S&P cuts MedQuest, MQ Associates

Standard & Poor's said it lowered the corporate credit ratings on MedQuest Inc. and its parent, MQ Associates Inc. to B from B+.

All the ratings remain on CreditWatch negative, where they were placed Feb. 16. At that time, the company was unable to deliver 2005 projections to its lenders due to an understatement of allowance for contractual adjustments and doubtful accounts for patient receivables.

S&P said the current action reflects the expected write-down of receivables, estimated by the company to be overstated by between $35 million and $40 million.

While this adjustment has no effect on current cash flow, S&P said it indicates that prospective cash flow will be lower than expected.

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