Moody's cuts LifeCare

Moody's Investors Service said it lowered the speculative grade liquidity rating of LifeCare Holdings, Inc. to SGL-4 from SGL-3 and affirmed its corporate family and probability of default ratings at Caa1, first-lien facilities at B2 and subordinated notes at Caa3.

The outlook remains negative.

The downgrade was prompted by the projected narrowing of the headroom under financial covenants and increased refinancing risk over the next 12 months, Moody's said.

The ratings continue to consider the company's high debt leverage and weak interest coverage, the agency said.

The negative outlook reflects increased refinancing risk and concerns about the company's ability to support its current capital structure over the longer-term, Moody's said.

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