Fitch lowers WellPoint

Fitch Ratings said it downgraded WellPoint, Inc.'s long-term issuer default rating to A- and its issue ratings to BBB+.

The agency also said it assigned an expected BBB+ rating to WellPoint's planned issuance of senior unsecured notes and affirmed the insurer financial strength ratings of WellPoint's operating subsidiaries at AA-.

The outlook is negative.

The downgrades reflect a significant deterioration in WellPoint's financial leverage metrics resulting from the issuance of debt related to the company's acquisition of Amerigroup Corp., Fitch said.

The agency said it expects WellPoint to fund the majority of the $5 billion purchase price with new debt.

The negative outlook considers the uncertainty around integration of recent acquisitions, the effect of modestly weaker operating performance in recent quarters and management transition following the recent resignation of the company's chief executive officer, Fitch said.

WellPoint's ratings continue to be supported by the company's strong and generally stable historical operating performance, strong competitive position and good statutory capitalization of its operating subsidiaries, the agency added.

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