Fitch affirms Cigna

Fitch Ratings said it affirmed Cigna Corp.'s BBB+ issuer default rating and related ratings.

The actions follow news that Cigna entered into a definitive agreement to acquire Health Spring Inc. in exchange for $3.8 billion in cash.

The outlook remains stable.

The affirmations reflect a belief that the acquisition will diversify Cigna's revenues and earnings by providing a platform for expansion into the Medicare Advantage market, a market the company currently does not have a meaningful presence in, Fitch said.

The agency also said it believes the transaction's financing represents a significant increase in Cigna's financial leverage.

The transaction also will generate a substantial amount of goodwill, which will adversely affect the quality of Cigna's balance sheet, Fitch said.

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