Moody's rates Express Scripts notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to Express Scripts, Inc.'s proposed offering of up to $2.5 billion in senior unsecured notes.

Proceeds will be used to pre-fund the acquisition of WellPoint's NextRX PBM business.

The outlook is stable.

Ratings assume that Express Scripts will sell $3.9 billion in bonds and equity and that the acquisition will close later this year.

Moody's said the deal will add significant scale to the company's business profile, solidly positioning Express Scripts among the top players in the market.

"The acquisition of NextRx reduces uncertainty associated with event risk following Express Scripts' 2007 bid for Caremark," Diana Lee, a vice president at Moody's, said in a statement.

"However, concentration risk increases and a long-term contract with WellPoint carries pricing and membership risk," Lee said.

A weak economy and declining commercial membership, possible changes in the industry pricing benchmark and health reform initiatives create some uncertainty for the sector, the agency added.

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