Health & Fitness
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Published in Health and Fitness on Tuesday, August 16th 2011 at 8:06 GMT by Market Wire
OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has assigned a debt rating of abbb+a to $400 million 2.375% senior unsecured notes, due 2017, and a debt rating of abbb+a to $700 million 3.70% senior unsecured notes, due 2021, recently issued by WellPoint Inc. (WellPoint) (Indianapolis, IN) (NYSE: WLP). The assigned outlook is stable. All other existing ratings of WellPoint and its subsidiaries are unchanged.
"A.M. Besta™s Ratings & the Treatment of Debt."
A.M. Best expects that the proceeds will be used for working capital and general corporate purposes, which may include repayment of short- and long-term debt as well as funding of the CareMore Health Group acquisition.
WellPointa™s debt to capital at June 30, 2010, was approximately 27% and is expected to increase to around 30% with this issuance. WellPointa™s EBIT (earnings before interest and taxes) interest coverage was 11 times at year-end 2010 and is expected to remain at or above 9 times for 2011. Both the debt-to-capital ratio and the EBIT interest coverage are well within the guidelines for the ratings.
WellPoint is well diversified geographically across business segments. Earnings and operation cash flows have been strong. WellPoint carries a significant amount of goodwill and other intangible assets on its balance sheet, which may grow upon completion of the CareMore Health Group acquisition. However, A.M. Best does recognize that the companya™s ratio of intangibles plus goodwill to equity 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: a[ A.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 world'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.
