S&P lifts HCR HealthCare view to stable

Standard & Poor’s said it affirmed the B- corporate credit rating on HCR HealthCare LLC and revised the outlook to stable from negative.

The B rating and the recovery rating of 2 on the company’s term loan is unchanged. The recovery rating of 2 reflects 70% to 90% expected default recovery.

S&P said it does not view an amendment of a lease obligation as an event of default in the ratings, even in the context of financial distress.

The outlook revision reflects a view that the company will be able to generate modest free cash flow over the next two years, the agency said.

Although this amendment materially improves the cash flow in the near term, S&P said it continues to view cash flows as thin and facing headwinds by the annual rent escalators.

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