S&P affirms Prospect Medical

Standard & Poor's said it affirmed and removed the B- long-term counterparty credit rating on Prospect Medical Holdings Inc. from CreditWatch with negative implications, where it was placed Jan. 17.

The outlook is stable.

The company has B+ ratings and 1 recovery rating on its $10 million five-year first-lien revolver due August 2012 and $95 million seven-year first-lien term loan due August 2014, and CCC rating and 6 recovery rating on its $50 million 71/2-year second-lien senior secured debt term loan due February 2015.

S&P said the affirmation reflects Prospect's improved liquidity and financial flexibility and the emergence of a more stable debt service capacity.

Offsetting factors include Prospect's marginal balance-sheet quality and relatively concentrated earnings profile, the agency said.

The issuer has a debt-to-EBITDA ratio of 4 times to 5 times.

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