S&P puts Sierra Health on positive watch

Standard & Poor's said it placed Sierra Health Service Inc.'s BB counterparty credit rating on CreditWatch with positive implications.

The agency said Sierra exceeded its expectations for 2005 by achieving very strong operating performance and double-digit organic enrollment growth. The company's pretax ROR was more than 13% and its average for the five-year period ended Dec. 31 exceeded 8%. The company also strengthened key balance sheet fundamentals by reducing debt and increasing equity, primarily through the conversion of hybrid securities.

As of Dec. 31, financial leverage was 16% and interest coverage of EBITDA exceeded 20x. The company also increased the capital adequacy and liquidity of its regulated health plan subsidiaries in 2005, S&P said.

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