Moody's cuts Acadia Healthcare

Moody's Investors Service said it downgraded the ratings of Acadia Healthcare Co., Inc., including the corporate family rating to B2 from B1 and the probability of default rating to B2-PD from B1-PD. Moody's also downgraded the senior secured ratings to Ba3 from Ba2 and the unsecured ratings to Caa1 from B3. Moody's downgraded the speculative grade liquidity rating to SGL-3 from SGL-2 and changed the outlook to stable from negative.

“The downgrade of the CFR reflects the company's persistently high financial leverage, and Moody's expectation that debt/EBITDA will remain above 5.5 times over the next 12-18 months. Moody's estimates Acadia's adjusted debt/EBITDA approximated six times for the 12 ended December 31, 2019,” said Moody’s in a press release.

“The stable outlook reflects the non-elective nature of Acadia's services, good scale and diversity by geography and behavioral service line. These factors will help to partially mitigate the company's high financial leverage, which is unlikely to decline in the near-term due to the impact of the coronavirus on patient volumes and costs,” said the agency.

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