S&P rates Health Management notes A-

Standard & Poor's said it assigned an A- rating to Health Management Associates Inc.'s proposed $400 million senior unsecured notes due 2016 and affirmed the company's A- corporate credit and senior unsecured bank loan rating and BBB+ subordinated debt rating. The outlook is negative.

Proceeds will be used to refinance outstanding revolving credit facility debt that was incurred when the company repurchased its convertible subordinated notes on Jan. 31, as per the exercised put option by noteholders.

S&P said the ratings reflect the company's demonstrated ability to establish and sustain strong positions in growing markets with limited competition, as well as its conservative financial profile and policy.

However, Health Management will continue to be challenged by industry risks, the agency said, such as reimbursement and cost pressures, rising bad debt and weaker patient volume trends. As of Dec. 31, lease-adjusted debt to EBITDA was 1.9x.

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