S&P rates UnumProvident

Standard & Poor's said it assigned its BB+ senior debt rating to UnumProvident Corp.'s $300 million 8.25% adjustable conversion rate equity security units.

The equity units consist of a stock purchase contract and a senior note. The notes mature in May 2009, two years following the mandatory equity purchase.

"The rating reflects concerns about the company's risk controls and valuation practices, given significant reported earnings volatility and reserve charges over the last several quarters," noted S&P credit analyst Rodney A. Clark.

"Somewhat offsetting these factors are strong capital adequacy following several recent capital initiatives, substantial scale and market penetration in the group and individual disability insurance areas, and an improved investment risk profile."

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