Moody's rates Unum note Ba1

Moody's Investors Service said it assigned a Ba1 senior debt rating to Unum Group's (formerly UnumProvident Corp.) $300 million 5.859% senior notes due May, 2009.

The outlook is negative.

Proceeds from the issue will be held in trust until May 15, at which time Unum will use the proceeds to pay for new Unum common stock to be issued to holders of its outstanding 8.25% adjustable-conversion-rate equity security units (ACEs) issued in May, 2004 under the mandatory stock purchase feature of the ACEs security.

Unum participated in the remarketing, purchasing and retiring of $150 million of the senior notes. As a result, the agency said it anticipates only $150 million of the issue will be outstanding going forward and that the partial retirement of this debt is a positive credit event.

The ratings are based on the company's leading market share in the group long-term and individual disability markets, the company's access to a huge claims database, its focus on claims management and return-to-work programs, its position in the group life market and a solid presence in the growing worksite marketing area, Moody's said.

However, these strengths are tempered by Unum's concentration of earnings in the group and individual disability businesses, continuing competition in the group disability and group life markets and the group's moderately high financial leverage and constrained fixed charge coverage, the agency said.

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