TEXT-S&P rates Humana Inc. planned notes 'BBB'

Dec 5 - Standard & Poor's Ratings Services said today that it has assigned
its 'BBB' senior unsecured debt rating to Humana Inc.'s (NYSE: HUM)
(BBB/Positive/--) planned issuance of approximately $1 billion in senior
unsecured notes. This issuance will consist of a mix of 10-year and 30-year
maturities.

We expect Humana to use the debt proceeds to fund its pending acquisition of
Metropolitan Health Networks Inc. (B+/Watch Pos/--), a Florida-based medical
services organization (MSO). The transaction has already received federal
antitrust clearance and we expect it to close by year-end 2012.

The ratings are based on Humana's strong market shares in Medicare Advantage
and Medicare Part D, favorable business growth trends, very strong
risk-adjusted capitalization at the regulated insurance subsidiaries, and
strong liquidity and financial flexibility. Slightly offsetting these
strengths are Humana's very high business concentration in government-funded
business, a historically underperforming commercial health insurance business,
and the ongoing integration risks associated with an active M&A strategy.

Strategically, the Metropolitan Health transaction makes sense in relation to
Humana's growth needs and its overall integrated delivery strategy. Humana has
experienced substantial Medicare-based growth nationally during the past
several years. With its latest round of acquisitions, which has focused on
MSOs and primary-care assets, Humana is effectively looking to gain more
control over its provider base. This will allow it to better service its
growing membership and more effectively execute its medical and
care-management programs.

Financially, Humana has enough balance sheet flexibility, from a holding
company cash and debt leverage perspective, to acquire Metropolitan Health
without any rating implications. As of Sept. 30, 2012, the holding company had
total cash and short-term investments of $522 million. With the new debt
issuance, Humana's adjusted debt-to-capital ratio increases from 21% as of
Sept. 30, 2012, to 28% on a pro-forma adjusted basis. This is consistent with
our long-term expectations that Humana will keep its debt-to-capital ratio in
the 25%-30% range.

RELATED CRITERIA AND RESEARCH
Holding Company Analysis, June 11, 2009

RATINGS LIST
Humana Inc.
Counterparty Credit Rating BBB/Positive/--

New Rating
Humana Inc.
10-Yr. And 30-Yr. Sr. Unsec. Notes BBB

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