S&P lifts Aurora secured debt, view to negative

Standard & Poor's said it raised the rating on Aurora Diagnostics LLC's senior secured debt to BB- from B+ because the size of this debt class declined relative to an estimate of Aurora's value in the event of default.

The agency also said it revised the recovery rating on this debt to 1, indicating 90% to 100% expected recovery in a default, from 2, which indicates 70% to 90% expected recovery.

The agency also said it affirmed the company's B corporate credit rating, although it has lowered the near-term expectations for profit margins and cash flow generation.

S&P also revised the outlook to negative from stable, reflecting the increased likelihood that Aurora's cost-reduction initiatives will not offset intensifying market pressures.

The ratings reflect the company's vulnerable business risk profile, which is characterized by a narrow operating focus, vulnerability to customer in-sourcing, price pressure and weakened profitability, the agency said.

The agency said it believes Aurora has curbed its appetite for acquisitions and is now focusing on organic growth, efficiency improvements and cost cutting, S&P said.

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