes due August 2015 and for general corporate purposes, including potential capital contributions to subsidiaries.

Moody's said that Aflac's A3 senior debt rating reflects Aflac's very strong franchise and market position in supplemental health insurance in both Japan and the United States, well-established niche distribution channels, strong and predictable earnings capacity and strong capital adequacy.

Offsetting these strengths are Aflac's limited product diversification and concentrated investment portfolio, including European sovereign and financial institution exposures, the agency said.

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