Moody’s might drop Hanger

Moody's Investors Service said it placed Hanger, Inc.'s Ba3 corporate family rating and Ba3-PD probability of default rating under review for downgrade.

The review follows Hanger's ongoing delay in filing its Sept. 30 10-Q form with the Securities and Exchange Commission.

The delay in filing with the SEC is the second time within 12 months that Hanger has been unable to complete the accounting review process within the required period. The agency said it believes this highlights continuing deficiencies in Hanger's internal controls concerning financial reporting and may lead to additional delays and expenses in reporting future financial results.

At this time, the delay is not considered a default and Hanger has 30 days to cure the deficiency upon notice from credit facility holders and 90 days upon notice from senior unsecured note holders.

Furthermore, Hanger's credit metrics are weakly positioned in the Ba3 rating category with a debt/EBITDA leverage for the period ended June 30, 2014 of 4 times, Moody’s said.

The agency said its review will focus on Hanger's ongoing deficiencies in its internal controls and its plans to address weak operating performance and strengthen credit metrics.

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