A.M. Best Assigns Rating to Forthcoming Senior Unsecured Notes to Be Issued by WellPoint Inc

Business Wire, Dec 9, 2004

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "a-" to the forthcoming senior unsecured notes to be issued by WellPoint Inc. (WellPoint) (NYSE: WLP) (Indianapolis, IN) in four tranches for a total of $1.6 billion. The tranches are expected to be as follows: $300 million 3.75% due 2007; $300 million 4.25% due 2009; $500 million 5.0% due 2014 and $500 million 5.95% due 2034. Concurrently, A.M. Best has affirmed the issuer credit rating of "a-" and the outstanding debt ratings of WellPoint. The outlook for all ratings is stable.

The proceeds from the offering will be used to repay borrowings related to the recent merger of WellPoint Health Networks Inc. and Anthem, Inc. and to repurchase a substantial portion of the outstanding $300 million 9.125% surplus notes due 2010 and $200 million 9.0% surplus notes due 2027 issued by Anthem Insurance Companies Inc.

WellPoint's financial leverage remains within industry norms of 20%-25%, and coverage remains strong at more than 10 times. The insurance operating subsidiaries, which provide dividends to meet the holding company's cash needs, are well capitalized and have reported strong earnings both historically and for the first nine months of 2004.

Offsetting factors include increased goodwill and intangibles from the merger, which have resulted in goodwill and intangibles to equity ratio of more than 90%. While this ratio should decrease over time, it is expected to remain high. These factors, combined with the large amount of borrowings, have the potential to create a weaker holding company.

For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debt.> For current Best's Ratings, independent data and analysis on more than 1,050 health companies and more than 130 HMO industry composites, please visit http://www.ambest.com/health/.> A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.