S&P upgrades Advanced Homecare

Standard & Poor's said it raised Advanced Homecare Holdings Inc.'s corporate credit rating to B+ from B, its first-lien senior secured loan and revolving credit facility to BB from BB- and its second-lien senior secured loan to B- from CCC+.

The outlook was revised to stable from positive.

The agency said the upgrade is due to the company's ability to deleverage through continued EBITDA growth. Advanced Homecare, which does business as Encompass Home Health Inc., continues to benefit from favorable demographic trends and industry characteristics that have allowed it to improve its financial risk profile through revenue growth and improving operating margins, S&P said.

The speculative-grade rating on Advanced Homecare reflects its operating concentration in the highly competitive home health-care industry, its vulnerability to a decline in government reimbursement and significant financial risk profile, the agency said.

The stable outlook is based S&P's view Advanced Homecare's ongoing growth strategy should enable it to overcome future Medicare rate cuts.

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