Anthem locks in bank financing for Cigna purchase

By Paul Kilby

NEW YORK (IFR) - U.S. health insurer Anthem said on Friday that Bank of America, Credit Suisse and UBS have committed to a $27 billion bridge to back its $54.2 billion acquisition of rival Cigna Corp, according to RLPC.

Anthem plans to pay $188 per share with 55 percent funded through cash and 45 percent through Anthem stock.

Funding will take the form of $6 billion in cash, $21 billion of equity and about $22 billion in new debt and commercial paper, according to Moody's.

"(We) are committed to retaining investment grade ratings," said the company, which carries domestic senior unsecured ratings of Baa2/A/BBB by Moody's, S&P and Fitch.

Anthem expects its debt-to-capital ratio to be around 49 percent following the close of the transaction, and aims to reduce that to the low 40 percent range within 24 months.

Moody's put Anthem's Baa2 senior unsecured debt ratings on review for downgrade on Friday, citing the increased financial leverage from an acquisition that includes the assumption of $5.1 billion of Cigna notes. Morgan Stanley was the financial advisor for Cigna.

(Reporting by Paul Kilby; Editing by Shankar Ramakrishnan)