Moody's cuts Extendicare view to negative

Moody's Investors Service said it changed the outlook of Extendicare Health Services, Inc. to negative from stable and affirmed the current ratings following the announcement of a reorganization of its parent company, Extendicare, Inc., a Canadian publicly traded company.

Moody's said the change in the outlook reflects Moody's assumption that the reorganization will result in an increase in financial leverage at Extendicare Health Services.

Moody's said the increase in financial leverage, along with the elimination of the benefits and contributions of the ALC operations, may result in a surviving company with metrics and qualitative factors that no longer support the current Ba3 corporate family rating.

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