S&P rates Aflac notes A-

S&P said it assigned an A- senior unsecured debt rating to Aflac Inc.'s expected senior notes issuance.

This issue is expected to total about $700 million and be comprised of two series of senior notes due 2026 and 2046.

The proceeds will be used to repay the company’s $650 million of 2.65% senior notes due February 2017, S&P said.

These new senior notes will be unsecured obligations of Aflac and each series will rank equally in right of payment with any of the company's existing and future unsecured senior debt, the agency said.

S&P also said it these senior notes will be structurally subordinated to all obligations of the company’s operating subsidiaries and not guaranteed by the subsidiaries.

Excluding the $650 million notes and including this $700 million issuance, total debt outstanding would be $5.1 billion, which results in a debt leverage of about 24% and financial leverage of 26%, the agency said.

This remains within expectations for the company’s current ratings, S&P said, and its fixed-charge coverage is expected to remain strong.

The outlook on Aflac is stable based on its fundamental credit profiles and stable outlook on Japan’s sovereign ratings, the agency added.

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