Aflac’s stock continues to get hammered in trading on the New York Stock Exchange.
Monday, the Columbus-based supplemental insurance company saw its stock lose 14.5 percent of its value. The stock close at $11.49 per share, down $1.95,
The stock closed at a new 52-week low.
The drop came after analysts at UBS downgraded Aflac from neutral to sell on Monday morning. Last Friday, Fitch ratings expressed concerns about Aflac’s bank investments and also downgraded the stock.
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There have been concerns for about two months that a portion of Aflac’s investment portfolio could be at risk, which would force the company to raise capital.
Aflac has more than $7 billion invested in European banks and the concern is those investments could be at risk if the banks fail.
“There is nothing new to report,” Aflac spokesperson Laura Kane said Monday after the markets closed. “Nothing new has happened. The company remains operationally strong.”
Fitch cut Aflac’s issuer default rating to “A+” from “AA-” and its senior notes to “A” from “A+.” The ratings agency also cut the insurer financial strength ratings of Aflac’s insurance subsidiaries to “AA-” from “AA.” All ratings are considered investment grade.
Fitch also maintained a negative watch for Aflac, signaling the possibility of further downgrades if business conditions worsen.
Fitch said the ratings actions are based on the possibility that Aflac’s capital position could be weakened by debt investments called perpetual debenture assets. Debentures are general debt obligations backed by the borrower.
The Fitch downgrade did not catch Aflac off-guard. S&P issued a similar downgrade last month.
“It was not unexpected in light of the S&P downgrade,” Kane said. “In this environment, rating agencies are under enormous pressure.”Aflac’s stock price has been falling since last fall.
Last week, Aflac shares fell $3.32 per share.
Monday, Aflac closed with a market cap -- the stock value of the company -- of $5.37 billion.
Interestingly, Aflac and Columbus-based electronic payments processor TSYS now have similar stock prices. TSYS closed Monday at $11.40 per share, down 40 cents. TSYS market cap is $2.25 billion.
The Associated Press contributed to this report.