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Moody's changes Alliance outlook to stable
Moody's Investors Service said it changed Alliance Healthcare Services, Inc.'s outlook to stable from negative and affirmed its corporate family rating at B1, probability of default rating at B2-PD, $50 million revolving credit facility and $520 million senior secured term loan (upsized by $30 million) at B1 (LGD 3) and speculative grade liquidity rating at SGL-2.
The agency said the change in outlook reflects Alliance's strengthening credit metrics and improved performance in its radiation oncology business. In addition, Moody's believes that the company will benefit from improved cash flow in the years ahead following a significant increase in capital expenditures to fund growth opportunities, along with improving volumes and the completion of a multiyear cost restructuring program.
Alliance's B1 corporate family rating reflects the company's high financial leverage, small size and challenging operating environment, Moody’s said.
The rating benefits from Alliance's unique business model of partnering with hospitals, which temporarily shields the company from the direct effect of changes in third-party reimbursement, the agency added.
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