A.M. Best Assigns Debt Rating to Aetna, Inc

Business Wire, Nov 30, 2007

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bbb " to the $700 million 6.75% senior unsecured notes, due 2037 issued by Aetna Inc. (Aetna) (Hartford, CT) (NYSE: AET). The senior notes were issued from Aetna's existing universal shelf registration filed December 5, 2005. The outlook for the rating is stable. The financial strength and issuer credit ratings assigned to Aetna and its insurance subsidiaries remain unchanged.

Proceeds from this offering are expected to be used by Aetna to repay its outstanding commercial paper balance, which was approximately $535 million as of September 30, 2007 and to the extent of any remaining proceed, for general corporate purposes including share repurchases.

Due to this offering, Aetna's financial leverage is expected to increase modestly from its current level of 24% to approximately 25%, which is within its targeted range of 25%-30%. Aetna generates sound financial returns and has strong liquidity, with coverage at approximately 16 times in the near term. Aetna's financial flexibility is supported by its $1 billion commercial paper program, parent company cash and good dividend capacity from its subsidiaries. Aetna's positive operating earnings are being driven by a stable medical trend, an improved administrative cost ratio and profitable organic membership growth. Aetna's continued favorable net income has contributed to its solid capital levels and strong cash flow.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.