Correction: Fitch Assigns `A' Rating to UnitedHealth Group's Notes.Business Editors CHICAGO--(BUSINESS WIRE)--Nov. 16, 2000 (A previously issued press release incorrectly stated UnitedHealth Group's debt-to-EBITDA ratio. The correct range is .8x. The press release also failed to mention $900 million in credit lines as an external financing In the theory of capital structure, External financing is the phrase used to describe funds that firms obtain from outside of the firm. It is contrasted to internal financing which consists mainly of profits retained by the firm for investment. source. The full correct press release follows.) Fitch has assigned an `A' rating to UnitedHealth Group's (United) issuance of $400 million of 7.5% senior unsecured notes due 2005. At the same time, Fitch has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. all of the existing ratings on UnitedHealth Group UnitedHealth Group Incorporated NYSE: UNH is a managed health care company. It is the parent of United Healthcare, one of the largest health insurers in the U.S. It was created in 1977, as UnitedHealthCare Corporation (it renamed itself in 1998), but traces its origin to a . The rating action affects approximately $1.1 billion of debt and commercial paper outstanding. The Rating Outlook is Stable. The proceeds from the debt issuance are expected to be used primarily to retire outstanding commercial paper. Consequently, there is expected to be no material change to United's financial leverage. The ratings reflect the inherent strength and diversity of United's health services health services Managed care The benefits covered under a health contract operations, good balance sheet fundamentals, strong earnings track record and cash flow-generating power. The ratings also consider difficult conditions in several core markets driven by price competition, higher-than-expected health care costs, and the evolving regulatory and political environment impacting the health care business. Fitch expects United to maintain financial leverage in the 25% range. United's very strong liquidity profile is supported by very strong operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. (debt-to-EBITDA ratio in 0.8 times (x) range) and access to external financing sources, including $900 million in credit lines. Fitch expects earnings- based interest coverage to be in excess of 15x in 2000. United's active share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program is expected to be managed in line with Fitch's expectations for financial leverage. Affirmed Ratings: UnitedHealth Group: --Senior Debt, `A'; --Commercial Paper, `F1'; --Extendible Commercial Notes, `F1'. |
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