S&P Asgns Various Rtgs to Aetna US Hlthcare; Otlk Neg.Business Editors NEW YORK--(BUSINESS WIRE)--Standard & Poor's Nov. 15, 2000--Standard & Poor's today assigned its single-'A'-minus issuer credit rating and 'A-2' commercial paper rating to Aetna US Healthcare Inc. (AUSHC AUSHC Aetna US Healthcare ). The outlook is negative. Aetna Life Insurance Co. (ALIC ALIC Advanced Learning Infrastructure Consortium ALIC Arid Lands Information Center ALIC Allstate Life Insurance Company ALIC Aircraft Launcher Interface Computer ALIC Asset Limited, Income Constrained ) became a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of AUSHC on Nov. 3, 2000. Ownership of ALIC was transferred from Aetna Inc. (Aetna) to AUSHC as part of the realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of Aetna's business units prior to the sale of its financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and international businesses to ING GROEP N.V. (ING). This sale is expected to take place in December 2000. The surviving corporate entity will consist of AUSHC and its 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, subsidiaries; various HMOs, including some acquired from NYLCare Health Plans Inc. and Prudential Insurance Co. of America; a number of smaller insurance companies that are part of Aetna's health care business; and ALIC. AUSHC will also retain Aetna's group insurance, dental insurance Dental insurance is insurance designed to pay the costs associated with dental care. Dental insurance pays a portion of the bills from dentists, hospitals, and other providers of dental services. , large case pension, and global benefits businesses. AUSHC will also change its name to Aetna Inc. (New Aetna). Aetna's existing long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. will be assumed by ING as part of the sale, but AUSHC will issue commercial paper to replace existing commercial paper issued by Aetna. AUSHC's total outstanding debt under this program will be about $1.5 billion-$2.0 billion prior to the sale and thereafter could be up to $2.5 billion, which will result in a debt-to-total capital ratio of 17%-20%. AUSHC has committed backup facilities for 100% of the commercial paper under these scenarios. AUSHC's very strong business position and profitable operations in group health and life are expected to continue, and the consolidated entity is expected to be capitalized at a level considered good under Standard & Poor's capital adequacy model. ALIC is core to AUSHC's health benefits business and is expected to retain a similar business and financial profile, following the ING transaction, to its current one. Upon completion of the transaction, Standard & Poor's expects to remove from CreditWatch and affirm its single-'A'-plus financial strength rating on ALIC. (This rating was placed on CreditWatch on Aug. 17, 2000 with negative implications.) The outlook will likely be the same as that of its parent, New Aetna. OUTLOOK: NEGATIVE The outlook on the issuer credit rating on New Aetna is negative, reflecting the challenges the company will face in improving its earnings in a period of expected increased medical cost inflation, during which its strategy is focused on improving relations with providers, Standard & Poor's said. - CreditWire |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion