S&P lowers Option Care view to negative

S&P said it affirmed the B- issuer credit rating on HC Group Holdings II, which does business as Option Care.

The agency said it revised the outlook to negative from stable.

S&P also said it placed the B- rating on the company's revolving credit facility and first-lien term on CreditWatch with developing implications, along with the CCC rating on the second-lien debt.

The company entered into a definitive merger agreement with very highly leveraged home infusion service provider Bioscrip Inc. in an all-stock transaction.

S&P also said it elevated execution risk in the near term, given the challenges of integrating two large companies, especially because Bioscrip has been struggling financially.

There could also be substantial benefits including incremental synergies, a materially stronger market position and better geographic and payor diversification, the agency said.

The negative outlook reflects the increase in debt leverage to 7.5x to 8x and the considerable integration risk of the acquisition, which escalates the risk of a potential downgrade over the next year, S&P said.

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