S&P affirms DaVita

Standard & Poor's said it affirmed its ratings on DaVita Inc.'s unsecured financing, following the company's $400 million add-on to its unsecured senior notes due March 2013.

The refinancing lowers the company's interest expense by about $4 million, S&P said, adding that the proceeds from the note issuance will be used to repay a portion of its term loan debt.

As a result of this and other debt prepayment, the ratings on the senior secured bank lines, which consist of a $250 million secured revolving credit facility due in 2011, a $280 million senior secured term loan A due in 2011 and a $1.7 billion senior secured term loan B due in 2012, were revised to BB, one notch higher than the corporate credit rating, with a recovery rating of 1, S&P said.

Other existing ratings on DaVita, including the BB- corporate credit rating, were affirmed, the agency added.

The outlook is stable.

S&P added that the ratings on DaVita reflect the company's dependence on the treatment of a single disease, rendering it vulnerable to cuts or insufficient increases in third-party reimbursement rates.

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