S&P affirms MedCath

Standard & Poor's said it affirmed its B+ corporate credit rating on MedCath Holdings Corp.

The outlook is positive.

At the same time, the agency said it revised the bank loan and recovery ratings on MedCath, adding that it raised the rating on the senior secured revolving credit facility to BB while the recovery rating has been revised to 1.

This rating action reflects the reduction in the amount of senior secured debt as its $100 million term loan B is fully repaid and other priority debt substantially reduced, the agency said, adding that the low-speculative-grade rating on MedCath reflects the reimbursement risk associated with a narrow focus in a highly competitive business, the geographic concentration of a small portfolio of 11 hospitals and regulatory issues that could change the company's prospects.

These concerns are only partially mitigated by MedCath's relatively well-established presence in its markets, S&P said.

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