Press Release - DECEMBER 20, 2017

A.M. Best Assigns Issue Credit Ratings to Humana Inc.’s Senior Unsecured Notes


CONTACTS:
 Wayne Kaminski
Senior Financial Analyst
+1 908 439 2200, ext. 5061
wayne.kaminski@ambest.com

Joseph Zazzera
Director
+1 908 439 2200, ext. 5797
joseph.zazzera@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - DECEMBER 20, 2017
A.M. Best has assigned Long-Term Issue Credit Ratings of “bbb-” to the recently issued $400 million 2.5% senior unsecured notes due 2020 and the $400 million 2.9% senior unsecured notes due 2022 of Humana Inc. (Humana) (headquartered in Louisville, KY) [NYSE: HUM]. The outlooks assigned to these Credit Ratings (ratings) are stable. All existing ratings for Humana and its subsidiaries are unchanged.

A.M. Best expects Humana to utilize the net proceeds to fund the redemption of notes: $500 million and $300 million with maturity dates of June 15, 2018, and Aug. 1, 2018, respectfully. A.M. Best expects Humana’s financial leverage to remain below 35% at year-end 2017. Additionally, A.M. Best expects Humana’s earnings before interest and taxes (EBIT) interest coverage to be well above 10 times earnings.

The ratings reflect Humana’s strong earnings trend, primarily driven by its senior products, robust cash from operations and strong interest coverage. Humana has a solid business profile, which will improve further following the announced sale of long-term care business. Near term earnings reflect the strong earnings results from Humana’s Medicare Advantage business, which has been a source of growth for a number of years. Cash flows from operations for the nine-month period ending Sept. 30, 2017, totaled approximately $7.0 billion. The results partially reflect the timing of an early $3.1 billion premium payment from CMS and the inclusion of the break-up fee of $1.0 billion from the termination of the proposed Aetna merger.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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AMB# Company Name
058052 Humana Inc.