S&P cuts ConnectiCare ratings

Standard & Poor's said it lowered its counterparty credit and financial strength ratings on ConnectiCare Inc. to B+ from BB and removed them from CrediWatch.

The outlook is negative.

The ratings on ConnectiCare were placed on CreditWatch with negative implications after Bank of America Corp. announced that it would launch a $115 million bank loan transaction for Carlyle Group-owned ConnectiCare Holding Co. Inc.

Proceeds from this transaction are to be used primarily to pay a dividend to its shareholders, The Carlyle Group, and Liberty Partners, and to refinance existing debt.

"The rating actions are based on ConnectiCare's significantly declined financial flexibility, declined capitalization, and uncertainties on the company's prospective capitalization strategy," said S&P credit analyst Phillip C. Tsang.

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