Moody's lowers Acadia view to negative

Moody's Investors Service said it affirmed the ratings of Acadia Healthcare Co., Inc., including the B1 corporate family rating and the B1-PD probability of default rating.

Moody's also said it affirmed the Ba2 senior secured rating, B3 unsecured rating and the SGL-2 speculative grade liquidity rating.

Moody's also said it changed the outlook to negative from stable.

The outlook revision reflects the challenges the company is facing with its profit margins in its U.K. business, the agency said.

The negative outlook also reflects the high likelihood that adjusted debt-to-EBITDA ratio will remain higher than 5.5x over the next 12- to 18-months unless the company is able to improve margins, Moody's said.

The negative outlook also considers the reduced cushion under the company's bank credit facility covenants if the company fails to achieve at least mid-single digits earnings growth, the agency said.

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