S&P rates HealthSpring loans B+

Standard & Poor's said it assigned a B+ issue-level rating to HealthSpring Inc.'s new $350 million senior credit facilities, which consist of a five-year $175 million term loan and a four-year $175 million revolver, and affirmed its B+ counterparty credit rating.

The outlook remains stable.

HealthSpring used funds borrowed under its new credit facilities, along with cash on hand, to pay down $237 million in outstanding term loans under the previous credit facilities, which were originally scheduled to mature in October 2012.

The agency said the rating on HealthSpring reflects strengths such as its established niche market position in Medicare Advantage and Medicare Part D products, a good earnings profile based on historical and prospective operating margins and a conservative, liquid investment portfolio.

Conversely, rating weaknesses include the company's narrow product scope, limited geographic diversification, the historical level of capitalization at the regulated subsidiaries (which is improving) and large amount of goodwill and intangibles on the balance sheet, S&P said.

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