S&P downgrades Drumm

Standard & Poor's said it lowered the corporate credit rating on Drumm Corp. to B from B+, along with the senior secured rating on its term loan and revolving credit facility to B from B+.

The recovery rating on this debt remains 3, indicating 50% to 70% expected recovery in a default.

The outlook is stable.

The ratings are based on an assessment of the company's business risk profile as weak, reflecting significant ongoing reimbursement risk to nursing homes and adverse changes to the reimbursement rules for group therapy services, S&P said.

The agency said it expects Medicaid rates to be flat for all the states where Drumm operates.

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