Moody's confirms UnumProvident

Moody's Investors Service said it confirmed the credit ratings of UnumProvident Corp. (senior debt at Ba1) and the insurance financial strength ratings (Baa1) of UNUM Life Insurance Co. of America and the company's other operating life insurance subsidiaries. The outlook is now negative.

This rating action concludes a review for possible downgrade on UnumProvident's ratings that began on Nov. 22, 2004.

Moody's said that when UnumProvident's ratings were placed on review last November, the primary driver was the heightened event risk associated with issues concerning broker compensation arrangements in the employee benefit market. Commenting on the rating confirmation, the rating agency said that significant uncertainty and potential risk remained relating to the broker compensation issues and the associated regulatory reviews and litigation. However, the severity of the outcomes for these issues is quite difficult to predict and the timeframe to resolve them could be protracted.

Ratings confirmed include UnumProvident Corp.'s senior unsecured debt of Ba1 and mandatorily convertible units/preferred stock of Ba1; UNUM Corp.'s senior unsecured debt of Ba1 and junior subordinated debt of Ba2; Provident Cos. Inc.'s senior unsecured debt of Ba1; and Provident Financing Trust I's preferred stock of Ba2.

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