About $1.25 billion of new senior notes issued by UnitedHealth Group Inc. were given an investment grade rating by Moody's Investor Service on Monday.
The long-term notes were rated "A3" with a "Stable" outlook.
Moody's analysts said the rating is based primarily on the company's strong business profile driven by its national presence and brand name, large membership base, and its broad diverse product offerings.
The rating is also supported by a solid financial profile characterized by consistent earnings performance and a conservative and well diversified investment portfolio, Moody's said.
The company also has strong interest coverage from its regulated insurance company, its "A1" insurance financial strength rating and its unregulated operations. Those positives are partially offset by the company's moderate debt and potential liabilities associated with numerous acquisitions over the last several years.
UnitedHealth expects to use the net proceeds of the new debt issuance for general corporate purposes including the payment of short-term commercial paper debt.
Moody's said that with the additional debt, and the expected repayment of short-term debt, UnitedHealth's financial leverage is not expected to change appreciably from its current ratio of approximately 33 percent debt to capital.
Moody's noted that UnitedHealth had approximately $1.7 billion of short-term commercial paper debt outstanding as of Sept. 30.
The new debt issuance is a draw on the company's existing shelf registration filed in February 2011.
UnitedHealth shares fell 48 cents, or 1 percent, to $45.10 in early afternoon trading. Shares are up nearly 25 percent since the beginning of the year. They have traded as high as $53.50 in the past 52 weeks.