AM Best has assigned Long-Term Issue Credit Ratings (Long-Term IR) of "bbb-" to Humana Inc.’s (Humana) (headquartered in Louisville, KY) [NYSE:HUM] recently announced $600 million 4.5% 5-year senior unsecured notes due 2025 and the $500 million 4.875% 10-year senior unsecured notes due 2030. The outlook assigned to these Credit Ratings (ratings) is positive. Humana’s Long-Term Issuer Credit Rating of "bbb-", its existing Long-Term IRs and the ratings of its insurance subsidiaries are unchanged.
With these issuances, Humana’s financial leverage will increase to the 35-40% range. However, AM Best expects the leverage to return to closer to the 35% range in the near to medium term. Humana has strong interest coverage at over 10 times. Humana intends to use the proceeds for general corporate purposes, which may include the repayment of existing debt.
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