A.M. Best Assigns Ratings to Aetna Inc.’s New Senior Notes

  A.M. Best Assigns Ratings to Aetna Inc.’s New Senior Notes

Business Wire

OLDWICK, N.J. -- November 06, 2012

A.M. Best Co. has assigned debt ratings of “bbb+” to $2 billion of senior
unsecured notes recently issued in three tranches by Aetna Inc. (Aetna)
(Hartford, CT) [NYSE: AET]. The ratings have been placed under review with
negative implications, consistent with the under review status of the existing
ratings of Aetna and its insurance subsidiaries. (See A.M. Best’s press
release dated August 21, 2012 for further information.)

The proceeds from the securities will be used to finance a portion of the
purchase price of the acquisition of Coventry Health Care, Inc. (Coventry).
Although Aetna’s pro forma financial leverage—as well as its goodwill and
intangibles to equity ratio—will be somewhat higher than similarly-rated
peers, A.M. Best views favorably the low cost of capital and the laddering of
maturities within Aetna’s capital structure. Additionally, the issuance is
consistent with A.M. Best’s expectations with respect to Aetna’s capital
structure incorporating the financing for the previously announced $7.3
billion (approximate) acquisition of Coventry.

The Coventry acquisition is expected to close mid-2013, subject to state and
federal regulatory approvals and other customary closing conditions. Aetna’s
ratings are anticipated to remain under review pending the completion of the
transaction and A.M. Best’s continuing discussions with management. However,
A.M. Best will continue to monitor Aetna’s operating performance,
risk-adjusted capitalization at the operating companies and its capital
structure to ensure financial and operating metrics remain within A.M. Best’s

The following debt ratings have been assigned:

Aetna Inc.—

-- “bbb+” on $500 million 1.50% senior unsecured notes, due 2017

-- “bbb+” on $1 billion 2.75% senior unsecured notes, due 2022

-- “bbb+” on $500 million 4.125% senior unsecured notes, due 2042

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more information,
visit www.ambest.com.

       Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
Wayne Kaminski
Senior Financial Analyst
908-439-2200, ext. 5061
Sally Rosen
Assistant Vice President
908-439-2200, ext. 5280
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
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