S&P rates Anthem notes BBB+

Standard & Poor's said it assigned its BBB+ senior unsecured debt rating to Anthem Inc.'s $200 million 3.5% notes maturing on Sept. 1, 2007.

Proceeds from the sale of the notes will primarily be used in exchange of the $190 million principal amount of Anthem's outstanding 4.655% subordinated debentures due 2006, which Anthem will cancel and retire.

S&P also said that it withdrew its BBB- rating on the $230 million equity security units issue of Anthem Inc. The equity security units consisted of 5.95% subordinated debentures of Anthem Inc. and a 0.05% stock purchase contract under which the holders will purchase common stock from Anthem Inc. in November 2004. As of Aug. 16, 2004, the purchase contracts were all held with collateral (Treasury securities) pending the November stock purchase date.

"The rating on the notes reflects Anthem's extremely strong consolidated operating performance, excellent competitive positions in the nine states where it holds Blue Cross and Blue Shield (BCBS) licenses, very strong capitalization, very strong liquidity, and strong financial flexibility," explained S&P credit analyst Shellie Stoddard.

Anthem's merger with WellPoint Health Networks Inc. is pending, with all insurance regulators having granted approval except the California insurance commissioner, who issued a disapproval. Anthem has filed a lawsuit against the California insurance commissioner challenging his decision.

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