S&P rates WellCare Health notes BB

S&P said it assigned its BB debt rating to WellCare Health Plans Inc.'s senior notes due 2026.

The company plans to use the debt proceeds, along with cash on hand, revolver borrowings and new equity, to fund its $2.5 billion purchase of Meridian Health Plans.

WellCare expects the acquisition to close within the next few months, S&P said.

“The debt issuance does not affect our BB long-term counterparty credit rating on WCG. We believe the acquisition has strategic merit and carries manageable integration and financial risk,” the agency said in a news release.

“We expect WCG to reduce financial leverage from the low-end of 40%-45% (post-deal) to 35%-40% in 2019.”

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