Moody's rates Centene note Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating to Centene Corp. and a Ba3 rating to its proposed $175 million senior unsecured notes.

The outlook is stable.

The proceeds from the notes will be used to repay existing bank debt and for general corporate purposes.

The agency said the company's ratings are driven by its concentration in the Medicaid market, acquisitive nature and relatively high financial leverage, offset by its multi-state presence, relatively stable financial profile and adequate capital level.

With the issuance of the new debt, the adjusted debt-to-EBIT ratio will be roughly 3.9x, which is expected to decrease to around 3x by the end of 2007, Moody's said, adding that while the company has been very acquisitive over the last several years, some of these have been small acquisitions in support of specialty product operations, which add diversification to Centene's overall business.

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