Thanks to a recent focus on debt reduction, home health equipment maker Invacare Corp. (NYSE:IVC) has seen its corporate credit rating boosted by Standard & Poor’s.
The cred rating agency upgraded Invacare to “BB” from “B+,” according to S&P. Invacare’s outlook is “stable,” which is based on Standard & Poor’s expectation that the company will maintain low leverage and strong liquidity.
Standard & Poor’s defines a “BB” rating as “less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.” The rating is considered below investment-grade, which some call “junk.”
Survey on the Healthcare Financial Landscape Offers a Roadmap for Stakeholders
Zelis highlights how employers, payers, and consumers are integrating digital tools to manage healthcare costs.
Those major ongoing uncertainties include questions about future Medicare reimbursement rates, which are critical to Invacare since many of its wheelchairs and other products are paid for in part by Medicare. Declining reimbursements could squeeze Invacare’s margins, Standard & Poor’s said.
The much-discussed medical device tax that was included in this year’s health reform law has the potential to harm Invacare’s profitability, but since the tax won’t be implemented until 2013, the company has time to figure out how to minimize its effects, according to the statement.