Moody’s revises Kindred to negative

Moody's Investors Service said it changed the outlook of Kindred Healthcare, Inc. to negative from stable and affirmed existing ratings, including the B1 corporate family rating and B1-PD probability of default rating.

Moody’s said the negative outlook reflects its expectation that Kindred will face a number of headwinds in growing EBITDA that will constrain the company's ability to reduce its high financial leverage. The implementation of new patient criteria rules in Kindred's long term acute care hospitals will initially have a negative impact on volumes and constrain revenue and EBITDA growth in the company's largest segment.

The company also faces evolving reimbursement models in other segments of its business, including home health and hospice services, and more restrictive covenant requirements in the second quarter of 2016, the agency said.

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