S&P rates Res-Care loans BB

Standard & Poor's said it affirmed its B+ corporate credit rating on Res-Care Inc. The outlook is stable.

At the same time, the agency said it assigned a BB issue-level rating to the company's $175 million term loan A and $175 million revolving credit facility. The recovery rating on the new credit facility is 1, indicating an expectation for very high recovery of principal in the event of default.

The B- issue-level rating on the senior unsecured notes and its 6 recovery rating remain unchanged.

S&P said the ratings on Res-Care reflect its "weak" business risk profile due to the company's high exposure to state budget cuts, slim profit margins, and ongoing competitive pressures tied to its operation in a highly fragmented market. Res-Care's "aggressive" financial risk profile is highly influenced by its sponsor ownership, the agency said.

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