Moody’s could cut Cigna

Moody's Investors Service said it placed the Baa1 senior debt ratings of Cigna Corp. on review for downgrade following the announcement that Anthem, Inc. (senior debt at Baa2/ratings on review for downgrade) entered into a definitive agreement to acquire Cigna for $54 billion.

The purchase price includes the assumption of $5.1 billion of Cigna's senior long-term notes and other related transaction fees.

The A1 insurance financial strength ratings of Cigna's operating subsidiaries were also placed on review for downgrade.

Moody's anticipates that Anthem will assume Cigna's $5.1 billion of senior notes upon the close of the transaction. The transaction, which is subject to shareholder and regulatory approval, as well as other closing conditions, is expected to be completed at the end of 2016.

The agency said its review of Cigna's ratings (which are currently higher than Anthem's ratings) will focus on the completion of the transaction and the impact on Anthem's ratings, as well as the integration plans for the two businesses going forward.

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