AM Best has assigned Long-Term Issue Credit Ratings (Long-Term IRs) of “a” (Excellent) to UnitedHealth Group Incorporated’s (UnitedHealth Group) (Minnetonka, MN) [NYSE: UNH] recently issued senior unsecured notes. (See detailed list below.) The outlook assigned to these Credit Ratings (ratings) is stable.

The proceeds from UnitedHealth Group’s recent $12 billion debt issuance are expected to be used for general corporate purposes, including repayment of outstanding commercial paper. At June 30, 2024, the company had approximately $10 billion of commercial paper outstanding. Financial leverage, as measured by AM Best, was approximately 44% at the end of second-quarter 2024. These debt issuances are expected to be neutral to financial leverage in the near term. Financial leverage should moderate but will remain over UnitedHealth Group’s long-term target of 40% for the remainder of 2024. The elevated leverage is mostly driven by loans to providers affected by the Change Healthcare cyberattack. AM Best expects UnitedHealth Group’s financial leverage to return to the 40% range in 2025.

UnitedHealth Group has reported consistent revenue growth and strong operating earnings from its UnitedHealthcare and Optum business segments. Excluding the impact of the sale of its South American operations, net earnings were flat year over year despite $1 billion of tax effected cost for the Change Healthcare cyberattack. A material portion of operating cash flow is from the organization’s non-regulated business, Optum operations, which continue to support overall financial flexibility. UnitedHealth Group’s financial flexibility is supported further by an active commercial paper program, $21 billion revolving credit facility, parent company cash and dividends from the regulated insurance subsidiaries. UnitedHealth Group has consistently expanded its credit facility to support its growing operations and liquidity needs.

The following Long-Term IRs have been assigned with stable outlooks:

UnitedHealth Group Incorporated—

-- “a” (Excellent) on $500 million floating rate senior unsecured notes, due 2026

-- “a” (Excellent) on $650 million 4.75% senior unsecured notes, due 2026

-- “a” (Excellent) on $1.25 billion 4.8 % senior unsecured notes, due 2030

-- “a” (Excellent) on $1.5 billion 4.95 % senior unsecured notes due, 2032

-- “a” (Excellent) on $2 billion 5.15% senior unsecured notes, due 2034

-- “a” (Excellent) on $1.5 billion 5.5% senior unsecured notes, due 2044

-- “a” (Excellent) on $2.750 billion 5.625% senior unsecured notes, due 2054

-- “a” (Excellent) on $1.850 billion 5.75% senior unsecured notes, due 2064

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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