A.M. Best Assigns Rating to Tailwind Holdings, LLC's Senior Secured Notes

Business Wire, Nov 1, 2006

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "aaa" to $130 million of Series A floating rate insured notes, due 2036 (notes) issued by Tailwind Holdings, LLC (Tailwind Holdings), a Delaware limited liability company and a wholly-owned subsidiary of UnumProvident Corporation (UnumProvident) [NYSE: UNM](Delaware).

Proceeds of the offering, along with additional equity capital from UnumProvident, will be contributed to Tailwind Re, Inc. (Tailwind Re), a special purpose financial captive insurance company incorporated under the laws of the state of South Carolina. Tailwind Re was established for the limited purpose of entering into and the servicing of a reinsurance agreement with Unum Life Insurance Company of America (Unum America). The reinsurance agreement will cover the payment of disability benefits, settlements and other amounts payable with respect to Unum America's long-term disability claims incurred between January 1, 1999 and December 31, 2001 that were in payout status as of January 1, 2006. Unum America will enter into a portfolio indemnity reinsurance agreement with Tailwind Re on a modified coinsurance basis with respect to a quota share of its reinsured claims. Tailwind Re will be responsible for its share of the quota share (100%) with respect to Unum America's liability obligations originating from the reinsured claims, other than extra contractual obligations, (liabilities arising from other than the expressed terms and conditions of or in excess of the limits of the reinsured claims). Upon execution of the reinsurance agreement between Tailwind Re and Unum America, Unum America will establish a separate and segregated account (Modco Account) and allocate specific assets whose value as of January 1, 2006 will be equal to the reserve balance sufficient to meet its future reinsured claim obligations.

The notes will be senior, secured obligations of Tailwind Holdings. The notes may be redeemed in whole or in part under certain circumstances prior to maturity, and partial repayment of principal is expected to be made prior to the scheduled maturity date. Recourse to the payment of interest and principal and other amounts due on the notes will be solely limited to the collateral (trust assets, capital stock of Tailwind Re and dividend distributions) and other assets, if any, of Tailwind Holdings. Tailwind Holdings' ability to meet its note payment obligations will be dependent upon its receipt of dividends from Tailwind Re, the sole subsidiary of Tailwind Holdings. MBIA Insurance Corporation (MBIA), a New York stock insurance company, will, through the issuance of a financial guaranty insurance policy, insure the timely payment of scheduled interest and the repayment of principal at maturity.

A.M. Best's "aaa" rating assigned to the notes takes into consideration the following: a review of the structure, legal documentation and regulatory environment; an analysis of the underlying cash flows and actuarial assumptions including stress testing and sensitizing of the cash flow projections based upon A.M. Best's view on various key factors such as mortality rates, recovery rates, interest rates and investment conditions; and the assessment of the payment assurance of MBIA for the benefit of the note holders.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.