TEXT-S&P rates DaVita proposed senior notes B

Tue Aug 14, 2012 10:11am EDT

Aug 14 - Standard & Poor's Ratings Services said today that it assigned
ratings to the proposed $1 billion senior notes due 2022 to be issued by DaVita
Inc.,      a Denver-based dialysis service provider. We rate the notes
'B', two notches below the corporate credit rating, with a recovery rating of
'6', indicating our expectation for 
negligible (0 to 10%) recovery of principal in the event of payment default. 
DaVita intends to use the proceeds to fund a portion of its acquisition of 
Torrance, Calif.-based HealthCare Partners Holdings LLC (HCP), parent of 
HealthCare Partners LLC (BBB-/Watch Neg/--). 

Our 'BB-' corporate credit rating and stable rating outlook on DaVita are not 
affected by this issuance. Our rating reflects DaVita's "aggressive" financial 
risk profile (according to our criteria), distinguished by robust 
discretionary cash flow, which will enable fairly rapid deleveraging following 
its acquisition of HCP. We estimate pro forma adjusted debt to EBITDA is about 
4.5x, compared with DaVita's actual adjusted leverage of 3.5x as of June 30, 
2012. We believe DaVita's acquisition of HCP does not alter its "fair" 
business risk profile, because DaVita will remain substantially dependent on 
the treatment of a single disease and its exposure to potential adverse 
changes in reimbursement may be compounded by the addition of HCP to its 
business portfolio. (For the latest complete corporate credit rating 
rationale, see Standard & Poor's research update on DaVita, published July 27, 
2012, on RatingsDirect.)


RELATED CRITERIA AND RESEARCH
     -- Credit FAQ: How Standard & Poor's Evaluates U.S. Health Care Service 
Companies That Invest In Joint Ventures, Oct. 20, 2011
     -- Methodology And Assumptions: Liquidity Descriptors For Global 
Corporate Issuers, Sept. 28, 2011
     -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
     -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008

RATING LIST
DaVita Inc.

Corporate credit rating                BB-/Stable/--

Rating Assigned
Proposed $1 bil. sr. notes due 2022    B
 Recovery rating                       6
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