Moody's gives HealthSpring loan Ba3

Moody's Investors Service said it assigned a Ba3 senior debt rating to HealthSpring, Inc.'s proposed senior secured credit facility, consisting of a $300 million term loan and a $100 million revolving credit facility.

Proceeds from the term loan will be used to finance the acquisition of Leon Medical Centers Health Plans, Inc., the agency noted.

In conjunction with this rating, Moody's said it also assigned a corporate family rating of Ba3 to HealthSpring and Ba1 insurance financial strength ratings to HealthSpring's regulated operating subsidiaries: HealthSpring of Tennessee, Inc., Texas HealthSpring, LLC and HealthSpring of Alabama, Inc.

The outlook is stable.

Moody's added that the company's ratings are driven by its concentration in the Medicare market, small membership base, limited geographic area and comparatively low consolidated NAIC risk-based capital level, offset by a relatively stable earnings profile and moderate financial leverage.

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