S&P cuts Skilled Healthcare

Standard & Poor's said it lowered all of the ratings on Skilled Healthcare Group Inc., including its corporate credit rating to CCC from B+ and senior secured rating to CCC+ from BB- with the recovery rating maintained at 2, indicating an expectation of 70% to 90% recovery in a default. The agency also said it lowered the rating on its subordinated debt to CC from B- with the recovery rating maintained at 6, indicating an expectation of 0% to 10% recovery in a default.

The ratings also were placed on CreditWatch with developing implications following a jury verdict against Skilled Healthcare related to a complaint filed more than four years ago, S&P said.

The jury awarded the plaintiffs $613 million in statutory damages and $58 million in restitution, the agency said. If the jury verdict is upheld in the final judgment, Skilled Healthcare would be required to post a bond to satisfy a bonding requirement to defer enforcement of the judgment during a likely appeal process, the agency said.

The bonding requirement is typically to post a bond for 150% of the final judgment amount, but the agency said it does not believe the company would have the means to post such a bond as it currently has only $94 million of borrowing capacity under its $100 million revolving credit facility.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.