Moody's affirms Chemed

Moody's Investors Service said it affirmed Chemed Corp.'s Ba2 corporate family and probability-of-default ratings, Ba3 (LGD4) $150 million senior unsecured notes due 2011, Baa2 (LGD2, 11%) $175 million senior secured revolver due 2010 and SGL-1 speculative grade liquidity rating. The loss-given-default rate on the notes was changed to 68% from 67%.

The outlook is stable.

The agency said the Ba2 corporate family rating considers the company's moderate leverage position, stable free cash flow and leading market positions in both the Roto-Rooter and Vitas Healthcare Services segments. For the 12 months ended Dec. 31, Chemed had an adjusted debt-to-EBITDA ratio of 1.8x, compared with 2.5x at Dec. 31, 2005.

The rating also acknowledges Chemed's highly acquisitive nature, business concentration within the hospice segment and reliance on Medicare reimbursement for substantially all of Vitas' revenues, Moody's said.

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