S&P changes Versant Health view to negative

S&P said it revised its outlook on Versant Health Holdco Inc. to negative from stable and affirmed its B long-term issuer credit rating.

The agency also affirmed all issue ratings, including the B rating on the company's first-lien credit facility, consisting of a $75 million revolver due 2022 and $800 million first-lien term loan due 2024. The recovery rating is 3, indicating an expectation for meaningful (55%) recovery in the event of a payment default.

S&P also affirmed the CCC+ issue-level and 6 recovery ratings on Versant's $210 million second-lien term loan due 2025. The 6 recovery rating indicates an expectation for negligible (0%) recovery in the event of payment default.

“Our negative outlook reflects Versant's underperformance relative to our expectations, resulting in weakened credit protection measures, including elevated leverage and lower EBITDA interest coverage,” the agency said in a news release.

“It also factors in the possibility Versant will not delever below 7.5x by year-end 2019 and/or will face weakened coverage below 2.0x during this time period.”

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