S&P: Magellan Health outlook positive

Standard & Poor's said it revised its outlook on Magellan Health Services Inc. to positive from stable and affirmed its BB counterparty credit rating.

The agency said the revised outlook reflects Magellan's strengthening balance sheet fundamentals and improving business profile diversity. Over the past few years, Magellan has materially reduced debt outstanding, strengthened its liquidity position and significantly enhanced its tangible net equity position.

The rating affirmation reflects the company's established competitive position, improving cash flow diversity and good liquidity and financial flexibility, S&P said.

The rating is constrained by qualitative business profile considerations related to changing competitive and product dynamics and uncertainties about Magellan's prospects for sustained growth into new and compatible markets through acquisition, the agency said, adding that the company remains exposed to client concentration risk.

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