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Moody's lowers AAC Holdings
Moody's Investors Service said it downgraded the ratings of AAC Holdings, Inc., the parent company of American Addiction Centers, Inc.
The downgraded ratings include the corporate family rating to Caa2 from B3, probability of default rating to Caa2-PD from B3-PD and the senior secured rating to Caa2 (LGD 3) from B3 (LGD 3).
Moody's also said it downgraded the speculative grade liquidity rating to SGL-4 from SGL-3.
The outlook is negative.
The downgrades reflect AAC's very weak third-quarter results and lower guidance for the rest of 2018, Moody's said.
The significant reduction in earnings will lead to leverage exceeding 10x by the end of 2018, which is an unsustainably high level, the agency said.
The company's weak results highlight the significant volatility in the company's earnings, Moody's said.
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