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S&P lowers U.S. Renal Care view to negative
Standard & Poor's said it affirmed the B corporate credit rating on U.S. Renal Care Inc. and revised the outlook to negative from stable.
These actions reflect the company's planned debt-financed acquisition of Ambulatory Services of America.
The agency also said it placed the B+ rating on the company's first-lien debt on CreditWatch with negative implications because the size of this debt class may increase relative to the estimate of the enterprise's value in the event of default.
S&P also said it affirmed the CCC+ rating on the company's second-lien debt with a recovery rating on the first-lien debt is 2, indicating 70% to 90% expected default recovery.
The recovery rating on the second-lien debt is 6, indicating 0 to 10% expected default recovery.
The ratings continue to reflect its vulnerable business risk profile, distinguished by its dependence on the treatment of a single disease, pressure from third-party payors to reduce payments, unfavorable payor profile with a heavy reliance on Medicare and still relatively small scale, the agency said.
The company's planned debt-financed acquisition of Ambulatory Services of America will roughly double the company's size and substantially increase its debt burden, S&P said.
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