S&P assigns B to Team Health secured notes

Standard & Poor’s said it assigned its B issue-level rating (two notches below the corporate credit rating on the holding company) to Team Health Inc.’s proposed $545 million senior unsecured notes, which are being issued to finance an acquisition.

S&P assigned a 6 recovery rating to this debt, indicating an expectation of negligible (0% to 10%) recovery for bondholders in the event of a payment default.

“Our BB- corporate credit rating on Team Health Holdings Inc. reflects its scale in the narrow, highly fragmented health care staffing market, with a significant concentration in emergency medicine (which is expected to represent around 55% of pro forma revenue),” S&P said in a news release. “It also reflects our view that reimbursement risk remains a major risk facing Team Health and other health care providers given the ongoing focus on health care cost containment.”

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