Moody’s drops New Millennium, loan to Caa3

Moody's Investors Service said it downgraded the ratings of New Millennium HoldCo, Inc., the parent of Millennium Health, LLC, including the corporate family rating to Caa3 from Caa2, probability of default rating to Caa3-PD from Caa2-PD and senior secured first-lien term loan rating to Caa3 (LGD 3) from Caa2 (LGD 3).

The outlook was changed to negative from stable.

Moody’s said the action reflects its view that Millennium Health will not be able to significantly increase its earnings and cash flow in 2017 relative to 2016 levels and that its leverage will remain extremely high.

Given debt/EBITDA in excess of 20 times, there is significant uncertainty about the company's longer-term ability to sustain its current capital structure and a high likelihood of debt impairment. In the event of a distressed debt exchange or bankruptcy, lenders would likely suffer material losses, the agency added.

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