S&P rates Aveta loans B-

Standard & Poor's said it assigned its B- counterparty credit rating to Aveta Holdings LLC, which is a new holding company formed to consolidate the managed care operations of two affiliated holding companies.

The outlook is stable.

At the same time, S&P said it assigned its B- senior secured debt ratings to Aveta's proposed $420 million senior secured credit facilities consisting of a six-year, $400 million term loan due 2011 and a five-year, $20 million revolver due 2010.

Aveta's capital structure is expected to be very debt intensive and its assets mostly intangibles and S&P said it considers this to be a material qualitative constraint on the rating assignment as debt to capital is expected to be 115%-125% and intangibles are expected to constitute more than 70% of the company's asset base at year-end 2005, S&P said.

Partially offsetting these negative factors are the company's good earnings profile underscored by historically strong ROR, its established competitive niche market positions in a key market public sector market with good organic growth prospects and its focused operational skill sets, the agency noted.

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