TEXT-S&P cuts HealthCare Partners rating, rating withdrawn
Overview -- DaVita HealthCare Partners Inc. completed its acquisition of HealthCare Partners LLC (HCP) on Nov. 1, 2012. -- We are removing the rating on HCP from CreditWatch, then lowering our 'BBB-' long-term counterparty credit rating on HCP to 'BB-'to be consistent with DaVita's rating. -- We are subsequently withdrawing the rating. Rating Action On Nov. 9, 2012, Standard & Poor's Ratings Services lowered its 'BBB-' long-term counterparty credit rating on HealthCare Partners LLC (HCP) after first removing the rating from CreditWatch with negative implications, where we placed it on May 22, 2012, and assigning a stable outlook. We then withdrew the rating at Davita's request. Rationale We initially placed our rating on HCP on CreditWatch with negative implications on May 22, 2012, when DaVita announced the acquisition. At that time, we stated that we would likely lower the ratings on HCP by three notches to be consistent with our rating on DaVita once the transaction was completed. The acquisition was completed on Nov 1, 2012. HealthCare Partners' outstanding senior secured term loan debt was repaid at transaction closing. HCP's key financial metrics based on year-to-date June 2012 operating results were in line with our expectations. Over the intermediate term, we had expected adjusted debt to EBITDA, funds from operations to adjusted total debt, and adjusted EBITDA interest coverage to be about 1.5x, 50%, and well above 10x,respectively. Related Criteria And Research Use Of CreditWatch And Outlooks, Sept. 14, 2009 Ratings List Downgraded; Outlook Action To From HealthCare Partners LLC Counterparty Credit Rating BB-/Stable/-- BBB-/Watch Neg/-- Ratings Withdrawn To From HealthCare Partners LLC Counterparty Credit Rating NR/--/-- BB-/Stable/-- Senior Secured NR BBB-/Watch Neg Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.