AM Best has assigned Long-Term Issue Credit Ratings (Long-Term IR) of 'bbb+' to the new senior unsecured notes of
The offering consists of
Proceeds of these notes issuances are expected to be used for working capital and general corporate purposes, including repayment of short-term and long-term debt, share repurchase and to fund acquisitions. Anthem has two debt issues totaling
AM Best expects that the issuance will not have a major impact on financial leverage, as Anthem will increase the total amount of debt outstanding modestly for 2020. Anthem's financial leverage, as calculated by AM Best, was 41.4%, and interest coverage is good at over eight times and has improved through year-end 2019. Based on discussions with management, AM Best expects Anthem's financial leverage to continue to moderate somewhat over time, through the elimination of existing debt and an increase in equity through retained earnings. However, AM Best acknowledges that COVID-19 may cause this process to decelerate for the remainder of the year, as the organization seeks ways to maintain strong liquidity.
Anthem maintains very good liquidity through favorable cash flows from its various operating subsidiaries. Additional sources of contingent liquidity for the organization are Anthem's cash and investments and
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