AM Best Assigns Issue Credit Rating to Ameriprise Financial, Inc.’s New Senior Unsecured Notes

Rhea-AI Summary

AM Best has assigned a Long-Term Issue Credit Rating of “a-” (Excellent) to Ameriprise Financial's recently announced $750 million, 5.15% 10-year senior unsecured notes due May 15, 2033. The stable outlook on this rating indicates a solid financial positioning. The proceeds will likely be used to repurchase existing $750 million, 4.0% unsecured notes maturing in October 2023. While debt leverage will temporarily increase, it is expected to return to the 30% range. Ameriprise holds a strong liquidity position with $6.9 billion in cash equivalents and reported $2.6 billion pre-tax adjusted operating income for 2022.

Positive

• Assigned Long-Term Issue Credit Rating of 'a-' (Excellent)
• Proceeds from debt issuance expected to finance repurchase of existing unsecured notes
• Liquidity position is strong with $6.9 billion in cash equivalents
• 2022 pre-tax adjusted operating income was $2.6 billion
• Advice and wealth management segment reported a margin high of 30%

Negative

• Debt leverage expected to increase temporarily before stabilization

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Long-Term Issue Credit Rating of “a-” (Excellent) to the recently announced $750 million, 5.15% 10-year senior unsecured notes, due May 15, 2033, issued by Ameriprise Financial, Inc. (Ameriprise Financial) (headquartered in Minneapolis, MN) [NYSE: AMP]. The outlook assigned to the Credit Rating (rating) is stable. All other ratings of Ameriprise Financial and its subsidiaries are unchanged.

The proceeds from this debt issuance are expected to be used for general corporate purposes, which may include repurchasing all of Ameriprise’s $750 million, 4.0% senior unsecured notes maturing in October 2023. The impact of this issuance on Ameriprise’s debt leverage is expected to increase temporarily over the near term as a higher leverage ratio will be realized prior to the note redemption before decreasing to the lower 30% range; AM Best expects the interest coverage with this debt issue to remain very favorable.

Ameriprise’s liquidity position is strong, with the parent company holding highly liquid cash and cash equivalents of $6.9 billion at year-end 2022. The company’s full-year 2022 pre-tax adjusted operating income was $2.6 billion and net cash from operations was $4.4 billion. In Ameriprise’s most recent disclosure, a primary driver of the results was attributed its advice and wealth Management segment, in which it reported reaching a new margin high of 30%; other business segments have also done well. The company’s retirement services segment increased 25% year-over-year to reach $229 million, driven by higher investment income and lower amortization of deferred acquisition costs offset by lower sales levels.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Wayne Kaminski

Senior Financial Analyst

+1 908 439 2200, ext. 5061

wayne.kaminski@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jacqalene Lentz

Director

+1 908 439 2200, ext. 5762

jacqalene.lentz@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best

FAQ

What is Ameriprise Financial's latest credit rating?

AM Best has assigned a Long-Term Issue Credit Rating of 'a-' (Excellent) to Ameriprise Financial.

What is the amount of the new senior unsecured notes issued by Ameriprise Financial?

Ameriprise Financial issued $750 million in senior unsecured notes.

When do the new senior unsecured notes by Ameriprise Financial mature?

The notes are due on May 15, 2033.

What will the proceeds from Ameriprise Financial's debt issuance be used for?

The proceeds are expected to be used for general corporate purposes, including repurchasing existing unsecured notes.

What is Ameriprise Financial's liquidity position?

At year-end 2022, Ameriprise held $6.9 billion in cash and cash equivalents.

How much was Ameriprise Financial's pre-tax adjusted operating income in 2022?

Ameriprise Financial's pre-tax adjusted operating income for 2022 was $2.6 billion.