Moody's affirms InSight Health ratings

Moody's Investors Service said it affirmed the ratings of InSight Health Services Corp. following the company's announcement of the proposed acquisition of an indirect wholly-owned subsidiary of Cardinal Health Inc., Comprehensive Medical Imaging and its subsidiaries.

Ratings affirmed include the $50 million senior secured revolver due 2007 at B1, $225 million senior secured term loan due 2008 at B1, $50 million delayed draw term loan due 2008 at B1, and $225 million 9.875% senior subordinated notes due 2011 at B3.

Moody's, however, changed the outlook to negative from stable.

The change in outlook reflects Moody's concerns regarding the number of acquisitions the company has completed in a relatively short period of time. Moody's said it is concerned about the increase in integration risks and the demand on senior management's time and attention at a period when the performance of the existing operations have come under pressure due to weakening near-term fundamental trends for the industry.

Moody's also noted that funding the three acquisitions completed or announced over the last 12-month period has led to an increase in debt and has limited the company's ability to delever.

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