The cost of the transaction is estimated at approximately $13 billion, including the retirement of Change Healthcare's current debt. AM Best anticipates that UnitedHealth Group will finance the transaction through a combination of debt and cash, and the transaction will close in the second half of 2021 once the necessary approvals are received. Additionally, while this transaction initially will increase UnitedHealth Groups' financial leverage, AM Best expects it to remain within the tolerance for the current rating level. Furthermore, financial leverage will moderate in the medium term, based on equity growth and/or management's capital deployment strategy. UnitedHealth Group manages its debt-to-capital ratio at 40% on a long-term basis and the company has demonstrated its ability to de-leverage to its target range in a relatively short time. However, UnitedHealth Group maintains strong interest coverage, which was greater than 11 times for full-year 2019. UnitedHealth Group also has a high level of financial flexibility, supported by its large commercial paper program, parent company cash and substantial subsidiary dividend capacity, as well as its $12.5 billion revolving credit facility. Furthermore, UnitedHealth Group has significant non-regulated operating earnings and cash flows from its Optum operations, which include OptumRx, OptumCare and OptumInsight.

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