S&P changes Prospect Medical view

S&P said it revised its outlook on Prospect Medical Holdings Inc. to negative from stable and affirmed the B issuer credit rating.

The B senior secured issue-level ratings and 3 recovery rating are unchanged.

“Prospect Medical Holdings Inc.'s operating performance and cash flow has been below our expectations, resulting in cash flow deficits that required the sponsor to contribute equity to meet covenant requirements,” the agency said in a news release.

“Based on slower-than-expected margin improvement, we now expect leverage above 5x for the next year or two, compared to our prior expectation that leverage would remain below 5x over time.”

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