S&P puts Acadia Healthcare on watch

S&P said it placed its ratings for Acadia Healthcare Co. Inc., including the B issuer rating, senior secured and senior unsecured ratings, on CreditWatch with negative implications.

The placement reflects the increased risk of a covenant breach and the potential need to refinance its 6 1/8% senior notes due March 2021 should the U.K. sale not be completed soon, amid a tight credit market. Acadia recently announced it temporarily suspended the sale of its U.K. business until market conditions improve.

The company has a covenant stepdown in March and a second one in December. Given current elevated leverage and limited covenant cushion, S&P believes the risk of a covenant breach is heightened.

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