S&P pares Global Medical

S&P said it lowered its ratings on Global Medical Response Inc. and its first-lien secured debt to CCC+ from B-. The debt’s 3 recovery rating is unchanged.

“The downgrade reflects our view that GMR's capital structure is unsustainable over the medium to long term. We believe GMR highly depends on a multitude of favorable conditions–including moderating labor and fuel costs, weather, and improving capital markets–to meet its financial commitments over the next 12-24 months.

“While we expect GMR to benefit from cost-cutting and rate improvement in the second half of 2023, we believe the company's ability to generate sufficient operating cash flow to cover its fixed costs is highly uncertain,” S&P said in a press release.

Additionally, S&P warned the company’s “debt is trading very low” raising the potential for a distressed debt exchange. “The term loans and notes have steadily traded down over the past year, with a particularly steep decline in late March. The loans are trading in the low-60s while the notes are yielding close to 30%. We view both values as heavily distressed.”

The outlook is negative.

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