S&P trims MultiPlan

S&P said it lowered its ratings on MultiPlan Corp. to B from B+, its senior secured debt to B from B+ and its senior unsecured debt to CCC+ from B-.

“Revenue growth, cash flow generation, and the pace of deleveraging have lagged our expectations. This weaker performance partly owes to the effects of the pandemic-disrupted period, which constrained use of the company's services, followed by a period of high inflation that affected consumer behavior. Other factors include a shift in business mix, contract renewal rate pressure, and diminished operating efficiency, which we partly attribute to a shift in demand for MultiPlan's services and incremental spend for initiatives focused on new product and services development through 2024,” S&P said in a press release.

The agency said it forecasts the company’s S&P Global Ratings-adjusted debt-to-EBITDA leverage will be about 7.5x in 2023 and 7x in 2024. “These figures compare unfavorably with our previous forecast of adjusted leverage of 5x-5.5x through 2024. We also expect cash flow to be weaker than our previous expectations, with funds from operation generation at $220 million to $250 million through 2024.”

The outlook is stable.

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