CVS Health 'BBB+' Long-Term Ratings Put On Watch Negative On Announced Acquisition Of Aetna; One-Notch Downgrade Likely

U.S. pharmacy services and drugstore retailer CVS Health Corp. has announced that it intends to purchase health insurance provider Aetna Inc. for about $69 billion, the majority of which will be funded with debt. CVS expects the transaction to close in the second half of 2018, subject to shareholder and regulatory approvals. In our view, CVS' financial risk profile will weaken considerably as a result of the significant increase in debt, given the scale of the acquisition as well as execution risks that could affect operating performance. We are placing our 'BBB+' long-term ratings on CVS and its debt on CreditWatch negative and affirming our 'A-2' short-term ratings. We intend to resolve the CreditWatch, likely by lowering the corporate credit

...+ U.S. pharmacy services and drugstore retailer CVS Health Corp. has announced that it intends to purchase health insurance provider Aetna Inc. for about $69 billion, the majority of which will be funded with debt. + CVS expects the transaction to close in the second half of 2018, subject to shareholder and regulatory approvals. + In our view, CVS' financial risk profile will weaken considerably as a result of the significant increase in debt, given the scale of the acquisition as well as execution risks that could affect operating performance. + We are placing our '###+' long-term ratings on CVS and its debt on CreditWatch negative and affirming our 'A-2' short-term ratings. + We intend to resolve the CreditWatch, likely by lowering the corporate credit rating on CVS by one notch, when more information regarding the transaction and financing becomes available. NEW YORK (S&P Global Ratings) Dec. 4, 2017--S&P Global Ratings said today that it has placed its '###+' long-term corporate credit...

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