S&P: Acadia on negative watch

Standard & Poor's said it affirmed the corporate credit rating on Acadia Healthcare Co. Inc., along with the B- rating on its unsecured notes.

The notes were placed on CreditWatch with negative implications.

The 5 recovery rating on this debt indicates 10% to 30% expected recovery in a default.

The outlook remains positive.

The company currently has about $149 million of outstanding term debt, a $75 million revolver and $23 million of industrial revenue bonds, which are not rated.

The ratings reflect the company's weak business risk and aggressive financial risk profiles, S&P said.

The weak business risk profile incorporates the operating and integration challenges Acadia faces due to its rapidly expanding business and its exposure to uncertain third-party reimbursement, the agency said.

The aggressive financial risk profile reflects an expectation that acquisition-related debt will likely keep leverage between 4x and 5x over the next year, S&P said.

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