S&P gives Humana notes BBB+

S&P said it assigned its BBB+ debt rating to Humana Inc.'s senior unsecured notes.

Humana plans to use the proceeds for general corporate purposes, including the repayment of a portion of its commercial paper borrowings of $955 million at year-end 2021.

“The debt issuance does not affect our BBB+ issuer credit rating on Humana because the transaction will be leverage neutral. Humana's financial leverage is temporarily elevated (45% as of year-end 2021) due to its debt-funded acquisition of home health provider Kindred at Home (KAH) in 2021. As part of its KAH acquisition, Humana issued $3.5 billion of debt and assumed $2 billion of KAH debt (which it paid off with a $2 billion term loan issuance in October 2021). We expect Humana will reduce its financial leverage to its target of about 35% through debt repayment and earnings growth in 2022,” S&P said in a press release.

The outlook is stable.

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