(Adds Moody’s comments, financing details)
By Paul Kilby
NEW YORK, July 24 (IFR) – US health insurer Anthem said on Friday that Bank of America, Credit Suisse and UBS have committed to a US$ 27bn bridge to back its US$ 54.2bn acquisition of rival Cigna Corp, according to RLPC.
Anthem plans to pay US$ 188 per share with 55% funded through cash and 45% through Anthem stock.
Funding will take the form of US$ 6bn in cash, US$ 21bn of equity and about US$ 22bn in new debt and commercial paper, according to Moody’s.
“(We) are committed to retaining investment grade ratings,” said the company, which carries domestic senior unsecured ratings of Baa2/A/BBB by Moody’s, S&P and Fitch.
Anthem expects its debt-to-capital ratio to be around 49% following the close of the transaction, and aims to reduce that to the low 40% range within 24 months.
Moody’s put Anthem’s Baa2 senior unsecured debt ratings on review for downgrade on Friday, citing the increased financial leverage from an acquisition that includes the assumption of US$ 5.1bn of Cigna notes. Morgan Stanley was the financial advisor for Cigna. (Reporting by Paul Kilby; Editing by Shankar Ramakrishnan)
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