Moody's affirms Concentra

Moody's Investors Service said it affirmed the corporate family rating of Concentra Inc. following the repurchase of about $11.5 million face amount of second-lien PIK term loan at a discount in June.

Concurrently, Moody's said it upgraded the first-lien facilities to Ba3 from B1, reflecting ongoing amortization of that facility relative to the second-lien term loan, particularly if the company continues to elect to PIK interest payments.

The outlook remains negative and continues to reflect ongoing deterioration in employment, and potential for loss of access to the revolver in 2010 following step downs in the company's total leverage covenant on March 31, 2010, the agency added.

The ratings are constrained by high financial and operating leverage, the company's relatively limited scale and scope of operations and performance below Moody's expectations since the separation of the network services business in June 2007, the agency stated.

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