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Moody's affirms BioScrip's ratings after refinancing

Moody's affirmed BioScrip Inc.'s Caa2 corporate family rating and Caa3 senior unsecured notes rating and upgraded the probability of default rating to Caa1-PD from Caa2-PD.

The ratings action comes after news that the company plans to issue $310 million worth of debt to refinance its existing senior credit facility and priming credit agreement.

BioScrip's corporate family rating takes into account the company's very high leverage and weak liquidity profile, said Todd Robinson, a Moody's analyst.

Moody's said the upgrade of the probability of default rating reflects the decreased probability of default in the next 24 months due to the extended maturity profile and the additional liquidity provided by the transaction. These factors combined provide the company a longer runway to achieve operational improvement and the targeted cost savings.

Outlook on the ratings is stable, indicating the company's very high leverage with a potentially unsustainable capital structure. It also incorporates Moody's expectation that liquidity will cover cash needs in the year ahead.