S&P upgrades FHC Health

Standard & Poor's said it raised the senior secured debt ratings on FHC Health Systems Inc.'s $175 million first-lien term loan and $10 million revolving credit facility to BB- from B+.

The agency said it affirmed the company's B counterparty credit rating.

The outlook remains stable.

The CCC+ senior secured debt rating on the company's $89 million second-lien term loan remains unchanged.

The upgrade indicates an upgrade in the recovery rating to 1, indicating 90% to 100% expected recovery, from 2, indicating 70% to 90% nominal recovery expectation.

The ratings reflect the company's established business presence, focused operational skills in managing behavioral health care, adequate cash flow and stabilized earnings profile, S&P said.

Mitigating these financial and business strengths are expectations that the company will have a very tight cushion relative to the debt-to-EBITDA covenant in its first-lien term loan as well as its weak balance-sheet characteristics and high client concentration, the agency said.

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