S&P cuts BioScrip, loan, notes

Standard & Poor's said it lowered its corporate credit rating on BioScrip Inc. to CCC+ from B-.

The outlook is negative.

The agency also downgraded the issue-level rating on BioScrip's senior secured term loan to B- from B. The recovery rating remains 2, indicating an expectation for meaningful (50% to 70%; at the lower end of the range) recovery of principal in the event of a payment default.

In addition, S&P lowered the issue-level rating on the company's senior unsecured notes to CCC- from CCC. The recovery rating remains 6, indicating expectations of negligible (0% to 10%) recovery in the event of default.

"The company's operating performance in the second quarter fell meaningfully short of our expectations for sequential improvement," S&P credit analyst David Kaplan said in a news release.

This follows weaker-than-expected results in the first quarter in the wake of significant billing and collection issues in 2014 stemming from the integration of an acquisition. This pattern is prompting the agency to again reassess its forecast for 2015 and 2016.

The company also announced initiatives to reduce costs, the sale of its PBM business and that it plans to explore more divestitures and other strategic options, including the possible sale of the company.

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