Moody's rates Apria notes Ba2/B1

Moody's Investors Service said it assigned a Ba2 rating (LGD2, 29%) to the proposed $600 million senior secured series A-1 notes due 2014 and a B1 rating (LGD5, 80%) to the proposed $410 million senior secured series A-2 notes due 2014 of Apria Healthcare Group Inc.

The Ba3 corporate family and probability-of-default ratings were affirmed.

The outlook is stable.

Apria's Ba3 corporate family rating is constrained by relatively high leverage in light of the ongoing unfavorable Medicare reimbursement environment, the agency said.

Ratings benefit from the reprieve offered by the Medicare Improvements for Patients and Providers Act of 2008, the agency noted.

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