S&P cuts SFBC outlook to negative

Standard & Poor's said it revised SFBC International Inc.'s outlook to negative from stable and affirmed the company's B+ corporate credit rating, B+ $90 million secured revolving credit facility with a recovery rating of 3 and B- 2.25% convertible senior notes.

S&P said the outlook revision reflects the unresolved issues facing SFBC, including an informal Securities and Exchange Commission investigation, a downturn in business at its Miami facility related to bad press and structural issues, a continuing investigation by the Senate Finance Committee, a tuberculosis outbreak at a Canadian facility and litigation.

After obtaining a covenant waiver at year-end, the company has continued negotiations with lenders and should soon have new covenants in place that reflect the revised operational forecast. The agency said that while it believes the company has addressed, or is in the process of addressing, each of these issues, the inability to cope with any or all of them could result in a negative rating action.

Total debt to EBITDA was about 3.6x on a lease-adjusted basis at Dec. 31.

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