Fitch Upgrades Coventry Health Care's IDR to 'BBB'; Rates New Sr Notes 'BBB-'.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has upgraded the Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) 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
Fitch upgraded the ratings on Coventry to reflect improved financial performance in the company's insurance operations over the last several years. Steady improvements in the company's benefit and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. across all product lines have led to growth in consolidated operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Fitch also believes that earnings growth, strong cash flow and a conservative investment portfolio are reflected in Coventry's strengthened risk adjusted capital ratio. Fitch cautions that relative to the company's size, the goodwill generated from Coventry's acquisitions comprise a sizeable portion of its balance sheet assets. The company also maintains a larger portion of underwritten business relative to less risky self-funded business than do most of its managed care peers. Coventry's notes are being issued with a 10-year maturity. The 10-year notes will pay a coupon of 5.95% and will mature in 2017. Proceeds from the offering are targeted for general corporate purposes. Fitch's rating on Coventry's debt issuance takes into account its moderate debt to capital ratio and good interest coverage. Coventry is a publicly traded managed health care company serving approximately 2.5 million members primarily in the Mid-Atlantic, Midwest and Southeast regions of the U.S. Coventry reported total operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $7.7 billion and stockholders equity of $2.9 billion at Dec. 31, 2006. Fitch rates the following, with a Stable Outlook: Coventry Health Care Inc. --$400 million of 5.95% senior unsecured notes due 2017 at 'BBB-'. Fitch upgrades the following, with a Stable Outlook: Coventry Health Care Inc. --Issuer Default Rating to 'BBB' from 'BB+'; --$250 million 5.875% senior unsecured notes due 2012 to 'BBB-' from 'BB'; --$250 million 6.125% senior unsecured notes due 2015 to 'BBB-' from 'BB'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. The ratings above have been initiated by Fitch as a service to investors. The issuer did not participate in the rating process other than through the medium of its public disclosure. |
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