AM Best Assigns Issue Credit Ratings to Cigna Corporation’s New Senior Unsecured Notes and Indicative Shelf Registration

AM Best has assigned the Long-Term Issue Credit Ratings (Long-Term IRs) of “bbb” to the $1.5 billion 2.4% senior unsecured notes due 2030, $750 million 3.2% senior unsecured notes due 2040 and the $1.25 billion 3.4% senior unsecured notes due 2050 recently issued by Cigna Corporation (Cigna) (headquartered in Bloomfield, CT) [NYSE:CI]. Furthermore, AM Best has assigned indicative Long-Term IRs of “bbb” to senior unsecured debt and “bb+” to preferred shares under the recently filed shelf registration. The outlook assigned to these Credit Ratings (ratings) is stable. The existing ratings of Cigna and its subsidiaries are unchanged (see related press release).

The proceeds of the recent $3.5 billion of aggregate debt, issued on March 4, 2020, will be used to redeem/tender upcoming 2021, 2022 and 2023 higher coupon issues.

Cigna maintains high financial leverage of approximately 47%, including the current debt issues, and a high level of goodwill and intangibles – the increase in both metrics primarily was related to the Cigna-Express Scripts Inc. acquisition. However, Cigna has moderated its leverage post transaction, which was over 50%, and Cigna remains committed to an accelerated deleveraging during 2020, which is expected to leave financial leverage closer to 40% by the end of the year. AM Best expects financial deleveraging to be driven by the strong earnings and dividends from Cigna’s insurance entities, solid nonregulated earnings from its health services segment and additional one-time capital sources, such as a portion of the proceeds from the pending sale of its group employee benefits business, which is expected to help reduce outstanding debt.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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