Outlook brightens: Nursing home companies get improved credit ratings
The firm ranked Kindred Healthcare at B+ , and Skilled Healthcare and Sun Healthcare Group at B. The ratings giant also affirmed its junk-level ratings on Drumm Investors LLC, Genoa Healthcare LLC and HCR Healthcare LLC, The Wall Street Journal reported.
The improved ratings were good news for shareholders, as Kindred, Sun and Skilled all saw their stock prices on an uptick. Kindred rose 1.4% from Wednesday to Thursday, closing at $12.4. Skilled rose by 3.28% during that period, closing at $4.41; Sun closed at $3.08.
While the long-term care sector is still struggling to regroup after a hefty cut to Medicare reimbursements became effective Oct. 1, it's now believed that there won't be additional cuts, said Avalere Health CEO Dan Mendelson.
“The ratings agencies were worried about the [Congressional] ‘super committee' and an unpredictable negative result,” Mendelson told McKnight's. The committee wound up making no official recommendations at all, thereby triggering 2% across-the-board cuts, which providers have had time to compensate for. “The perception of the ratings agencies perked up.”