RURAL/METRO CORP.

» Scottsdale-based company founded in 1948. » Provides ambulance and fire services in 21 states, including Arizona. » Owned by New York investment firm Warburg Pincus. » Faces a bond-market default resulting from a missed interest payment due July 15.

Rural/Metro was acquired by a private investment fund affiliated with Warburg Pincus LLC, and its stock was delisted two years ago. The $738 million transaction was partly financed by the sale of $200 million in senior unsecured notes.

Rating agency Moody’s Investors Service said the missed interest payment on notes due in 2019 would cause a default if not paid within a 30-day grace period. Moody’s gives a “junk” or high-yield rating of Caa2 to the company’s bonds. “Rural/Metro’s creditors may not fully recover the face value of their holdings,” Moody’s warned in a note.

Rural/Metro has contracts with cities, counties, hospitals and other entities. The company generated $664 million in revenue over the 12 months that ended March 31.

Moody’s warned of Rural/ Metro’s “highly leveraged capital structure and weak liquidity position, reduced earnings and negative free cash flow,” among other concerns. Contract pressures and uncompensated patient care have led to “cash-collection and revenuerecognition challenges, a shift in payor mix and the growing pressures of self-pay accounts,” Moody’s said.