AM Best has assigned Long-Term Issue Credit Ratings of “a-” (Excellent) to UnitedHealth Group Incorporated’s recently issued $1.0 billion.
- The ratings: The credit ratings are marked as 55% senior unsecured notes, due 2024; $1.0 billion 1.15% senior unsecured notes, due 2026; $1.5 billion 2.3% senior unsecured notes, due 2031; $1.5 billion 3.05% senior unsecured notes, due 2041; and $2.0 billion 3.25% senior unsecured notes, due 2051. The outlook assigned to these Credit Ratings are positive.
- AM best’s anticipation: The proceeds from this issuance are expected to be used to pay off the outstanding commercial paper, $750 million of senior unsecured notes maturing in June 2021, and for general corporate purposes. UnitedHealth Group had $5.4 billion of commercial paper outstanding on March 31, 2021. AM Best anticipates the issuance will be neutral to the financial leverage ratio, which measured 40% as of March 31, 2020.
- Enhanced revenue: UnitedHealth Group has reported strong revenue development and earnings growth over the past several years from its UnitedHealthcare insurance business and its Optum operations, a trend that is expected to continue over the medium term. UnitedHealth Group’s business is well-diversified and its integrated business model has performed well during the COVID-19 pandemic.
- Assertive development for the past few years: UnitedHealth Group has excellent liquidity through parent company cash, subsidiary dividend capacity, non-regulated cash flow, and a $12.5 billion revolving credit agreement. Investments are predominantly investment grade fixed income securities with low volatility of income streams and asset valuation, which contribute favorably to cash flows. These favorable earnings trends are driving balance sheet strengthening of the organization, which is reflected in the positive outlook.
- Best credit rating platform: 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.
