I disclosed earlier that I've been working on some ambulance licensing issues at the Legislature, so I've been paying quite a bit of attention to Rural/Metro, but not blogging much about it. Now it appears that the company is in some financial trouble and the story is likely to break out anyway, so I might as well write about it.
By way of background, here's a Moody's report from May 30th.
Moody's Investors Service downgraded Rural/Metro Corporation's ("Rural/Metro") corporate family and probability of default ratings to Caa2 from B3. In addition, Moody's lowered the senior secured credit facilities to B3 from B1 and the senior unsecured notes to Caa3 from Caa2. The ratings outlook remains negative.
The story took an interesting twist in the last couple weeks when RM reshuffled its local lobbying team. The move was surprising because the team is highly talented and has generated good results, so it looks like a fairly desperate cost cutting move.
Now sources are telling me that RM missed a large bond payment this week and may be moving toward bankruptcy protection.
I mentioned earlier that RM essentially has a monopoly on private ambulance service because state statute makes it almost impossible to get an ambulance license and then the company bought all the competitors. If RM goes under, we will get one more example of why state sponsored monopolies are a bad idea.