S&P rates HealthSpring loans B+

Standard & Poor's said it assigned B+ senior secured debt ratings to HealthSpring Inc.'s planned $150 million new term loan A due in 2015 and $250 million term loan B due in 2016.

The proceeds will be used to help finance HealthSpring's $545 million acquisition of Bravo Health Inc.

The new term loans will have the same collateral package as its existing amended credit facilities and similar financial covenants.

The ratings reflect weaknesses that include its narrow product scope in Medicare programs, limited geographic diversification and a slight capital deficiency at the regulated subsidiaries, the agency said.

S&P said it believes reduced government funding of the Medicare Advantage program over the next 10 years will likely hurt HealthSpring's long-term operating margins.

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