Fitch affirms Horace Mann

Fitch Ratings said it affirmed and removed Horace Mann Educators Corp.'s and its insurance subsidiaries from rating watch negative, including the senior unsecured notes at BBB.

The outlook is stable.

Fitch originally placed the ratings on rating watch negative on Dec. 10, 2018, following the company's announcement of an agreement to acquire NTA Life Insurance Co. for $405 million.

The agency said the removal of the rating watch reflects a review of updated transaction-related financing plans, including an announced reinsurance transaction of a block of fixed annuities to Reinsurance Group of America, Inc., allowing the redeployment of capital via dividend to the holding company in support of the NTA acquisition.

The remaining purchase price will be funded by $135 million in bank revolver debt.

“The pro forma financial leverage ratio (FLR) at March 31, 2019 of 24%, remains within ratings expectations, but is offset in part by reduced financial flexibility from the draw on available bank lines as a term loan,” the agency said in a news release.

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