Fitch Assigns 'A-' To UnumProvident's Senior Debt

Business Wire, July 2, 2002

Business Editors

Fitch Ratings assigns an 'A-' rating to UnumProvident Corp's (UNM) $150 million 7.25% public income notes (PINES) due 2032. The Rating Outlook is Stable.

Fitch expects UNM to wholly use the proceeds to retire a portion of the approximately $349 million of commercial paper outstanding. PINES allow the company to sell long dated paper with early call features, and are targeted towards retail investors. The 30-year senior unsecured notes are being issued under the company's $1.0 billion shelf registration filed in August 2000, and are the second debt issue UNM has offered in the last 30 days. On June 13, 2002, UNM issued $250 million of 30-year senior unsecured notes, using the proceeds to pay down a portion of its short-term debt. The latest note issue will rank pari passu to all other senior unsecured debt.

Since total outstanding debt remains the same, there is no material change in leverage or coverage ratios expected as a result of the refinance. Financial leverage, as defined by the ratio of debt to total capital, is expected to increase slightly to approximately 28% compared to 27% at year-end 2001. The increase is attributable to UNM's lower equity position of $5.7 billion at 3/31/02 compared to $5.9 billion at year-end 2001.

Fixed charge coverage of 3.6x (times) through 3/31/02 is down from 5.8x at year-end 2001, due mainly to realized investment losses. On a pretax basis, excluding realized gains/losses, UNM earned $221.4 million through the first quarter of 2002, compared to $226.7 million at the end of the first quarter 2001. Fitch expects financial leverage to decline to 25%-26% over the next couple of years from the combination of growth in retained earnings and modest debt reduction.

UnumProvident was formed through the June 1999 merger of Unum Corporation and Provident Companies, Inc., combining the nations largest providers of group disability and individual disability and long term care. UNM reported total assets of $42.4 billion and shareholders equity of $5.7 billion as of March 31st, 2002.

Entity/Issue Type Action Rating/Outlook

UnumProvident Corp.

-- Senior debt Affirm 'A-'/Stable;

-- Commercial paper Affirm 'F2'/Stable.

Provident Financing Trust I

-- Preferred stock Affirm 'BBB '/Stable.

UnumProvident Group members:

-- Insurer financial strength rating Affirm 'AA-'/Stable.

Group members are:

Unum Life Insurance Company of America

Provident Life & Accident Insurance Company

The Paul Revere Life Insurance Company

Provident National Assurance Company

First Unum Life Insurance Company

Colonial Life & Accident Insurance Company

Paul Revere Protective Life Insurance Co.

Paul Revere Variable Life Insurance Co.