SIE Sierra Health Svcs

Sierra Health Services Inc. (NYSE:SIE) announced today that Fitch Ratings has upgraded the company's senior debt ratings to BBB- from BB+ and issuer default rating to BBB 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, 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, prescription 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.