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Fitch rates Ohio Casualty notes
Fitch Ratings said it has assigned a BBB- rating to Ohio Casualty Corp.'s new issuance of $200 million of senior unsecured notes due 2014. In addition, Fitch affirmed Ohio Casualty's BBB- long-term issuer rating as well as the BBB- rating on the outstanding senior convertible notes.
The outlook is stable.
According to Fitch, the ratings reflect Ohio Casualty's increased strategic focus on profitability, improving underwriting results and reasonable financial leverage. Weighted against these positives are poor operating results in recent years, driven by adverse reserve development for prior years' losses and a high operating expense ratio relative to peers and the industry.
The proceeds from the issuance will be used to repay the existing $201.3 million principal amount of 20-year convertible notes, which are redeemable on March 23, 2005 at 102% of the principal amount. Until this time, the proceeds will be invested in short-term, high-quality fixed-income investments at Ohio Casualty.
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