S&P cuts Healthy Directions

Standard & Poor's said it lowered Healthy Directions LLC's corporate credit rating to B- from B+ and revised the outlook to negative from stable.

Also downgraded to B- from B+ were the $10 million revolving credit facility bank loan due 2009 and $100 million first-lien term loan bank due 2010.

S&P said that it remains concerned that Healthy Directions, formerly Phillips Health LLC, may face difficulty complying with the amended financial covenants under its senior secured credit facility because of poor operating trends.

The ratings reflect the company's small size and narrow product focus, the intensely competitive industry, high revenue concentration, very limited cushion under its amended financial covenants and high debt leverage, S&P said.

Despite cutting debt required by a free cash flow sweep under the terms of the credit facilities, the issuer's total debt-to-EBITDA ratio remains high at about mid-3 times because of significant EBITDA deterioration, the agency said.

Fitch puts GMAC on watch

Fitch Ratings said it placed on Rating Watch negative GMAC LLC and its related subsidiaries' BB+ long-term issuer default ratings.

According to Fitch, the action reflects the ongoing pressures in the company's residential mortgage subsidiary, Residential Capital LLC (BB+ issuer default rating).

The agency said that GMAC has good liquidity and that its automotive and insurance businesses have continued to perform well but that its gains have been offset by losses in the residential mortgage business. Fitch said it believes that the residential mortgage business will remain stressed over the near term.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.