Business Services Industry

S&P Rates Anthem Inc.'s Commercial Paper Prgm 'A-2'

Business Wire, March 10, 2003

Business Editors

NEW YORK--(BUSINESS WIRE)--March 10, 2003

Standard & Poor's--Standard & Poor's Ratings Services said today that it assigned its 'A-2' rating to Anthem Inc.'s 4(2) privately placed commercial paper program of up to $1 billion based on Anthem's 100% back-up credit facility as well as its strong financial flexibility, extremely strong earnings, and excellent business positions in the nine states where it holds Blue Cross and Blue Shield (BCBS) licenses.

The rating is somewhat constrained by Standard & Poor's expectation that Anthem will make some sizable acquisitions as part of its strategy to be a major consolidator of BCBS Plans.

"Anthem ranks among the five largest health insurance organizations in the U.S., with more than 11 million medical members and nearly $13 billion in consolidated health revenues at year-end 2002," said Standard & Poor's credit analyst Shellie Stoddard. It holds leadership positions in each of its core markets. The company has gained considerable geographic diversification, with BCBS operations in nine states (including the recent acquisition of Trigon Healthcare Inc.). Anthem also has a pending acquisition of Blue Cross Blue Shield of Kansas Inc. In addition, Anthem offers pharmacy benefit management, dental and vision administration services, group life and disability insurance benefits, and behavioral health benefits services in its markets and administers Medicare benefits for the federal government.

Anthem's earnings profile is extremely strong. Consolidated pretax earnings were $807.6 million at year-end 2002, which includes five months of the Trigon operations, compared with $524.6 million for the same period in 2001.

Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions.