OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has assigned a debt rating of “bb” to the $175 million 5.75% senior unsecured notes due 2017 and issued in November 2012 of Centene Corporation (Centene) (headquartered in St. Louis, MO) (NYSE: CNC). The assigned outlook is stable.
The notes are an add-on to the existing 5.75% senior notes that will mature in 2017. The new notes were priced at 5.75% with a yield to maturity of 4.288%. Including the add-on debt, the total debt issued under this series originally issued in May 2011 is $425 million. The majority of the proceeds have been used for capitalizing Centene’s managed care subsidiaries in support of the growth in its statutory revenues over the past year as contracts have been renewed and growing and new business have been added. The new debt levels will drive the debt-to-capital percentage on a pro-forma basis higher to a range of approximately 31% from 29.2% at the quarter ending September 30, 2012. Centene has additional financial flexibility in its $400 million credit facility.
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