S&P Slashes Rehab Provider Upstream to CCC+ on Limited Upside

S&P Global Ratings downgraded Upstream Newco deeper into junk Thursday, saying a lack of cash and labor cost increases have made the company’s capital structure potentially unsustainable.

• “We believe the company’s options for growth with this capital structure are limited,” S&P analysts wrote in a statement
  • S&P knocked its credit grade down two rungs from B to CCC+
• Says outpatient rehab and physical therapy provider faces numerous headwinds that limit its upside potential
  • Current reimbursement environment continues to be “problematic” with Medicare rate cuts in each of the past four years and an adverse payor mix shift
  • Also grappling with ...