Moody's ups Coventry Health

Moody's Investors Service said it upgraded Coventry Health Care, Inc.'s senior unsecured debt rating to Baa3 from Ba1, senior unsecured credit facility to Baa3 from Ba1 and corporate family rating to Baa3 from Ba1.

The insurance financial strength ratings of the three rated Coventry operating subsidiaries were upgraded to A3 from Baa1.

The outlook is stable.

The upgrade concludes a review that began in May.

The upgrades reflect the company's improved earnings outlook, Moody's said.

The agency noted that Coventry's financial profile continues to improve with a pattern of strong earnings margins in 2010, which was maintained during the first half of 2011 and is expected to be sustained.

Another key consideration in the upgrade was Coventry's commitment to maintain a consolidated 200% risk-based capital ratio at company action level, the agency said.

These improvements were significant enough to override concerns about the sector and the slow economic recovery, the agency said.

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