Moody's rates Surgical Care loans Ba3, notes B3, Caa1

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings and an SGL-2 speculative grade liquidity rating to Surgical Care Affiliates, LLC, a Ba3 rating (LGD2, 27%) to the company's proposed senior secured credit facilities, a B3 rating (LGD5, 73%) to its proposed $150 million senior unsecured PIK toggle notes due 2015 and a Caa1 rating (LGD6, 91%) to its proposed $150 million senior subordinated notes due 2017.

The proposed credit facilities include a $125 million revolving credit facility due 2013 and a $355 million senior secured term loan due 2014.

The outlook is stable.

Surgical Care Affiliates is the company that resulted from TPG's $940 million acquisition of the surgery division of HealthSouth Corp.

The proceeds are expected to help fund the acquisition of the division from HealthSouth.

The agency said the ratings reflect the company's limited size, its declining revenue base, portfolio rationalization initiatives and high financial leverage resulting from the deal.

Offsetting this, the ratings are supported by the healthy fundamentals of the surgery center industry, the diversity of the company's operations in 35 states and Moody's belief that Surgical Care's profitability margins will likely improve with renewed focus and increased flexibility as a standalone entity.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.