Health & Fitness
Health and Fitness
Health and Fitness
Mon, June 13, 2011
Fri, June 10, 2011 A.M. Best Assigns Ratings to Coventry Health Care Inc.a?s New Senior Unsecured Notes
OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has assigned a debt rating of abbb-a to the $600 million 5.45% senior unsecured notes, due 2021, recently issued by Coventry Health Care Inc. (Coventry) (Bethesda, MD) (NYSE: CVH). The assigned outlook is stable. The existing ratings of Coventry and its subsidiaries are unchanged.
"A.M. Besta™s Ratings & the Treatment of Debt."
A.M. Best expects the proceeds from this offering to be used by Coventry for repayment, redemption or repurchase of existing debt and for general corporate purposes.
Coventrya™s debt-to-capital ratio was 27.3% at March 31, 2011. This was down from 27.6% at year-end 2010 and 30.1% at year-end 2009; however, the debt-to-capital ratio is expected to increase slightly following the current issuance and expected repayment, redemption or repurchase of existing debt. Earnings before interest and taxes (EBIT) interest coverage was 9.5 times at December 31, 2010, compared to 6.9 times at year-end 2009. The improvement was due to the strong earnings from Coventrya™s operations and declining interest expenses. However, Coventrya™s EBIT interest coverage is expected to decline in 2011 as future regulated earnings may weaken, driven by mandatory rebates and higher medical loss ratios.
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 the worlda™s oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].
Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
