Fitch rates Health Net notes BB+

Fitch Ratings said it assigned a BB+ rating to Health Net, Inc.'s issuance of $300 million of senior unsecured notes due May 2017.

The outlook is stable.

The notes are being issued to repay existing indebtedness under Health Net's $300 million term loan due June 23, 2011. As replacement funding, Fitch said it does not expect the issuance to significantly affect the company's financial leverage in terms of debt-to-total capital, which was 17.7% at March 31, or its debt-to-EBITDA ratio, which was 0.6x for the first quarter of 2007, on an annualized basis.

The ratings continue to reflect the company's moderate financial leverage and good competitive position in the health insurance/managed care markets in California, the agency said.

The ratings also reflect industry challenges related to the unsustainable increase in the cost of providing health care, increasing competitive pressures and regulatory and legal challenges, Fitch added.

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