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Fitch Upgrades PacifiCare Following Acquisition by UnitedHealth Group.

CHICAGO -- Fitch Ratings has upgraded the long-term issuer rating and the convertible subordinated debentures rating of PacifiCare Health Systems Inc. (PacifiCare) following the announcement yesterday that UnitedHealth Group, Inc. has completed its acquisition of PacifiCare. In addition, Fitch has withdrawn the ratings on PacifiCare's senior unsecured notes and bank debt, as these obligations have been retired. A list of Fitch's ratings on Pacificare are listed below.

Fitch placed the ratings of PacifiCare on Rating Watch Positive on July 7, 2005, following the announcement of the acquisition. UNH (senior debt rated 'A'; Outlook Stable by Fitch) is a leading health care services company with total medical membership of 23.5 million.

Today's rating action reflects Fitch's view that the acquisition by UNH has significantly improved PacifiCare's financial position and will enhance its operating profile. PacifiCare's previous ratings were based, in part, on the company's comparatively weaker balance sheet fundamentals and limited business profile.

The following ratings are withdrawn by Fitch:

PacifiCare Health Systems, Inc.:

-- 10.75% senior unsecured notes due 2009;

-- Bank loan.

The following ratings are upgraded from 'BB+' to 'A' by Fitch, with a Stable Outlook:

-- Long-term issuer.

The following rating is upgraded from 'BB' to 'A-' by Fitch, with a Stable Outlook:

-- 3% convertible subordinated debentures 'BB'.

Fitch's rating definitions and the terms of use 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 are also available from the 'Code of Conduct' section of this site.
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Comment:Fitch Upgrades PacifiCare Following Acquisition by UnitedHealth Group.
Publication:Business Wire
Geographic Code:1USA
Date:Dec 22, 2005
Words:272
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