S&P lifts Heartland Dental

Standard & Poor's said it raised its rating on Heartland Dental Care LLC's $100 million first-lien revolving credit facility and $400 million first-lien term loan to B+ from B.

The agency said it raised the rating on this first-lien debt because the amount is $50 million less than originally proposed. S&P said it therefore estimates a higher recovery for first-lien lenders in the event of default.

The agency revised the recovery rating on the first-lien debt to 2, indicating an expectation for substantial recovery of principal in the event of payment default, from 3.

The B/stable corporate credit rating on Heartland is unaffected by the revised capital structure, as is the CCC+ rating on Heartland's second-lien debt.

Although Heartland issued $50 million more second-lien debt and interest rates on all new debt were higher than proposed, S&P said it expects EBITDA interest coverage, now projected to be 2.2x in 2013, compared with the previous estimate of 2.3x, to remain consistent with the rating.

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