Moody's: MMM Holdings still on review

Moody's Investors Service said it is maintaining its review for downgrade on the Caa1 senior debt ratings of MMM Holdings, Inc., NAMM Holdings, Inc. and Preferred Health Management Corp.

The agency said the continuation of the review is a result of a possible breach of the debt-to-EBITDA ratio financial covenant in its bank loan agreement that tightens to a 2 times limit in 2008. Ratings have been under review for downgrade since March 20.

According to Moody's, 2007 preliminary financial results indicate the company has made significant progress in addressing the unexpectedly high medical utilization and costs in its Puerto Rico operations.

These issues had resulted in a significant earnings decline at the end of 2006 and early 2007 and a breach of several financial covenants in its bank loan agreement, the agency noted.

Despite this progress, the company has not yet been successful in renegotiating the financial covenants with its lenders, Moody's added.

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