S&P affirms Radiation Therapy; outlook negative

Standard & Poor's said it affirmed its B corporate credit rating on Radiation Therapy Services Inc., but revised the outlook to negative from stable.

These actions reflect financial performance below its expectations for the first half of 2011, largely because of higher than expected costs related to marketing and sales, which continue to affect EBITDA, the agency noted.

Although Radiation Therapy is currently in compliance with financial covenants, its cushion is small and it will continue to be pressured as covenants step down in the third quarter, S&P said.

"The ratings on Radiation Therapy reflect the competitive and fragmented oncology market, reimbursement risk and geographic concentration, which contribute to its weak business risk profile," said S&P credit analyst Rivka Gertzulin.

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