S&P cuts Emdeon loan, rates new facility B+

Standard & Poor's said it affirmed the B corporate credit rating on Emdeon Inc.

The outlook is stable.

At the same time, the agency assigned a B+ rating to the company's new $160 million senior secured term loan due 2018.

It also lowered the issue-level rating on Emdeon’s $125 million senior secured revolving credit facility due 2016 and $1,301,000,000 senior secured term loan due 2018 to B+ from BB- and revised the recovery rating to 2 from 1, driven by the incremental increase to senior secured debt in the capital structure.

In addition, S&P affirmed its CCC+ issue-level rating on the company's $375 million senior unsecured notes due 2019. The 6 recovery rating on the notes remains unchanged and indicates expectations for negligible (0%-10%) recovery of principle in the event of payment default.

S&P said the ratings reflect Emdeon's "highly leveraged" financial risk profile and "fair" business risk profile.

"We calculate the pro forma leverage, adjusted for the $160 million of incremental debt, at around 6.3x and expect the company to improve leverage over the intermediate term through revenue growth and EBITDA expansion," S&P credit analyst Andrew Chang said in a news release.

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