S&P: Sierra Health positive

Standard & Poor's said it revised its outlook on Sierra Health Services Inc. to positive from stable and affirmed its B+ counterparty credit rating on Sierra and its B+ issue credit rating on Sierra's $115 million 2.25% senior convertible notes due March 2023.

"The revised outlook reflects Sierra's improved profitability, strengthened capital adequacy, and more focused market profile, offset by its geographic concentration, narrow product scope, and contingency exposure to its recently divested workers' compensation business," explained S&P credit analyst Joseph Marinucci.

If Sierra were to achieve S&P's earnings expectations in 2004, pretax income would likely range from $140 million to $160 million. Debt leverage and interest coverage would be 30% to 40% and exceed 25x, respectively, which is considered very conservative for the rating.

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