S&P: Rotech on negative watch

Standard & Poor's said that its ratings on home respiratory care provider Rotech Healthcare Inc. remained on CreditWatch with negative implications, including the company's BB corporate credit rating, its BB senior secured debt rating, and its B+ subordinated debt rating.

S&P said the CreditWatch listing reflects the company's vulnerability to recently signed Medicare legislation that could hurt its reimbursement for both respiratory drugs and durable medical equipment. Rotech has also delayed the filing of its 2003 10-K. The extension will allow the company to further evaluate its accounting for the amortization of deferred issue costs on its senior credit facility.

The resolution of this issue is not expected to affect the company's compliance with its financial covenants, however, and does not have significant credit implications.

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