In a report published today, Fitch Ratings said that it expects health insurance and managed care companies' interest coverage to remain solid through the second half of 2012 despite some negative trends.
The agency believes that the publicly traded health insurers and managed care companies it monitors will generate second-half 2012 EBITDA-based interest coverage ratios in the 10x to 13x range. This projection represents a modest decline from first-half 2012's EBITDA-based coverage ratio of 14.1x. Fitch believes that second-half 2012 earnings and interest coverage will be pressured by declining EBITDA-based margins and modest increases in financial leverage and interest expense.
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