AFLAC Prices 50 Billion Yen of Senior Notes

Borrowing at low rates isn’t always a bad thing:

Aflac Incorporated announced today that it has priced yen-denominated (Samurai) bonds totaling 50 billion yen (par value), or approximately $625 million at the current yen/dollar exchange rate. The issuance consists of 28.7 billion yen ($359 million) of three-year fixed-rate notes with a coupon of 1.47%; 15.8 billion yen ($197 million) of five-year fixed-rate notes with a coupon of 1.84%; and 5.5 billion yen ($69 million) of three-year floating-rate notes with a coupon of three-month Japanese yen Libor plus 1.15%. The company anticipates using the proceeds from this issuance primarily for debt repayment and general corporate purposes. The bonds will be issued in Japan under a previously announced shelf registration filed with Japanese regulatory authorities. This issuance is the first issuance from the November 2009 shelf registration.

Commenting on the pricing of the debt issue, Aflac Incorporated President and Chief Financial Officer Kriss Cloninger III commented: “This debt issuance will facilitate our repayment of approximately 35 billion yen of Uridashi notes that mature in September 2011, and further strengthens our liquidity position.”

The yen’s impact on 2011′s operating earnings is pretty straightforward. At an exchange rate of 87.69 yen per dollar, the earnings will grow by 8% to $5.97 per share for 2011. Every one point below that adds roughly five cents per share to AFL’s bottom line.

Posted by on June 29th, 2011 at 10:40 am

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