Moody’s rates Aflac notes Baa1 (hyb)

Moody's Investors Service said it assigned a Baa1 (hyb) debt rating to the ¥60 billion of 30-year fixed-rate subordinated notes issued by Aflac Inc.

Proceeds are expected to be used to fund all or a portion of the redemption of the outstanding $500 million 5.5% subordinated debentures due 2052 and for general corporate purposes. The debt offering is a drawdown from a shelf registration filed in May 2015.

Moody's said this will have a very modest impact on Aflac's strong financial flexibility given that proforma adjusted financial leverage is expected to remain in the mid 20% range following the issuance. This debt issuance is mostly offset by the repayment of the 2052 notes.

Pro forma for the debt issuance, the agency said it expects Aflac's earnings coverage to remain strong at over 14 times.

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