S&P rates InSight B-, notes CCC+

Standard & Poor's said it assigned its B- corporate credit rating to InSight Health Services Corp. and a CCC+ with a recovery rating of 5 to its $315 million senior secured floating-rate notes due 2011.

The outlook is negative.

InSight Health's low speculative-grade ratings reflect the highly fragmented and competitive medical imaging industry, overcapacity and unfavorable reimbursement trends, the agency said.

The issuer's leverage remains high with a debt-to-EBITDA adjusted for operating leases of more than 8 times for the 12 months ended March 31.

The company's EBITDA has declined over the past 11 fiscal quarters, reflecting declining volumes, increasing expenses and more recently reduced reimbursement, the agency said.

While it has ample liquidity in the short term, its prospects over the medium term are less certain given the declining trend in revenue and EBITDA, S&P said.

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