Moody's rates Cohr loans B1

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings to Cohr Holdings, Inc. (doing business as Masterplan Inc.) and B1 ratings with loss-given-default assessments of LGD3 (35%) to its proposed $20 million first-lien revolving credit facility due 2013 and $130 million first-lien senior secured term loan B1 due 2013.

The outlook is stable.

Proceeds from the proposed facilities will be used to purchase the equity of Masterplan from the former sponsor group, to repay existing long-term debt and to pay transaction fees and expenses.

The agency said the B2 corporate family rating reflects the company's weak financial metrics, primarily high leverage and modest free cash flow; significant customer concentration, which is somewhat offset by the existence of long-term contracts and a high customer retention rate; Masterplan's positioning as a very small player in the highly competitive market for diagnostic imaging and biomedical equipment maintenance and repair services; the capitated nature of the company contracts; and its reliance on technology to effectively manage its highly dispersed network of technicians.

The impact of these negative factors is lessened by the quality of Masterplan's client relationships, the cash flow stability afforded by the company's contracts, the lack of direct government reimbursement risk and the minimal capital expenditure and working capital requirements inherent in its business model, Moody's said.

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