Moody's rates Ohio National

Moody's Investors Service said it assigned a Baa1 senior debt rating to the $300 million of 10-year fixed-rate senior unsecured notes to be issued by Ohio National Financial Services, Inc.

The outlook is stable.

Moody's said that Ohio National intends to use a portion of the debt proceeds to prefund all of the $157.5 million of outstanding 7% senior notes coming due in 2011. The remaining proceeds are expected to be used for general corporate purposes.

Ohio National's debt issuance is a prudent step in managing its upcoming debt maturity, Moody's said. While the incremental debt not used to refinance the debt maturity will modestly increase financial leverage and lower coverage, the extension of the maturity improves Ohio National's financial flexibility, the agency added.

Moody's said these strengths are partially offset by the company's income volatility, mainly due to above average impairments over the past two years.

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