S&P cuts CT Technologies

S&P said it lowered its corporate credit rating on CT Technologies Intermediate Holdings Inc. (operating as CIOX Health) to B- from B. The outlook is stable.

At the same time, S&P said it lowered its rating on the company's first-lien debt to B- from B. The 3 recovery rating, which reflects an expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of default, is unchanged.

The first-lien debt consists of a $35 million revolving credit facility due 2019 and a $580 million (outstanding) first-lien term loan due 2021.

S&P also lowered its rating on the company's second-lien debt to CCC from CCC+. The 6 recovery rating on this debt, which reflects an expectation for negligible recovery (0%-10%; rounded estimate: 0%), is unchanged.

“The downgrade reflects CIOX's weaker-than-expected operating performance for fiscal-year 2017, and our expectations that competition and ongoing investment needs will hurt profitability and keep leverage elevated over the next 12 months,” S&P said in a news release.

“Although we believe the company is well positioned to capitalize on industry trends such as increased health care spending, we believe operational risk will remain elevated over the next few years as the company corrects historical business under-investments and executes on its pricing regulation initiatives.”

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