New York, July 24, 2012 -- Moody's Investors Service ("Moody's") assigned a B3 rating to Universal Hospital Services, Inc.'s ("UHS") proposed $425 million senior secured second lien notes. At the same time, Moody's affirmed the Corporate Family and Probability of Default Ratings at B2. The rating outlook is stable.

The proceeds from the new second lien notes will be used to tender for the company's existing $405 million senior secured second lien fixed rate PIK toggle notes due June 2015, and pay transaction fees and expenses. The ratings incorporate our assumption that the company will successfully amend and extend its existing revolving credit facility (not rated by Moody's), which will be upsized to $235 million.

Moody's assigned the following ratings:

$425 million senior secured second lien fixed rate notes due 2020, B3 (LGD4, 60%)

Moody's affirmed the following ratings (with LGD point-estimate revisions):

$230 million second lien floating rate notes due June 2015 at B3 (LGD4, 60%) from (LGD4, 57%)

Moody's expects to withdraw the following ratings upon close of the transaction:

$405 million senior secured second lien 8.5% PIK toggle notes due June 2015, B3 (LGD4, 57%)

Ratings Affirmed:

Corporate Family Rating at B2

Probability of Default Rating at B2

Speculative Grade Liquidity Rating at SGL-2

All ratings are subject to review of final documentation.

RATINGS RATIONALE

The B2 Corporate Family Rating reflects UHS' small size on both an absolute basis and relative to larger competitors, as well as the company's considerable financial leverage and weak interest coverage. On a pro forma basis for the refinancing of the company's senior secured fixed rate notes, we estimate adjusted leverage of approximately 5.5 times. UHS' business is extremely capital intensive and requires significant amounts of capital expenditures in order to achieve revenue and EBITDA growth. Also constraining the rating is the company's negative free cash flow resulting from high growth capital expenditures.

Nevertheless, the ratings are supported by UHS' leading market position in the medical outsourcing service business, its national footprint, and diverse customer base. The company's credit profile also benefits from its ability to achieve revenue and earnings growth even through difficult economic conditions. The rating has also benefited from UHS' good liquidity position, including significant availability under the company's asset-based revolver and the ability to reduce capital expenditures (at the expense of growth). Given the company's weak credit metrics, there is very little cushion within the current rating for additional leverage or weaker interest coverage.

The stable outlook is supported by UHS' good liquidity profile and stable revenue sources. Moody's expects free cash flow to remain at weak levels given the magnitude of anticipated growth capital expenditures needed to support incremental revenues.

Moody's could lower the ratings if weakness in hospital census or reduced demand from hospitals results in a sustained reduction in core rental revenue and EBITDA. The ratings could be downgraded if the company sustains adjusted debt to EBITDA above 6.0 times. Further, if the company's access to external liquidity sources were to deteriorate, or if UHS were to engage in a significant debt-financed acquisition or shareholder distribution, ratings could be downgraded.

While not expected over the near-term due to the company's small absolute size, high leverage and weak interest coverage, Moody's could upgrade the ratings if the company sustains leverage below 5.0 times and free cash flow to adjusted debt above 5%. Interest coverage would also need to materially improve in order for Moody's to consider an upgrade.

For additional information please refer to Moody's Credit Opinion on Universal Hospital Services, Inc. available on www.moodys.com.

The principal methodology used in rating Universal Hospital Services, Inc. was the Global Business & Consumer Service Industry Methodology published in Octoner 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Universal Hospital Services, Inc. ("UHS") is a leading nationwide provider of medical outsourcing and lifecycle services to the United States health care industry. The company primarily rents patient-ready medical equipment to hospitals and alternate site providers, and also offers a range of preventative maintenance, inspection, repair, logistic and consulting services. UHS is owned by private equity sponsors Irving Place Capital Merchant III, L.P., and reported revenues of approximately $395 million for the twelve months ended March 31, 2011.

REGULATORY DISCLOSURES

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Daniel Goncalves Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Peter H. Abdill, CFA MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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