S&P rates AmFam, notes BBB

S&P said it assigned BBB ratings to AmFam Holdings Inc. and its planned senior unsecured notes. The agency expects AmFam to sell notes in two maturities.

“AmFam is an intermediate holding company and wholly owned subsidiary of American Family Insurance Mutual Holding Co., and it holds the entire stakes of its operating subsidiary American Family Mutual Insurance Co. S.I. (A/stable/--). Our rating on AmFam is three notches lower than the rating on the operating subsidiary. This reflects the structural subordination of holding company creditors to operating company policyholders and the restriction on dividend capacity to the holding company to service debt obligations,” S&P said in a press release.

Proceeds are expected to be used to repay a portion of borrowings from the Federal Home Loan Bank system, capitalize subsidiaries and general corporate purposes.

The outlook is stable, reflecting S&P’s expectation the group will maintain very strong capital adequacy, the agency said.

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