Moody’s downgrades Corizon’s parent company, citing contract losses

Source: Brian Sonenstein, Shadow Proof, October 16, 2015

For the fourth time in two years, Moody’s Investor Service downgraded the Corporate Family Rating (CFR) for Valitas Health Services, a Missouri-based company which owns Corizon Health Services, the largest inmate medical provider in the United States. A CFR is assigned to a “corporate family,” rating a parent company and its subsidiaries as though it were one entity. In determining the ratings action, Moody’s cited volatility among Corizon’s contracts and confusion regarding the status of company’s agreement with Florida, where state prison officials claimed they would rebid around $1 billion in inmate medical contracts, but have yet to do so. Moody’s called for “greater clarity around the status of the company’s Florida contract” as one condition that would need to be fulfilled before the rating could be upgraded. … In April 2013, a Moody’s Ratings Action stated “near-term earnings pressure following the recent losses of the Maine, Maryland, and Pennsylvania DOC contracts” influenced a ratings downgrade. … Five months later, in September 2013, Moody’s downgraded Valitas again and changed their ratings outlook from stable to negative, where it has remained ever since. Moody’s downgraded Valitas a third time in August 2014, writing, “we expect the company to continue to face near-term earnings pressure following recent contract losses and certain underperforming state Department of Corrections contracts.”