A.M. Best Assigns Debt Rating to Allstate's Junior Subordinated Debentures

Business Wire, May 11, 2007

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bbb " to $1.0 billion of junior subordinated debentures issued on May 3, 2007 by The Allstate Corporation (Allstate) (NYSE:ALL) (Northbrook, IL). The rating outlook is stable.

The junior subordinated debentures were issued in two $500 million tranches. The Series A and Series B debentures are fixed-to-floating rate and have scheduled maturities of 50 years and 30 years, respectively. Both have final maturities of 60 years. The Series A debentures will be non-callable at par for the first 30 years, while the Series B debentures will be non-callable at par for the first 10 years.

Proceeds from this offering are expected to be used to fund $1.0 billion in share repurchases in addition to Allstate's existing $3.0 billion share repurchase program. Following the $1.0 billion share repurchase, Allstate's total debt-to-adjusted capitalization is expected to be approximately 21%, up from 19% at year-end 2006. Additionally, Allstate's ability to service its annual interest expense is strong with earnings coverage of approximately 20 times.

Given the superior financial strength of Allstate Insurance Group (Northbrook, IL) and its strong earnings outlook in the near term, A.M. Best believes Allstate is well positioned to achieve its capital management plans in 2007.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.