Moody's lowers FHC Health view to negative

Moody's Investors Service said it affirmed FHC Health Systems, Inc.'s corporate family rating of B2 and B2-PD probability of default rating.

Moody's also said it affirmed the B2 rating on the company's senior secured bank credit facility.

The agency also said it changed the outlook to negative from stable.

The negative outlook reflects FHC's weakened financial metrics following several years of contract losses, which has led to a multi-year decline in revenue, earnings and cash flow, Moody's said.

The ratings reflect a view that operating improvement is likely as a new management team implements its strategy and as the company ramps up new contract wins, the agency said.

These include a new contract with Walmart, as well as a new contract with the state of Arkansas, Moody's said.

But, Moody's also said it believes there is considerable execution risk associated with the ramp-up of profitability of these contracts.

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