S&P cuts Hanger Orthopedic

Standard & Poor's said it lowered its corporate credit and senior secured debt ratings on Hanger Orthopedic Group Inc. to B from B+ and lowered its senior unsecured and subordinated debt ratings on the company to CCC+ from B-.

The outlook is negative.

S&P said the downgrade reflects S&P's concern with declining trends in Hanger's core business line and the uncertain acceptance of the managed care program it has created for orthotics and prosthetics. These uncertainties cloud prospects for a meaningful recovery in the company's earnings and cash flow when Hanger has recently violated a covenant on its senior secured credit facility because of operating difficulties.

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