Moody's boosts ResCare, rates loan Ba2, notes B1

Moody's Investors Service said it upgraded ResCare, Inc.'s corporate family rating one notch to Ba3 from B1 and assigned a Ba2 rating to the proposed $175 million senior secured credit facility due 2010 and a B1 rating to the proposed $150 million senior unsecured notes due 2013.

The outlook is stable.

Moody's said the upgrade reflects ResCare's demonstrated ability to expand operating margins and revenues and increase cash flow over the past few years despite the absence of any rate increases from 2002 through the middle of 2005.

The agency added the improvement in ResCare's margins and credit metrics was driven by better control of overhead and labor expense and improved revenue mix.

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