UPDATE 1-Torchmark says has enough liquidity to retire CP, debt

lunes 8 de junio de 2009 13:33 CEST

* Says reduced CP by $41 mln from March

* Says net realized losses fell $500 mln since Q1

June 8 (Reuters) - Torchmark Corp (TMK.N: Cotización) said it has enough liquidity to retire both $233 million of commercial paper (CP) and $99 million of debt maturing in August, in response to a downgrade of the life and health insurer and its subsidiaries by Fitch Ratings.

On Friday, Fitch Ratings downgraded Torchmark saying the company may have difficulty rolling over the maturing commercial paper, further pressuring statutory capital levels.

Torchmark said it had $166 million of free cash flow available at June 5, and received commitments for $145 million from six banks for a new two year term loan facility.

The company, which mainly serves middle- and low-income customers, has also reduced commercial paper outstanding by $41 million since March 31 to $233 million at June 5, Torchmark said.

The company, which had $35 million of commercial paper maturing on June 29 in the Commercial Paper Funding Facility (CPFF), said it no longer qualifies to issue commercial paper in the CPFF due to a downgrade of the CP rating to F2 from F1 by Fitch.

The McKinney, Texas-based company also said net realized losses fell by $500 million from the first quarter to about $1.7 billion at May 31, and bonds at amortized cost were $9.4 billion, or 91 percent of invested assets.

Shares of the company closed at $39.28 Friday on the New York Stock Exchange. They traded as high as $63.40 last September, but fell to a low of $16.16 in March. (Reporting by Anurag Kotoky in Bangalore; Editing by Ratul Ray Chaudhuri)