S&P cuts HCR HealthCare, loan

Standard & Poor's said it lowered its corporate credit rating on HCR HealthCare LLC to B- from B.

The outlook is negative.

In conjunction with the downgrade, the agency lowered its issue-level rating on the company's term loan to B from B+. The 2 recovery rating remains unchanged and reflects an expectation for substantial recovery (70%-90%; in the upper end of the range) in the event of a payment default.

S&P said the downgrade reflects its assessment that the company is unlikely to be able to generate free cash flow on a sustained basis, absent a renegotiation of lease payments.

The agency said the corporate credit rating continues to reflect its assessment of HCR’s business risk profile as "weak" and financial risk profile as "highly leveraged," as well as its view that the financial risk is comparatively weak within the highly leveraged assessment.

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