S&P rates Capella notes B

Standard & Poor's said it assigned its B rating - the same as the corporate credit rating - to Capella Healthcare Inc.'s proposed $500 million unsecured notes maturing in 2017.

The recovery rating on this debt issue is 4.

The company also plans to issue a new $100 million asset-backed credit facility, which the agency said it does not rate.

At the same time, the agency said it affirmed its ratings on Capella, including the B corporate credit rating. The outlook is stable.

"The low speculative-grade rating on Capella reflects the company's highly leveraged financial risk profile," said credit analyst David P. Peknay.

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