AdaptHealth Secures S&P Upgrade, Strengthening Financial Outlook

AdaptHealth Corp. (NASDAQ: AHCO) has received an upgraded issue-level rating from S&P Global Ratings, reflecting improved recovery prospects for its senior unsecured debt. The agency raised its rating on the company’s senior unsecured notes to ‘BB-’ from ‘B+’, while also increasing the recovery rating from ‘5’ to ‘4’. This upgrade follows the company’s significant debt reduction efforts, including $225 million in prepayments on its senior secured term loan A, which is due in 2029.

The recent changes in rating indicate that AdaptHealth’s proactive measures enhance the likelihood of recovery in a default scenario. CEO Suzanne Foster stated that the upgrade validates the company’s ongoing commitment to strengthening its balance sheet and refining its strategic focus. Since the end of the third quarter of 2024, AdaptHealth has successfully reduced its term loan A balance by $275 million, achieved through robust free cash flow and proceeds from divesting non-core assets.

Company Commitment to Debt Reduction

“Debt reduction remains among our highest capital allocation priorities,” Foster emphasized. “We believe a strong balance sheet is essential to unlocking and sustaining value for shareholders.”

AdaptHealth is a prominent provider of healthcare-at-home solutions, catering to around 4.2 million patients annually throughout all 50 states. The company operates across four major segments: Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home. Its services include home medical equipment, remote monitoring technologies, chronic therapy support, and post-acute care services.

The organization collaborates with a wide range of referral sources, including hospitals, pulmonologists, sleep labs, skilled nursing facilities, and clinics. AdaptHealth maintains around 630 locations in 47 states, with financial support from Medicare, Medicaid, and commercial insurers.

Positive Financial Trajectory

The S&P upgrade reflects a more favorable financial trajectory for AdaptHealth as it continues to reposition its portfolio, reduce leverage, and concentrate on patient-centered home-care offerings. The company’s commitment to improving its financial standing is expected to yield significant benefits for its stakeholders in the long run.

As AdaptHealth moves forward, it aims to leverage its improved financial outlook to enhance its operational efficiency and expand its market presence in the healthcare industry.