S&P trims Carestream Health

Standard & Poor's said it lowered its corporate credit rating on Carestream Health Inc. to B from B+ and removed the rating from CreditWatch.

The outlook is stable.

At the same time, S&P affirmed the B+ issue-level rating on Carestream's $2 billion first-lien debt, which comprises a $150 million revolver and a $1.85 billion first-lien term loan. The recovery rating on this debt is 2, indicating an expectation of substantial (70%-90%) recovery in a payment default scenario.

S&P also affirmed its B- issue rating on the company's $500 million second-lien term loan. The recovery rating on this debt is 5, indicating an expectation of modest (10%-30%) recovery in a payment default scenario.

"We expect the company to achieve low-single-digit revenue growth in the next 12 months because modest growth in the company's nonfilm business should continue to offset the gradual decline of film products revenues," said S&P credit analyst Svetlana Olsha in a news release.

"We believe that the company will be able to sustain high-teen EBITDA margins, which should support continuing good free cash flow generation in excess of $150 million annually."

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