S&P lowers Medical Depot

S&P said it lowered the corporate credit rating on Medical Depot Holdings Inc. to B- from B.

The outlook is negative.

The agency also said it lowered the rating on the first-lien debt to B- from B and the rating on the second-lien debt to CCC from CCC+.

The recovery ratings of 3 and 6 on this debt, respectively, are unchanged.

The 3 recovery rating indicates 50%to 70% expected default recovery.

The 6 recovery rating indicates 0 to 10% expected default recovery.

Medical Depot experienced an unfavorable shift in customer and channel mix, as well as greater pricing pressure in certain product categories, S&P said.

The agency said it lowered the 2017 EBITDA estimate by about $20 million to $70 million, which increases 2017 adjusted debt leverage to about 10x.

S&P also said it expects modest free cash flow deficits for 2017, and only modest improvement in 2018.

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