FEBRUARY 02, 2023 08:45 AM (EST)
AM Best Assigns Issue Credit Ratings to Elevance Health, Inc.’s New Senior Unsecured Notes
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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 02, 2023 08:45 AM (EST)
AM Best has assigned Long-Term Issue Credit Ratings of “bbb+” (Good) to Elevance Health, Inc.’s (Elevance Health) (Indianapolis, IN) newly issued $500 million, 4.9% senior unsecured notes, due 2026; $1 billion, 4.75% senior unsecured notes, due 2033 and $1.1 billion, 5.125% senior unsecured notes, due 2053. The outlook assigned to these Credit Ratings (ratings) is stable.
The proceeds from the issuance are intended to be utilized for general corporate purposes, including repayment of an upcoming debt maturity of Elevance Health’s $500 million, 0.45% senior unsecured notes, due in March 2023. In addition, part of the proceeds may be used toward closing the earlier announced acquisition – BioPlus, a specialty pharmacy provider. The transaction is expected to close later in 2023.
AM Best anticipates Elevance Health’s adjusted financial leverage ratio to be slightly above 40% at year-end 2023. However, the company has shown an ability to manage the financial leverage down to below 40% following temporary fluctuations due to debt issuances and acquisitions. In addition, the company continues to maintain strong earnings before interest and taxes interest coverage in the 10 times range. Elevance Health has a high level of financial flexibility, supported by its large commercial paper program, parent company cash and a revolving credit facility. Cash flows from operations have been very good over the past three years and exceeded net income levels.
The organization has continued to report double-digit revenue growth and strong earnings through year-end 2022. Overall earnings were impacted by better-than-expected underwriting results offset by higher operating expenses in support of business expansion. Elevance Health continues to benefit from its leading market position supported by its Blue Cross Blue Shield-branded entities across many states.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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.