A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength ratings (FSR) and issuer credit ratings (ICR) of the core insurance subsidiaries of Aetna Inc. (Aetna) (Hartford, CT) [NYSE: AET].
Concurrently, A.M. Best has removed from under review with negative implications and affirmed the ICR and debt ratings of “bbb+” of Aetna. Additionally, A.M. Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the ICRs to “a” from “a-”, as well as the FSR to A- (Excellent) from B++ (Good) and ICRs to “a-” from “bbb+” of some of the former subsidiaries of Coventry Health Care, Inc. (Coventry) (formerly headquartered in Bethesda, MD). At the same time, A.M. Best has upgraded the FSR to A- (Excellent) from B++ (Good) and the ICRs to “a-” from “bbb” and the FSR to A- (Excellent) from B+ (Good) and the ICRs to “a-” from “bbb-” of the remaining former subsidiaries of Coventry.
In addition, A.M. Best has upgraded the ICR to “bbb” from “bbb-” and removed from under review with positive implications this rating of Coventry.
A.M. Best also has upgraded the debt ratings to “bbb” from “bbb-” and removed from under review with positive implications the $400 million 6.3% senior unsecured notes, due 2014; $400 million 5.95% of senior unsecured notes, due 2017; and $600 million 5.95% senior unsecured notes, due 2021 of Coventry. Also, A.M. Best has upgraded the debt rating to “bbb+” from “bbb-” and removed from under review with positive implications the $250 million 6.125% senior unsecured notes, due 2015 of Coventry. The 2015 debt is guaranteed by Aetna for its full and punctual payment. The outlook assigned to the above ratings is stable. (Please see link below for a detailed listing of the companies and ratings.)The ratings of both Aetna and Coventry were placed under review following the August 2012 announcement that Aetna had entered into an agreement to acquire Coventry. That transaction was completed on May 7, 2013. A.M. Best has since had discussions with management regarding the business strategy around the Coventry acquisition and its integration into Aetna, as well as Aetna’s consolidated 2013 outlook for operating results and key financial metrics.
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