ELEVANCE HEALTH, INC.
Fitch Ratings has assigned a 'BBB+' rating to
The existing ratings assigned to Elevance and its subsidiaries are not affected by today's rating action.
Key Rating Drivers
Proceeds from the issuance are expected to be used for general corporate purposes, including the repayment of debt maturing later in 2024 and funding acquisitions. The issuance is expected to modestly increase financial leverage ratios, but not trigger any rating sensitivities.
At 1Q24, debt-to-EBITDA and the financial leverage ratio (FLR) were 2.5x and 39%, respectively. Net of
The ratings assigned to the new senior notes are equivalent to Fitch's ratings on Elevance's existing senior notes.
Relevant Rating Committee:
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade
Debt-to-EBITDA ratio above 3.0x or an FLR above 43% on a sustained basis;
EBITDA-based interest coverage ratios below 7x on a sustained basis;
EBITDA-to-revenue margins and net returns on average capital less than 7% and 5%, respectively on a sustained basis;
Organization-wide NAIC RBC ratio (company action level [CAL] basis) falling below 235% on a sustained basis.
Factors that could, individually or collectively, lead to positive rating action/upgrade
Debt to EBITDA below 2.1x and a FLR below 35%;
Sustained organization-wide NAIC RBC ratios (CAL basis) above 275%;
Sustained EBITDA-based interest coverage ratios above 10x;
Sustained EBITDA-to-revenue margins above 8% and net returns on average capital above 9%.
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
RATING ACTIONS
Entity / Debt
Rating
senior unsecured
LT
BBB+
New Rating
Page
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Additional information is available on www.fitchratings.com
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