Kemper Corp.'s troubled real estate portfolio and poor earnings from brokerage subsidiary, Kemper Securities Inc., caused Standard & Poor's Corp. to lower its rating yesterday on $181.7 million of the parent company's sentor debt to BBB from BBB-plus.

In addition, the rating agency lowered ratings on Kemper's $360.6 million of preferred stock to BB-plus from BBB.

"We are disappointed by Standard & Poor's Corp.'s action to downgrade the ratings of Kemper Corp.'s senior debt and preferred stock," the company said in a statement.

"Our recent issuances of $360 million in equity capital, our exit from the reinsurance business and the pending exit from the property casualty market as well as the continued strengthening of the capital position of our life insurance companies and the formation of a real estate master limited partnership demonstrates our focus on taking actions which we believe improve Kemper's credit quality."

Standard & Poor's also said in taking the rating action that the downgrades reflected a downturn in sales at Kemper's life insurance unit, due in part to a voluntary decline in crediting rates.

Despite these negatives, the rating agency said, "Kemper maintains strong brand recognition in the investment management industry, which continues as a core business, has restructured into a lower risk profile, and maintains only a moderate reliance on debt."

Kemper ranks among the largest investment management companies in the United States, with more than $70 billion of assets under management.

The company's outlook is stable although Standard & Poor's said it expects Kemper's earnings to continue to be suppressed by asset losses and poor results at the securities brokerage unit in the near term. Further, the rating agency does not anticipate significant growth in Kemper's core businesses.

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