S&P hikes Carestream Health

S&P said it raised Carestream Health Inc.’s issuer rating to B- from D and rated its new first-lien debt B- with a 3 recovery rating (rounded estimate: 60%). The outlook is negative.

Carestream emerged from Chapter 11, shaved its debt by about $500 million, improved its debt maturity profile and reduced its mandatory debt amortization.

“Under the new capital structure, we project S&P Global Ratings-adjusted leverage of mid-4x by the end of 2022, a material reduction compared to over 8x as of the second quarter of 2022 when the company filed for Chapter 11. We believe the new capital structure will provide sufficient room for Carestream to strategically reposition itself for future growth. However, ongoing macroeconomic pressures and high-interest rates will make it more challenging,” the agency said in a press release.

The weak outlook reflects the view that even with lower leverage and the difficult operating macroeconomic environment Carestream will endure persistent pressure on its growth and profitability, S&P noted.

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