AM Best Assigns Issue Credit Ratings to UnitedHealth Group Incorporated’s New Senior Unsecured Notes and New Shelf Registrations

AM Best has assigned Long-Term Issue Credit Ratings (Long-Term IR) of “a” (Excellent) to UnitedHealth Group Incorporated’s (UnitedHealth Group) (Minnetonka, MN) [NYSE: UNH] recently issued $1.25 billion 4.250% senior unsecured notes, due 2029, $1.5 billion 4.5% senior unsecured notes, due 2033, $2 billion 5.05% senior unsecured notes, due 2053, and $1.75 billion 5.2% senior unsecured notes, due 2063. In addition, AM Best has assigned indicative Long-Term IRs of “a-” (Excellent) to subordinated issues, “bbb+” (Good) to preferred stock and “a” (Excellent) to senior unsecured issues of the recently filed shelf registration to UnitedHealth Group. The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings on the previous shelf registrations. UnitedHealth Group’s Long-Term Issuer Credit Rating of “a” (Excellent), its Long-Term IRs and the ratings of its insurance subsidiaries are unchanged.

The proceeds from the debt issuance will be used for general corporate purposes, including refinancing short-term debt that was used to finance the LHC Group Inc. (LHC) acquisition, valued at approximately $6 billion including the retirement of LHC debt, which closed early this year. The LHC acquisition will strengthen UnitedHealth Group’s home health services. Following the repayment of commercial paper and upcoming maturities, AM Best anticipates the issuance to increase the group’s adjusted financial leverage ratio approximately 44%. However, UnitedHealth Group has managed to bring its financial leverage down to the 40% range over time taking active actions to deleverage following sizeable acquisitions. As of Dec. 31, 2022, the group’s financial leverage was 41.4%. The organization maintains strong earnings before interest and taxes interest coverage in the low double digits. UnitedHealth Group has excellent liquidity through parent company cash, insurance subsidiary dividend capacity, non-regulated cash flow, commercial paper program and a $18 billion revolving credit agreement. A steady stream of revenue development and earnings growth have resulted in a solid operating performance trend over the past several years underpinned by UnitedHealth Group’s operations at UnitedHealthcare and at Optum. The organization expects this growth to continue over the medium term.

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