AM Best Assigns Issue Credit Ratings to Humana Inc.’s Senior Unsecured Notes
AM Best has assigned a Long-Term Issue Credit Rating of bbb- (Good) to Humana's recent $500 million, 5.7% senior unsecured notes due March 13, 2026 and $750 million, 5.5% senior unsecured notes due March 15, 2053. The outlook for these ratings is stable. The issuance aims to replace existing term loans, pre-fund upcoming maturities, and support general corporate purposes. Humana's financial leverage was approximately 42% as of Dec. 31, 2022, which is expected to moderate to about 40% long-term. Despite elevated leverage, earnings before interest and taxes coverage remains strong at over 10 times.
- Assigned Long-Term Issue Credit Rating of bbb- (Good).
- Earnings before interest and taxes interest coverage remains strong at over 10 times.
- Good insurance subsidiary dividend capacity based on operating performance.
- Financial leverage at 42% as of Dec. 31, 2022, expected to increase in the near term.
This issuance is expected to be used to replace the outstanding term loan, prefund debt maturities for later in 2023, and for general corporate purposes, including paying down outstanding commercial paper. AM Best anticipates that this debt issue will increase Humana’s financial leverage in the near term; this metric will moderate over the next two quarters as upcoming maturities are paid down. Humana’s financial leverage at
On a longer-term basis, Humana plans to manage financial leverage at approximately
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Source: AM Best
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