AM Best Assigns Issue Credit Ratings to Cigna Corporation’s New Senior Unsecured Notes and Indicative Shelf Registration
March 10 2020 - 5:36PM
Business Wire
AM Best has assigned the Long-Term Issue Credit Ratings
(Long-Term IRs) of “bbb” to the $1.5 billion 2.4% senior unsecured
notes due 2030, $750 million 3.2% senior unsecured notes due 2040
and the $1.25 billion 3.4% senior unsecured notes due 2050 recently
issued by Cigna Corporation (Cigna) (headquartered in Bloomfield,
CT) [NYSE:CI]. Furthermore, AM Best has assigned indicative
Long-Term IRs of “bbb” to senior unsecured debt and “bb+” to
preferred shares under the recently filed shelf registration. The
outlook assigned to these Credit Ratings (ratings) is stable. The
existing ratings of Cigna and its subsidiaries are unchanged (see
related press release).
The proceeds of the recent $3.5 billion of aggregate debt,
issued on March 4, 2020, will be used to redeem/tender upcoming
2021, 2022 and 2023 higher coupon issues.
Cigna maintains high financial leverage of approximately 47%,
including the current debt issues, and a high level of goodwill and
intangibles – the increase in both metrics primarily was related to
the Cigna-Express Scripts Inc. acquisition. However, Cigna has
moderated its leverage post transaction, which was over 50%, and
Cigna remains committed to an accelerated deleveraging during 2020,
which is expected to leave financial leverage closer to 40% by the
end of the year. AM Best expects financial deleveraging to be
driven by the strong earnings and dividends from Cigna’s insurance
entities, solid nonregulated earnings from its health services
segment and additional one-time capital sources, such as a portion
of the proceeds from the pending sale of its group employee
benefits business, which is expected 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 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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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, Public Relations +1 908 439 2200, ext. 5644
james.peavy@ambest.com
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