A.M. Best Places Financial Strength and Debt Ratings of Insurance Subsidiaries of Coventry Health and First Health Under Review.OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength ratings of B++ (Very Good) and B+ (Very Good) of the insurance subsidiaries of Coventry Health Care Coventry Health Care, Inc. (Coventry) (NYSE: CVH) is a managed health care company in the United States. On February 8th of 2007 Coventry agreed to acquire Concentra's Workers Compensation Managed Care Services Businesses. External links
See: New York Stock Exchange : CVH CVH Helicopter Carrier CVH Compound-valve-angle Hemispherical Combustion-chamber (Ford cylinder head design and family of engines) CVH Compound Valve Angle Hemispheral Combustion Chamber CVH continuous venous hemodialysis ) (Bethesda, MD) under review with negative implications. A.M. Best has also placed the debt rating of "bb+" on Coventry's $170.5 million 8.125% 10-year senior unsecured notes, due 2012 under review with negative implications. In addition, A.M. Best has placed the financial strength ratings of A- (Excellent) of the insurance subsidiaries of First Health Group Corporation (First Health) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FHCC FHCC Florida Health Care Coalition FHCC Florida Hurricane Crisis Coalition (Tallahassee, Florida) FHCC Fred Hutchinson Cancer Center (Seattle, Washington) FHCC Federal Health Care Center ) (Downers Grove Downers Grove, village (1990 pop. 46,858), Du Page co., NE Ill.; settled 1832, inc. 1873. Downers Grove has undergone population growth and commercial development that include the construction of new office complexes. , IL) under review with negative implications. These rating actions follow the announcement that Coventry has signed a definitive merger agreement to acquire First Health. The merger, valued at $1.8 billion, is expected to be structured as a combination of cash and common stock. The transaction remains subject to regulatory review and approval. A.M. Best anticipates the merger will be completed in the first quarter of 2005. A.M. Best acknowledges Coventry's successful acquisition and integration strategy. However, A.M. Best has concerns about the size of the First Health acquisition compared to prior Coventry acquisitions, which have been mostly small, single HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, organizations that were purchased with internal cash holdings. Furthermore, some of First Health's product lines, such as workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. , would be new business for Coventry. As this transaction is much larger than prior transactions, integration challenges may exist. Coventry has indicated that there will be no further acquisitions until the First Health integration is substantially completed. A.M. Best will be evaluating the quality and liquidity of Coventry's balance sheet, particularly with regards to the financial leverage and the amount of goodwill created by this transaction. Upon completion of the review and meetings with company management, A.M. Best will determine the appropriate rating action. For a complete list of Coventry Health Care Inc. and First Health Group Corporation's financial strength and debt ratings, please visit http://www.ambest.com/press/101405coventry.pdf. For current Best's Ratings, independent data and analysis on more than 1,050 health companies and more than 130 HMO industry composites, please visit http://www.ambest.com/health/. For a list of A.M. Best's Debt Ratings, please visit http://www.ambest.com/debtratings/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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