AdaptHealth Secures S&P Upgrade as Debt Reduction Bolsters Outlook

AdaptHealth Corp. (NASDAQ: AHCO), a prominent provider of healthcare-at-home solutions, has received an upgraded issue-level rating from S&P Global Ratings. This upgrade underscores the company’s improved financial outlook following significant reductions in its debt obligations. S&P has raised its rating on the company’s senior unsecured notes to ‘BB-’ from ‘B+’, reflecting stronger recovery prospects for the company’s debts.

The rating change comes after AdaptHealth made $225 million in prepayments on its senior secured term loan A, which is due in 2029. According to S&P, these reductions enhance the likelihood of recovery in the event of a hypothetical default scenario. The agency also elevated the recovery rating from ‘5’ to ‘4’, indicating a more favorable assessment of the company’s financial health.

CEO Highlights Commitment to Debt Reduction

CEO Suzanne Foster emphasized that this upgrade reaffirms the company’s commitment to strengthening its balance sheet and sharpening its strategic focus. Since the end of the third quarter of 2024, AdaptHealth has reduced its term loan A balance by $275 million. This was achieved through strong free cash flow and proceeds from the divestiture of non-core assets.

“Debt reduction remains among our highest capital allocation priorities, as we believe a strong balance sheet is essential to unlocking and sustaining value for shareholders,” Foster stated. AdaptHealth’s strategy focuses on delivering patient-centered care while ensuring financial stability.

Expanding Reach and Services

AdaptHealth serves approximately 4.2 million patients annually across all 50 states. The company operates through four major segments: Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home. It provides a range of services, including home medical equipment, remote monitoring technologies, chronic therapy support, and post-acute services.

The company’s extensive network includes partnerships with hospitals, pulmonologists, sleep labs, skilled nursing facilities, and clinics. AdaptHealth operates around 630 locations in 47 states, with support from reimbursement programs including Medicare, Medicaid, and commercial insurers.

The recent S&P upgrade signals a more favorable financial trajectory for AdaptHealth as it continues to reposition its portfolio, reduce leverage, and concentrate on its core offerings in home care. This strategic focus aims to enhance both patient outcomes and shareholder value.

As AdaptHealth advances its financial strategy, the healthcare-at-home market continues to expand, presenting new opportunities for growth and innovation in patient care delivery.