Moody's lifts iHealth

Moody's Investors Service said it raised iHealth Technologies, Inc. corporate family rating to B1 from B2, probability-of-default rating to B2 from B3 and the proposed senior secured facilities to B1 (LGD3, 35%) from B2 (LGD3, 35%) as a result of the change in the proposed capital structure.

The change reflects the reduction in the proposed debt offering, resulting in lower opening leverage, a reduction in the proposed dividend to $129 million from $205 million, as well as expectations for further deleveraging stemming from larger debt amortization requirements for the proposed credit facility, according to the agency.

The senior secured term loan was reduced to $175 million from $250 million and the senior secured revolving credit facility was reduced to $30 million from $50 million.

The outlook is stable.

iHealth's B1 corporate family rating is supported by the company's moderate pro forma credit metrics, its competitive market position, its deep-domain clinical expertise and the benefits from secular healthcare reform, the agency said.

The rating reflects expectation that iHealth will maintain a conservative leverage profile and a good liquidity position, the agency added.

iHealth's B1 corporate family rating is constrained by its still sizable debt load, modest overall size and scale, high customer concentration and a concentrated business profile, the agency said.

Pro forma leverage as measured by its debt to EBITDA ratio will be in the 2.9x-range.

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