OREANDA-NEWS. S&P Global Ratings said today that it has assigned its 'A' rating to Ameriprise Financial Inc.'s (AMP) senior unsecured debt issuance of up to $500 million. The issuance has a 10-year maturity, and the company will use the proceeds for general corporate purposes. We believe that AMP has been opportunistic in its issuances to take advantage of low interest rates.

AMP maintains a competitive business profile encompassing a diversified product offering, including advice and wealth management, asset management, annuities, and protection products, which it sells through its well-branded distribution network. AMP's financial profile continues to be very strong. While consolidated financial leverage will increase with this issuance, we believe the company's capital structure and financial flexibility are adequately positioned to absorb the incremental debt. We expect debt-to-capital (including unfunded postretirement liabilities and operating leases) to increase to 33%-35% post-issuance, compared with debt-to-capital of about 31% as of March 31, 2016. We expect EBITDA interest coverage to be above 10x for full-year 2016, which is conservative for the rating level. Pretax operating income (EBIT) was approximately $970 million in the first six months of 2016 compared with $1.1 billion for the same period in 2015.

We expect AMP to maintain its very strong competitive position, generating positive net revenue and a return on assets of at least 1%. We also believe AMP's primary protection company, RiverSource Life Insurance Co., will maintain sufficient capital for the 'AA' rating category.