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Best’s News & Research Service - March 10, 2021 03:02 PM (EST)

AM Best Assigns Issue Credit Ratings to Anthem, Inc.’s New Senior Unsecured Notes

  • March 10, 2021 03:02 PM (EST)
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Oldwick //BestWire// - AM Best has assigned Long Term Issue Credit Ratings of “bbb+” to the newly issued senior unsecured notes of Anthem, Inc. (Anthem) (Indianapolis, IN) [NYSE:ANTH], which total $3.5 billion. The offering consists of $500 million of 0.45% senior unsecured notes, due 2023; $750 million of 1.5% senior unsecured notes, due 2026; $1.0 billion of 2.55% senior unsecured notes, due 2031; and $1.25 billion of 3.6% senior unsecured notes, due 2051. The outlook assigned to these Credit Ratings (ratings) is stable. Anthem’s Long-Term Issuer Credit Ratings remain unchanged.

The proceeds are expected to be utilized for general corporate purposes, including debt repayment, share repurchases and acquisitions, which may include the recently announced acquisition of MMM Holdings, LLC, composed of its Puerto Rico-based insurance subsidiaries MMM Healthcare, LLC, a Medicare Advantage plan, and MMM Multi Health, LLC, a Medicaid plan. Anthem has a debt issue totaling $700 million maturing later in 2021.

The new issuance will increase Anthem’s financial leverage to 41.6%, as calculated by AM Best, compared with approximately 38% at year-end 2020. Interest coverage remains good at over eight times. Anthem’s management expects financial leverage to moderate slightly by year-end 2021 and to remain within the target of 40%. Anthem continues to maintain strong liquidity with access to $3.5 billion revolving credit facility and a $3.5 billion commercial paper program, as well as access to Federal Home Loan Bank borrowings through its insurance subsidiaries. There were no borrowings outstanding at any of these facilities at year-end 2020.

Anthem continues to report double-digit revenue growth and strong earnings in 2020. Profitability measures remain robust; however, they have fluctuated somewhat, driven in part by the investments in building proprietary pharmacy benefit management capabilities under IngenioRX. Anthem continues to benefit from its leading market position supported by its Blue Cross Blue Shield-branded entities in 14 states. Anthem has intensified its efforts toward business diversification, including more focus on government programs and non-regulated operations.

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.



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