S&P rates Aetna notes A-

Standard & Poor's said it assigned an A- rating on Aetna Inc.'s issuance of $500 million of 10-year senior notes.

Aetna expects to use the majority of the proceeds from the notes to repay its 5.75% senior notes due June 15. In the interim, the company expects to use the proceeds for general corporate purposes, including repayment of short-term debt.

The ratings on Aetna (A-/stable/A-2) are based on the company's well-diversified market profile, improved and stabilized operating performance, strong cash flow generation and liquidity, and very strong financial flexibility, the agency said.

Partially offsetting these positive factors are Aetna's exposure to stressed industry fundamentals and its relatively aggressive share repurchase and stockholder dividend strategy, the agency added.

The key rating constraints include the negative impact that competitive market conditions and the economy could have on industry operating margins, S&P said.

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