S&P cuts 21st Century Oncology, debt

S&P said it lowered its corporate credit rating on 21st Century Oncology Holdings Inc. to CCC from B- and placed the rating on CreditWatch with negative implications.

At the same time, the agency downgraded its rating on subsidiary 21st Century Oncology Inc.'s senior secured debt to CCC from B- and placed the rating on CreditWatch with negative implications. The recovery rating on this debt remains 3, reflecting an expectation for meaningful (50%-70%, at the upper end of the range) recovery in the event of payment default.

In addition, S&P lowered its rating on the subsidiary's senior unsecured debt to CC from CCC and placed the rating on CreditWatch with negative implications. The recovery rating remains 6, indicating an expectation for negligible (0%-10%) recovery in the event of default.

"The downgrade reflects a significant escalation in the risk of a near-term default if the company is unable to file its form 10-K for the fiscal year-ended Dec. 31, 2015, in the next 30 days following the receipt of a notice of default from its lenders," S&P credit analyst Matthew O'Neill said in a news release.

The negative CreditWatch reflects the potential for a multiple notch downgrade if the company is unable to file its 10-K within the cure period, which S&P believes will significantly escalate the risk of a bankruptcy filing the agency said.

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