S&P: Medical Card on watch

Standard & Poor's said the BB- long-term counterparty credit ratings on Medical Card System Inc. remain on CreditWatch with negative implications, along with its B- long-term counterparty credit rating.

The CreditWatch placement followed the company's unexpected third-quarter 2011 operating losses and recent news that it was replacing several key executives.

The agency said it believes that both of these events increase the probability of a covenant breach in the near term.

The third-quarter losses were mainly the result of increased claims activity in the company's Medicare Advantage business, S&P said.

The company will likely only be able to partially exclude the costs associated with the management realignment from the covenant compliance calculation because of exclusion limits in the calculation, the agency said.

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