Moody's gives Kindred loan B1

Moody's Investors Service said it assigned a B1 (LGD 3, 43%) rating to Kindred Healthcare, Inc.'s proposed $1 billion term loan B due 2021.

At the same time, the agency affirmed the existing ratings of Kindred, including the B1 corporate family rating and B1-PD probability of default rating.

The outlook is stable.

Proceeds from the new term loan, a new $750 million ABL revolving credit facility (not rated) and a potential $500 million senior unsecured debt restructuring will be used to refinance the company's existing capital structure.

Moody's said the proposed term loan is rated at the same level as the corporate family rating due to the increase in expected loss at the senior secured debt level. This results from the larger size of the proposed credit facility and a reduction in the expected amount of unsecured debt in the capital structure following the refinancing. Kindred currently has $550 million of senior unsecured notes outstanding. Moody's said it will withdraw the ratings on the existing bank debt at the close of the transaction.

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