Moody's rates LHP loans B3

Moody's Investors Service said it assigned B3 corporate family and probability of default ratings to LHP Hospital Group, Inc.

Moody's also assigned a B3 (LGD 3, 46%) rating to LHP Operations Co., LLC's proposed senior secured credit facilities, consisting of a $100 million revolver and a $275 million term loan.

The outlook is stable.

Moody's said the B3 corporate family rating reflects its belief that the company's relatively small revenue base, considerable geographic concentration and reliance on only two facilities for a significant portion of its pro forma EBITDA less minority interest represent risks and limit the ability to absorb negative business developments without significant detriment to its credit profile.

Moody's said it also expects that the company will look to aggressively pursue additional development opportunities to increase scale, requiring significant investment and resulting in negative free cash flow over the near term.

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