Adapt Upgrade Reflects Significant Debt Reduction and Improved Recovery Outlook, Says S&P Global
Adapt Health a nationwide provider of patient-centered healthcare-at-home services, announced that S&P Global Ratings has upgraded the company’s issue-level rating on its senior unsecured debt. The rating was raised from ‘B+’ to ‘BB-’, reflecting a more favorable assessment of the company’s financial position and recovery prospects. In addition to the upgrade, S&P Global also revised its recovery rating on the same debt, improving it to ‘4’ from the previous ‘5’ designation.
The rating agency noted that its decision was driven largely by Adapt Health’s significant debt-reduction efforts throughout the year. According to S&P, Adapt Health has prepaid approximately $225 million of its senior secured term loan A, which is scheduled to mature in 2029. This substantial prepayment, combined with additional debt reduction steps the company has taken over recent quarters, has meaningfully improved the expected recoveries on the company’s unsecured notes in a hypothetical default scenario. In other words, S&P now believes that, based on Adapt Health’s evolving financial structure, holders of the company’s unsecured debt would be in a better position to recover value should the company ever face severe financial distress.
AdaptHealth, which specializes in delivering home medical equipment, essential medical supplies, and a range of supportive healthcare services directly to patients, views the rating upgrade as a significant milestone. CEO Suzanne Foster emphasized that the improved rating validates the company’s multi-year strategy to strengthen its financial foundation.
S&P Global Rating’s upgrade is an important recognition of the deliberate actions we are taking to strengthen our balance sheet, improve our risk profile, and increase our financial flexibility,” Foster said. She noted that the company has been laser-focused on disciplined capital management, operational efficiency, and systematic balance sheet enhancement.
Since the end of the third quarter of 2024, AdaptHealth has reduced the outstanding balance of its term loan A by a total of $275 million. This reduction, Foster explained, was funded through the company’s strong free cash flow generation along with proceeds from strategic divestitures. Specifically, AdaptHealth has sold certain non-core assets in order to sharpen its strategic focus and allocate capital more effectively toward its highest-priority initiatives.
Foster added that AdaptHealth’s leadership team believes maintaining a robust balance sheet is essential not only for the company’s long-term financial health but also for its ability to fuel sustained value creation for shareholders. “Debt reduction remains among our highest capital allocation priorities,” Foster said. “We believe a strong balance sheet is essential to unlocking and sustaining value for shareholders.”
The company’s broader strategy aims to position AdaptHealth as a leader in the evolving healthcare-at-home landscape. This includes strengthening its service capabilities, enhancing operational efficiencies through technology, and focusing on segments that align most closely with its long-term goals. As the healthcare industry continues its shift toward home-based care models—driven by patient preference, payer incentives, and the broader push for value-based care—AdaptHealth sees significant opportunities for sustainable growth.
The rating upgrade from S&P Global comes at a critical time for the company, which has been working to streamline operations and reinforce its financial footing following periods of industry-wide pressure and macroeconomic challenges. The improved rating is expected to enhance AdaptHealth’s borrowing capacity and potentially lower future financing costs, giving the company more room to pursue strategic initiatives and further debt reduction.
S&P’s report underscored that AdaptHealth’s proactive debt-repayment strategy was central to its decision. The significant prepayment of the term loan A reduced secured debt levels, thereby improving the expected recovery rate for unsecured creditors. By decreasing the proportion of secured claims that would be ahead of unsecured noteholders in a distressed scenario, the company effectively raised the priority of unsecured debt within its capital structure.
As AdaptHealth looks ahead, the company aims to maintain momentum in its financial strengthening efforts while continuing to deliver high-quality, patient-centered services. Leadership believes that the actions taken in recent quarters—paired with disciplined financial planning, strong operational execution, and a renewed focus on strategic assets—will position the company for long-term stability and growth.
The company sees the S&P upgrade as more than just an improvement in its credit profile—it is also viewed as external validation of its ongoing transformation. With an emphasis on balancing financial prudence and strategic clarity, AdaptHealth is working to build a foundation capable of supporting future expansion while creating durable value for its patients, partners, and shareholders.
About AdaptHealth Corp.
AdaptHealth is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment, medical supplies, and related services. The Company operates under four reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, (iii) Diabetes Health, and (iv) Wellness at Home. The Sleep Health segment provides sleep therapy equipment, supplies and related services (including CPAP and BiLevel services) to individuals for the treatment of obstructive sleep apnea. The Respiratory Health segment provides oxygen and home mechanical ventilation equipment and supplies and related chronic therapy services to individuals for the treatment of respiratory diseases, such as chronic obstructive pulmonary disease and chronic respiratory failure. The Diabetes Health segment provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes. The Wellness at Home segment provides home medical equipment and services to patients in their homes including those who have been discharged from acute care and other facilities. The segment tailors a service model to patients who are adjusting to new lifestyles or navigating complex disease states by providing essential medical supplies and durable medical equipment.
The Company is proud to partner with an extensive and highly diversified network of referral sources, including acute care hospitals, sleep labs, pulmonologists, skilled nursing facilities, and clinics. AdaptHealth services beneficiaries of Medicare, Medicaid, and commercial insurance payors, reaching approximately 4.2 million patients annually in all 50 states through its network of approximately 630 locations in 47 states.
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