Aflac could take opportunities to revise overall leverage structure

By Devika Patel

Knoxville, Tenn., Dec. 2 – Aflac Inc. could revamp its leverage structure in light of the company’s high coverage ratios if potential opportunities arise, an executive said Friday.

“Aflac has one of the highest fixed-charge coverage ratios in the industry, for very obvious reasons,” executive vice president and chief financial officer Frederick J. Crawford said on the company’s conference call announcing its outlook on Friday.

“We generate strong cash flow but we also have a very low interest expense because we borrow in yen, and so we tend to have a leverage of 21%, which is quite customary and I think appropriate, but I think a very strong coverage ratio.

“Part of what I see as the long-term benefits of this structure, is as we get into a reliable and predictable and transparent set of cash flows, we have an opportunity to look at our overall leverage structure and cost to capital structure and see whether there’s any opportunity there.

“I can’t call that now, I don’t want to predict that now, but certainly as a financial engineer, that’s what we’re hoping to achieve over time,” Crawford said.

The Columbus, Ga.-based company provides supplemental health and life insurance.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.