AM Best Assigns Issue Credit Ratings to Cigna Corporation’s New Senior Unsecured Notes
March 04 2021 - 2:57PM
Business Wire
AM Best has assigned Long-Term Issue Credit Ratings of
“bbb” to the $500 million .613% senior unsecured notes due 2024,
$800 million 1.25% senior unsecured notes due 2026, $1.5 billion
2.375% senior unsecured notes due 2031 and $1.5 billion 3.4% senior
unsecured notes due 2051 recently issued by Cigna Corporation
(Cigna) (headquartered in Bloomfield, CT) [NYSE:CI]. The outlook
assigned to these Credit Ratings (ratings) is stable. The existing
ratings of Cigna and its subsidiaries are unchanged. The proceeds
of the recent $4.3 billion of aggregate debt, issued on March 1,
2021, will be used to redeem upcoming 2021, 2022 and 2023 issues
held at various entities, as well as for general corporate
purposes.
AM Best notes that Cigna has maintained relatively high
financial leverage, which had come down to just over 39% at
year-end 2020 and coverage improving noticeably given strong
earnings reported for the year. While the March 2021 debt issues
will be used to redeem upcoming 2021, 2022 and 2023 maturities,
with additional legacy Cigna Holding Company debt also maturing
this month, this debt issue will cause a temporary increase in
financial leverage in the interim. However, Cigna has moderated its
leverage post transaction, which was over 50% at the time of the
close of the Express Scripts, Inc. acquisition. Cigna remains
committed to deleveraging, and management has indicated it expects
the company’s financial leverage to return to its targeted range of
below 40% by year-end 2021.
AM Best expects Cigna’s financial deleveraging to be driven by
the stronger earnings reported in 2020 and related dividends from
Cigna’s insurance entities, solid nonregulated earnings from its
Evernorth health services segment and additional one-time capital
sources, such as a portion of the proceeds from the sale of its
group employee benefits business - which closed at year-end 2020 -
to help reduce outstanding debt.
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 London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Joseph Zazzera, MBA Director +1 908 439 2200,
ext. 5797 joseph.zazzera@ambest.com
Sally Rosen Senior Director +1 908 439 2200,
ext. 5280 sally.rosen@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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