Moody's cuts Envision, rates AmSurg

Moody's Investors Service said it downgraded Envision Healthcare Corp.'s corporate family rating to C from Caa3, probability of default rating to C-PD from Caa3-PD, the senior secured term loan to C from Caa3, the ABL facility rating to Ca from B1, and the rating on the senior unsecured global notes to C from Ca.

Concurrently, the agency assigned a Caa1 rating to Envision subsidiary AmSurg, LLC’s senior secured revolving credit facility, a Caa2 rating to the senior secured first-lien term loan and a C rating to the new senior secured second-lien term loan. Moody's also assigned a Ca rating to the new Envision senior secured first-out term loan, and C ratings to Envision’s new senior secured second- and third-out term loans due in March 2027. Moody's gave AmSurg a stable outlook mirroring Envision's stable outlook.

The rating actions follow a series of transactions including restructuring of Envision's senior secured credit facilities and obtaining a new revolving credit facility in July and other debt in April at AmSurg.

“Moody's deemed Envision's transactions to be a distressed exchange as the loans were exchanged at a price below par, which is a default under Moody's definition,” the agency said in a press release.

The downgrade mirrors the position that “Envision’s capital structure is unsustainable,” Moody’s said. It considers Envision filing for bankruptcy or undertaking a major restructuring to be highly likely.

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