S&P downgrades Apria Healthcare

Standard & Poor's said it lowered its ratings on Apria Healthcare Group Inc., including the corporate credit rating to BB+ from BBB-, the secured bank loan rating to BB+ from BBB- and the senior unsecured debt rating to BB- from BB+.

The outlook is stable.

The downgrade reflects Apria's weaker financial risk profile and more aggressive financial policy resulting from the company's approval of a $250 million share repurchase program, the agency said.

Apria has already completed the repurchase of $175 million of its common stock, which was funded with the company's revolving credit facility. The remaining $75 million of approved repurchases may be made periodically, depending on the company's share price.

S&P said the ratings reflect the exposure of Apria's narrowly focused business to variable third-party reimbursement policies, its weaker performance in the third quarter of 2005 and its recently more aggressive financial risk and liquidity profiles.

These concerns are partially mitigated by the company's leading position in providing specialized home health care services and equipment and its history of generating significant cash flows, the agency said.

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