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A.M. Best Assigns Rating to WellPoint, Inc.a?s New Senior Unsecured Notes

^{Published on 2010-08-17 06:50:45 - Market Wire}
 

OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has assigned a debt rating of abbb+a to $700 million 4.35% senior unsecured notes due 2020 and abbb+a to $300 million 5.80% senior unsecured notes due 2040 recently issued by WellPoint, Inc. (WellPoint) (Indianapolis, IN) (NYSE: WLP). The rating outlook is stable.

"A.M. Besta™s Ratings & the Treatment of Debt."

A.M. Best expects that the proceeds will be used for working capital and for general corporate purposes, which may include the repayment of short and long-term debt. The existing ratings of WellPoint and its subsidiaries are unchanged.

WellPointa™s debt to capital at June 30, 2010 was approximately 27%, up slightly from year-end 2009 as shareholdersa™ equity declined slightly due to WellPointa™s share repurchase program. A.M. Best expects WellPointa™s financial leverage to be at or below 30% at year-end 2010. EBIT interest coverage was 12 times at year-end 2009 and is expected to remain at or above 10 times for the full year 2010. Both the debt to capital ratio and the EBIT interest coverage are well within the guidelines for the rating.

WellPoint is well diversified geographically across business segments. Earnings and operational cash flows have been strong. The operating entitiesa™ capitalization improved in 2009. WellPoint carries a significant amount of goodwill and other intangible assets on its balance sheet. However, A.M. Best does recognize that the companya™s intangibles plus goodwill to equity ratio is in line with some of its peers.

The principal methodology used in determining these ratings is [ Besta™s Credit Rating Methodology - Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include aA.M. Besta™s Ratings & the Treatment of Debt.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit [ www.ambest.com ].