AM Best Assigns Issue Credit Ratings to UnitedHealth Group Incorporated’s Senior Unsecured Notes
May 14 2020 - 12:59PM
Business Wire
AM Best has assigned Long-Term Issue Credit Ratings
(Long-Term IR) of “a-” to UnitedHealth Group Incorporated’s
(UnitedHealth Group) (Minnetonka, MN) [NYSE: UNH] recently issued
$500 million 1.25% senior unsecured notes due 2026; $1.25 billion
2.0% senior unsecured notes due 2030; $1.0 billion 2.75% senior
unsecured notes due 2040; $1.25 billion 2.9% senior unsecured notes
due 2050; and $1.0 billion 3.125% senior unsecured notes due 2060.
The outlook assigned to these Credit Ratings (ratings) is positive.
UnitedHealth Group’s Long-Term Issuer Credit Rating of “a-’’, its
existing Long-Term IRs and the ratings of its insurance
subsidiaries are unchanged.
The proceeds from UnitedHealth Group’s newly issued senior
unsecured notes are expected to be used to pay down short term
borrowings, for $1.5 billion of senior unsecured notes coming due
in July 2020 and for general corporate purposes. UnitedHealth Group
manages its financial leverage at approximately 40% on a long-term
basis. The company’s debt-to-capital ratio, as measured by AM Best,
was 45% at March 31, 2020. However, this metric was elevated as
UnitedHealth Group had $10 billion outstanding on its revolving
credit agreements during the first quarter. The new debt issuance
is expected to be neutral to UnitedHealth Group’s leverage ratio.
UnitedHealth Group is an active issuer of debt with additional
scheduled debt maturities totaling $1.65 billion in October
2020.
The outlook for UnitedHealth Group remains positive. The company
reported strong earnings from operations for the first quarter of
2020, and has reaffirmed its full-year 2020 guidance. The
organization’s earnings are well-diversified from its health
insurance operations, UnitedHealthcare, and its unregulated
healthcare services business, Optum. The company continues to
maintain strong earnings before interest and taxes (EBIT) interest
coverage, which was over 11 times for 2019. UnitedHealth Group has
a history of strong operating results and benefits from its
integrated healthcare model. The company’s health insurance
business is well-diversified by business segment and geography,
both of which offer a balance in the current operating environment
due to the impact of COVID-19. UnitedHealth Group has a
conservative investment portfolio with low exposure to the equity
market and has strong cash flows and financial flexibility, which
allows them to hold fixed-income securities to maturity.
UnitedHealth Group has a nationwide presence with strong brand and
market share across business segments and geographies. The company
has adapted quickly to the current operating environment and is
making meaningful contributions to the healthcare industry.
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
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Bridget Maehr Associate Director +1 908 439
2200, ext. 5321 bridget.maehr@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Sally Rosen Senior Director +1 908 439 2200,
ext. 5280 sally.rosen@ambest.com
Jim Peavy Director, Public Relations +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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