Moody's may cut ResCare

Moody's Investors Service said it placed under review for possible downgrade ResCare, Inc.'s Ba3 corporate family and probability of default ratings, the Ba1 (LGD2, 19%) rating on its $275 million revolving credit facility due 2013 and the B1 (LGD5, 75%) rating on its $150 million senior notes due 2013.

The review was prompted by news that the company has received a proposal from Onex Corp. to acquire all of the outstanding shares of common stock of ResCare not owned by affiliates of Onex. The review will monitor the events related to the buyout announcement, Moody's said.

Should ResCare be taken private, the review will consider the future capital structure of the company, potential issues that could arise with being a private company and the ongoing litigious nature of the industry, the agency said.

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