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Moody's drops Valitas loans to B2
Moody's Investors Service said it downgraded Valitas Health Services, Inc.'s corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and its senior secured bank credit facility ratings to B2 from B1.
The outlook was changed to negative from stable.
Moody's said the action reflects the company's continued operating performance weakness and the further deterioration of the company's EBITDA and credit metrics beyond Moody's previous expectations, attributable to recent contract losses, margin declines from competitive pricing pressure on renewed contracts and delays in the realization of earnings from certain start-up contracts.
The downgrade also reflects Moody's concerns related to the minimal cushion under the company's financial covenants, due to earnings volatility and approaching step-downs, and the agency's expectation that a waiver or an amendment will be required over the near-term.
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