Sierra Health Services Announces Ratings Upgrades.LAS VEGAS -- Sierra Health Services health services Managed care The benefits covered under a health contract Inc. (NYSE NYSE See: New York Stock Exchange :SIE SIE Sierra Health (stock symbol) SIE Serial Interface Engine SIE Serviciul de Informatii Externe (Romanian: Intelligence Service for the Exterior) SIE Società Italiana di Endocrinologia ) announced today that Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has upgraded the company's senior debt ratings to BBB- from BB+ and issuer default rating to BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. from BBB-. Fitch has also upgraded the insurer financial strength ratings of Sierra's insurance subsidiaries, Health Plan of Nevada Inc. and Sierra Health and Life Insurance Co. Inc., to A- from BBB+. Fitch's Rating Outlook is Stable. With this upgrade, Fitch's ratings on Sierra are considered investment grade. Last week, Standard & Poor's Rating Services raised its counterparty credit rating on Sierra to BB+ from BB and removed it from CreditWatch with positive implications. Standard & Poor's Rating Outlook is now Positive. Both Fitch and Standard & Poor's cited Sierra's key competitive advantages in its core Nevada market, which contributed to sustained earnings, revenue and cash flows, as well as continued membership growth. Fitch specifically referenced the company's improved operating performance, high net income and lack of dividends as a factor in its improved financial flexibility and balance sheet fundamentals. Sierra's combined risk-based capital levels rose to 230% at year-end 2005, which Fitch believes could be raised even further. Standard & Poor's further believes that its rating could be raised if the company sustains its earnings and cash flow levels, among other objectives, and believes that if 2006 earnings expectations are achieved, then Sierra's pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. , debt leverage and interest coverage could be conservative for the rating. "I am pleased that our financial strength is being recognized by the major rating agencies," said Anthony M. Marlon, M.D., chairman and chief executive officer of Sierra. "A lot of focused, dedicated work has taken us through a turnaround at the early part of this decade to our current status as a consistent earnings and cash flow generator with minimal debt." Both rating agencies cited Sierra's dependence on the Nevada market and its vulnerability to competition from large national managed care companies as potential future risk factors. Sierra Health Services Inc., based in Las Vegas, is a diversified health care services company that operates health maintenance organizations, indemnity insurers, preferred provider organizations pre·ferred provider organization n. Abbr. PPO A medical insurance plan in which members receive more coverage if they choose health care providers approved by or affiliated with the plan. , prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, plans and multispecialty medical groups. Sierra's subsidiaries serve nearly 800,000 people through health benefit plans for employers, government programs and individuals. For more information, visit the company's Web site at www.sierrahealth.com. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion