S&P lowers CRC Health outlook to negative

Standard & Poor's said it revised its outlook on CRC Health Corp. to negative from stable.

At the same time, the agency said it affirmed the ratings on the company, including the B corporate credit, the BB- senior secured, and the CCC+ subordinated debt ratings.

"The outlook revision reflects recently disappointing financial results that were influenced by the current weak economic conditions," said S&P credit analyst David P. Peknay.

Specifically, an extended economic downturn may prevent the company from achieving a financial risk profile consistent with the rating, and its tightening bank covenants may hurt liquidity, the agency said.

"Moreover," he added, "a large impairment charge related to goodwill allocated to its youth division may signify a lower expected level of success of that division."

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