AM Best Assigns Indicative Issue Credit Ratings to UnitedHealth Group Incorporated’s New Shelf Registration
February 27 2020 - 1:33PM
Business Wire
AM Best has assigned indicative Long-Term Issue Credit
Ratings of “a-” to senior unsecured issues, “bbb+” to subordinated
issues and “bbb” to preferred stock to the recently filed shelf
registration of UnitedHealth Group Incorporated (UnitedHealth
Group) (Minnetonka, MN) (NYSE:UNH). The outlook assigned to these
Credit Ratings (ratings) is positive. Concurrently, AM Best has
withdrawn the ratings on the previous shelf registration. The
existing ratings of UnitedHealth Group and its insurance
subsidiaries are unchanged.
UnitedHealth Group filed a shelf registration for securities on
Feb. 24, 2020, as its previous shelf registration had expired.
UnitedHealth Group manages its financial leverage at approximately
40% on a long term basis. Debt to capital, as measured by AM Best,
was 38% at year-end 2019. UnitedHealth Group is an active issuer of
debt with scheduled debt maturities totaling $3.1 billion for 2020.
Furthermore, its acquisition of specialty pharmacy manager,
Diplomat Pharmacy, Inc., closed on Feb. 10, 2020. However, the
company continues to report strong and growing earnings, and its
unregulated cash flow from its Optum operations are material. As a
result, AM Best expects that there will no material change in
financial leverage for the organization. The company maintains
strong earnings before interest and taxes interest coverage, which
was over 11 times for 2019. Nevertheless, the company has a high
level of goodwill and intangible assets; however, the ratio of
goodwill and intangibles to equity has remained stable over the
past two years at 126%, and there is no history of material
write-downs.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper media use of Best’s
Credit Ratings and AM Best press releases, please view Guide for
Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in New York, London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating
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2200, ext. 5321 bridget.maehr@ambest.com
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2200, ext. 5644 james.peavy@ambest.com
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