TEXT - S&P raises Amerigroup rating to A-minus

Wed Dec 26, 2012 2:37pm EST

Overview
     -- WellPoint Inc. completed its acquisition of Amerigroup Corp. on Dec. 
24, 2012.
     -- We raised our counterparty credit rating on Amerigroup to 'A-' from 
'BB+'.
     -- The stable outlook is based on our expectation that Amerigroup will 
remain a core entity within WellPoint.
Rating Action
On Dec. 26, 2012, Standard & Poor's Ratings Services raised its long-term 
counterparty credit rating on Amerigroup Corp. (AGP) to 'A-' from 'BB+'. At 
the same time, we removed the rating from CreditWatch with positive 
implications, where we placed it on July 9, 2012. The outlook is stable.

Rationale
Our four-notch upgrade of AGP following its acquisition by WellPoint Inc. is 
based on our designation of AGP as a core entity within WellPoint Inc. Based 
on our group rating methodology, we allow for more than three notches of 
rating support for core entities. AGP will now operate as wholly owned 
intermediate holding company under WellPoint Inc. AGP's group of health plans 
collectively supports the enterprise strategy, and the acquisition of AGP is 
in line with WellPoint's strategy to increase its market presence in the 
Medicaid segment. WellPoint has a significant existing presence in the 
Medicaid segment.
Outlook
The stable outlook is based on our expectation that AGP will remain a core 
entity within WellPoint Inc. Failure of WellPoint to support AGP, or 
significant loss/nonrenewal of Medicaid contracts within AGP's core markets 
would cause us to reevaluate AGP's core group status and our rating on the 
company.

Related Criteria And Research
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Group Methodology, April 22, 2009

Ratings List
Upgraded; CreditWatch/Outlook Action
                                        To                 From
Amerigroup Corp.
 Counterparty Credit Rating
  Local Currency                        A-/Stable/--       BB+/Watch Pos/--
 Senior Unsecured                       A-                 BB+/Watch Pos
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