A.M. Best Rates WellPoint Securities - Analyst Blog
December 16 2011 - 10:28AM
Zacks
Yesterday, rating agency A.M. Best Co. assigned ratings to
WellPoint Inc.’s (WLP) securities that were
recently registered through the universal shelf registration
process. The rating agency assigned a “bbb+” rating to the
company’s senior unsecured debt, “bbb” to subordinated debt and
“bbb-” to preferred stock with a stable outlook.
Shelf registration is a
process authorized by the U.S. Securities and Exchange
Commission, which allows
a single registration document to be filed by a company for the
issue of multiple securities.
The proceeds from the securities’ issue are expected to be used
for working capital, debt repayment, business development as well
as other corporate purposes. The strong ratings are based on
WellPoint’s significant global penetration, strong capital
position, high liquidity, good operating performance and
considerable cash flow.
A. M. Best did not change the previously assigned ratings of
WellPoint and its subsidiaries. In August 2011, the rating agency
had assigned “bbb+” debt ratings to the company’s $400 million
2.375% senior unsecured notes, due in 2017 and to its other tranche
of $700 million senior unsecured notes, carrying an interest rate of
3.70% and due in 2021. Besides, the rating agency had also
affirmed the other debt and financial strength ratings of the
company.
The ratings by A. M. Best have boosted investors’ confidence,
which is reflected in WellPoint’s share price. On Thursday, shares
of the company closed at $64.50, up 1.54%, on the New York Stock
Exchange.
Currently, the Zacks Consensus Estimate for WellPoint’s
fourth-quarter earnings stand at $1.11 per share, down about 16.5%
year-over-year. None of the 19 firms covering the stock revised
their estimates in the last 30 days.
For 2011, earnings are expected to be $7.08 per share, climbing
about 5.1% year-over-year. WellPoint is the largest insurer on the
basis of enrollment, beating competitors like Aetna
Inc. (AET), CIGNA Corporation (CI) and
UnitedHealth Group Inc. (UNH).
The company carries a Zacks #3 Rank, which translates into a
short term Hold rating, with no clear directional pressure on the
shares over the near term.
AETNA INC-NEW (AET): Free Stock Analysis Report
CIGNA CORP (CI): Free Stock Analysis Report
UNITEDHEALTH GP (UNH): Free Stock Analysis Report
WELLPOINT INC (WLP): Free Stock Analysis Report
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