New York, June 17, 2014 -- Moody's Investors Service commented that Kindred Healthcare Inc.'s announcement that the company would issue equity in order to fund a portion of its contemplated acquisition of the equity of Gentiva Health Services, Inc. (B3 negative) is a positive development as it will limit the potential for deterioration of its credit metrics. However Moody's stated that it still views the acquitision -- if ultimately consummated -- as a credit negative. Risks remain around the size of the acquisition, the integration of Gentiva's operations, the resulting increase in exposure to Medicare reimbursement and the ultimate price needed to complete the transaction. Kindred's announced equity offering coincided with a notice that the company would tender for all of the outstanding shares of Gentiva for $14.50 a share -- a $0.50 per share increase over the previously announced offer in May 2014. Therefore, Kindred's ratings, including the B1 Corporate Family Rating and B1-PD Probability of Default Rating, remain unchanged. The negative rating outlook also remains unchanged.
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