S&P rates Median loan B

S&P said it assigned a B long-term issuer credit rating to Median BV and B issue-level and 3 recovery ratings to a proposed term loan B.

The outlook is stable.

Waterland Private Equity has announced its intention to create a leading European rehabilitation and behavioral health services provider by merging two companies in its portfolio, Germany-based Median, and U.K.-based Priory Group, with the transaction closing by October 2021.

Newly created holding entity Median BV is considering a debt issuance to refinance existing debt at Median and the acquisition bridge loan at Priory Group, including an €800 million covenant-lite term loan B and a €120 million revolving credit facility, which will be undrawn at closing.

“Despite execution risks and a continued challenging operating environment in the group's main markets, we believe its increased scale and payor profile diversification will enable it to generate positive free operating cash flow (FOCF) of €60 million-€70 million and maintain adjusted fixed-charge coverage of about 1.6x in 2022,” S&P said in a news release.

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