OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned Long-Term Issue Credit Ratings (Long-Term IRs) of “bbb” to the $600 million 3.050% senior unsecured notes due 2027 and the $1 billion 3.875% senior unsecured notes due 2047 that were recently issued by Cigna Corporation (Cigna) (headquartered in Bloomfield, CT) [NYSE:CI]. Furthermore, A.M. Best has assigned indicative Long-Term IRs of “bbb” to senior unsecured debt, “bbb-” to subordinated debt, “bb+” to junior subordinated debt and “bb+” to preferred shares of the shelf registration filed in August. The outlook assigned to these Credit Ratings (ratings) is stable. The existing ratings of Cigna and its subsidiaries are unchanged.
Cigna intends to use the proceeds from this $1.6 billion bond offering for its previously announced cash tender offer for up to $1 billion for its 8.300% notes due 2023, 7.65% notes due 2023, 7.875% debentures due 2027, 8.300% step down notes due 2033, 6.150% notes due 2036, 5.875% notes due 2041 and 5.375% notes due 2042, with any remaining proceeds to be used for general corporate purposes. A.M. Best expects Cigna’s debt-to-capital ratio to remain below 30%, which is lower than many of its peers. Interest coverage is expected to remain strong at over 10 times.
Cigna has a good level of financial flexibility, which is supported by its commercial paper program, parent company cash, a line of credit agreement and a steady stream of subsidiary dividends from its subsidiaries and non-regulated entities. The company’s projected net income is expected to remain strong with its health, life and disability insurance operations reporting consistent revenue growth and earnings.
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