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S&P trims Heartland Dental
Standard & Poor’s said it lowered its corporate credit rating on Heartland Dental Care LLC to B- from B. The outlook is stable.
S&P also lowered the rating on Heartland’s first-lien senior secured debt to B- from B. The recovery rating on this debt is 3, indicating expectations of meaningful (50% to 70%, lower end of range) recovery of principal in the event of default.
In addition, S&P lowered the rating on the company’s second-lien senior secured debt to CCC from CCC+. The recovery rating on this debt is 6, indicating expectations of negligible (0% to 10%) recovery in the event of default.
“The ratings downgrade reflects a combination of Heartland's still very high leverage, at over 8x; our expectation that it will continue its aggressive expansion plans; and margins that are on the lower side versus its rated DSO peers, despite steady to slightly improving operating performance and free cash flow generation,” said S&P credit analyst Arthur Wong in a news release.
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