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CHATTANOOGA, Tenn., Nov. 1, 2006 — UnumProvident Corporation (NYSE: UNM), announced today the completion of its first securitization transaction. The Company, through its subsidiary Tailwind Holdings, LLC, a newly formed Delaware limited liability company, issued $130 million of senior, secured notes in a private placement. The notes are guaranteed by MBIA Insurance Company with respect to both interest and principal repayment. The Company's inaugural offering was also the first of its kind in the life insurance sector involving the securitization of seasoned group long-term income protection claim reserves. Goldman Sachs was the sole structuring agent.
Commenting on the securitization, Joseph M. Zubretsky, Senior Executive Vice President, Finance, Investments and Corporate Development at UnumProvident, stated, "I am pleased to report the successful completion of our first securitization transaction. Not only was this our inaugural securitization, it was also the first of its type in our industry. By using financial technology similar to what has been employed in Regulation XXX transactions, we were able to more efficiently capitalize our long-term disability business and free up capital in our operating companies. This offering increases our financial flexibility as we continue to implement long-term capital management strategies, and with this inaugural transaction completed, we will now turn our attention to the application of this new financial technology to our closed individual income protection block of business."
The transaction closed on November 1, 2006 and based on MBIA's financial guarantee, the notes will carry Aaa/AAA/AAA ratings from Moody's Investors Service, Standard & Poor's Rating Service and Fitch Ratings. The transaction will bolster the capital position of Unum America Life Insurance Company, a subsidiary of UnumProvident Corporation.
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