Moody's downgrades Rotech

Moody's Investors Service said it downgraded Rotech Healthcare, Inc.'s corporate family rating to Ca from Caa3 and probability of default rating to Ca-PD from Caa3-PD.

Concurrently, the ratings on the $230 million senior secured first-lien notes were lowered to Caa1 from B3 and the $290 million senior secured second-lien notes were lowered to C from Ca.

The company's speculative grade liquidity rating remains at SGL-4.

The outlook is negative.

Moody's said the action was prompted by the company's recent announcement of a debt reduction and restructuring plan (8-K filed March 15) that provides for significant debt elimination through a pre-arranged Chapter 11 bankruptcy filing.

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