S&P cuts ASP Napa

S&P said it downgraded the ratings for ASP Napa Holdings LLC and its senior secured revolver and first-lien term loan to B- from B. The recovery rating remains 3, indicating expectations for meaningful (50%-70%, rounded estimate: 60%) recovery in a default.

ASP NAPA has underperformed S&P’s expectations for EBITDA margin and cash flow generation for full-year 2019, in part due to a difficult reimbursement environment, wage pressure and investment in new sites.

“We have lowered our forecast for 2020 and now expect EBITDA margin of about 12% compared with our previous estimate of near 13%, and minimal free cash flow compared with our previous free cash flow forecast of about $10 million in 2020,” said S&P in a press release.

The outlook is negative.

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