Moody's downgrades Millennium Health

Moody's Investors Service said it downgraded Millennium Health, LLC's corporate family rating to Caa2 from B2, probability of default rating to Caa2-PD from B2-PD and senior secured credit facilities to Caa2 (LGD4) from B2 (LGD4). The ratings remain under review for further downgrade.

The downgrade reflects Moody's view that a confluence of events is having a material, negative impact on Millennium's credit profile.

"We have growing concerns related to the sustainability of the company's capital structure, given its significant debt load, the possibility of a large settlement and the risk that earnings will continue to fall because of lower government reimbursements," Chedly Louis, vice president and senior analyst at Moody's, said in an agency news release. "As a result, there is increasing probability that Millennium will pursue a transaction with its lenders that Moody's considers a distressed exchange, and hence a default.”

Millennium's Caa2 corporate family rating also reflects the company's high financial leverage, its relatively small scale and its revenue concentration in core toxicology testing services.

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