S&P Global Ratings said it had lowered the rating to A from A+.
"At the same time, we removed the ratings from CreditWatch with negative implications. The outlook on the ratings is negative."
The rating action on One Path follows the downgrade of its US-based parent, Cigna to "A-/Negative/A-2" from "A/Watch Neg/A-1" due to Cigna's acquisition of Express Scripts Holdings.
S&P said the A ratings on One Path reflected the insurer's strong competitive position and strong capital and earnings position, and were equivalent to both its standalone credit profile (SACP) and parent rating.
"While we no longer factor uplift into the ratings on OPLNZ above its SACP, we consider that Cigna is still likely to provide support if required, given that its services are complementary to Cigna's existing capabilities and international strategy, and benefit Cigna's broader operations in New Zealand. The overall ratings on OPLNZ are capped by those on its parent, Cigna. The negative outlook on OPLNZ principally reflects the outlook on the group," S&P said.
"We would lower our rating on OPLNZ over the next two years if we were to downgrade Cigna and its core operating subsidiaries. This would occur if Cigna encounters business or integration setbacks and cannot reduce adjusted leverage in 2019-2020. We could also lower the ratings on OPLNZ if its SACP weakens, which may occur due to: A weakening in the entity's capital structure (including dividend policy and investment and reinsurance strategies); or a substantial disruption to operations as a result of integration challenges. We would revise the outlook to stable if we revised the outlooks on Cigna and its core operating subsidiaries to stable."
Gail Costa, chief executive of Cigna NZ, said: “This is quite a common scenario where debt funding is used to finance an acquisition. There is no material impact on our New Zealand operations. Our customers have the same support from us today, as they did yesterday, and will have tomorrow. We remain committed to doing the best we can for all New Zealanders.”
She said there was no change to Cigna New Zealand's financial position.
Cigna New Zealand remains an A (Excellent) financial strength rating from A.M. Best Company, its insurance rating provider.
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