S&P rates Amerigroup loan, convertibles BB

Standard & Poor's said it assigned its BB counterparty credit rating to Amerigroup Corp.

The outlook is stable.

At the same time, S&P said it assigned its BB senior secured debt ratings to Amerigroup's secured credit facilities consisting of a five-year $351.3 million synthetic letter of credit and five-year $50 million revolver, which are both due 2012.

The proceeds will be used mainly to post a bond to stay the enforcement of a judgment in Qui Tam litigation pending the resolution of an appeal by the company and its Illinois subsidiary, the agency said.

The agency added that it assigned its BB senior unsecured debt rating to Amerigroup's proposed five-year $200 million convertible senior notes due 2012 and the proceeds will be used to repay a portion of the amount outstanding under the synthetic letter-of-credit borrowing.

S&P said that the counterparty credit rating on AGP reflects its diverse market presence, good cash flow profile and improving scale of operations.

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