Aflac reduces risk exposure by selling securities issued by Tunisia, Lloyds, RBS, others

By Toni Weeks

San Diego, May 17 - Aflac Inc. said it has continued to reduce the risk exposure in its investment portfolio by selling peripheral Eurozone investments, perpetual securities, investments in banks/financial institutions and securities rated below investment grade and by decreasing large concentrated positions.

According to an 8-K filing with the Securities and Exchange Commission, the following transactions were part of Aflac's risk-reduction effort:

• The company realized a pretax loss of $72 million on the sale of its holdings in Irish Life & Permanent plc, which had a par value of $445 million and an amortized cost and fair value of $110 million at March 31;

• The company realized a pretax loss of $5 million through the sale of a portion of its holdings in the Republic of Tunisia, which had a par value of $57 million, an amortized cost value of $58 million and a fair value of $55 million at March 31;

• The company realized a pretax gain of $18 million on the sale of its tier 1 perpetual securities issued by Lloyds Banking Group plc. The securities had a par value of $33 million, an amortized cost value of $7 million and a fair value of $26 million at March 31;

• The company realized a pretax gain of $28 million on the sale of its tier 1 perpetual securities issued by the Royal Bank of Scotland Group plc. The securities had a par value of $58 million, an amortized cost of $19 million and a fair value of $47 million as of March 31;

• The company realized a pretax gain of $200,000 on the sale of a portion of its holdings in Israel Electric Corp., which had a par value and amortized cost value of $10 million and fair value of $11 million at March 31; and

• The company exercised a put option on its below-investment-grade investment in CP-Comboios de Portugal EPE, which had a $180 million par value and amortized cost and fair value at March 31, and generated no gain or loss on the transaction.

The insurance company is based in Columbus, Ga.

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