MAY 18, 2022 04:40 PM (EDT)
AM Best Assigns Issue Credit Ratings to UnitedHealth Group Incorporated’s Senior Unsecured Notes
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FOR IMMEDIATE RELEASE
OLDWICK - MAY 18, 2022 04:40 PM (EDT)
AM Best has assigned Long-Term Issue Credit Ratings (Long-Term IRs) of “a” (Excellent) to UnitedHealth Group Incorporated’s (UnitedHealth Group) (Minnetonka, MN) [NYSE: UNH] recently issued $600 million 3.7% senior unsecured notes, due 2027; $900 million 4% senior unsecured notes, due 2029; $1.5 billion 4.2% senior unsecured notes, due 2032; $2 billion 4.75% senior unsecured notes, due 2052; and $1.0 billion 4.95% senior unsecured notes, due 2062. The outlook assigned to these Credit Ratings (ratings) is stable. UnitedHealth Group’s Long-Term Issuer Credit Rating of “a’’ (Excellent), its Long-Term IRs and the ratings of its insurance subsidiaries are unchanged.
The proceeds from this issuance are expected to be used to pay off outstanding commercial paper, $1 billion 3.35% senior unsecured notes due in July 2022 and $900 million 2.375% senior unsecured notes due in October 2022, as well as for other general corporate use. UnitedHealth Group had a $3.2 billion of commercial paper outstanding at March 31, 2022. Following the repayment of commercial paper and upcoming maturities, AM Best anticipates the issuance to be neutral to the group’s adjusted financial leverage ratio, which measured 36.2% as of March 31, 2022.
UnitedHealth Group has managed its financial leverage in the 40% range over the long term, with experiencing fluctuations following sizeable acquisitions. AM Best anticipates that the group’s adjusted financial leverage will remain below 40% at year-end 2022, following the completion of the two pending acquisitions, Change Healthcare and LHC Group Inc. The organization maintains strong earnings before interest and taxes interest coverage in the low double digits. UnitedHealth Group has excellent liquidity through parent company cash, insurance subsidiary dividend capacity, non-regulated cash flow, commercial paper program and a $15 billion revolving credit agreement. A steady stream of revenue development and earnings growth have resulted in a solid operating performance trend over the past several years underpinned by UnitedHealth Group’s operations at UnitedHealthcare Insurance and at Optum. The organization expects this growth to continue over the medium term.
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