Moody's rates Kinetic loan Ba2

Moody's Investors Service said it assigned a Ba2 rating to Kinetic Concepts, Inc.'s new $500 million senior secured revolving bank facility.

The agency also affirmed the issuer's Ba2 corporate family rating and downgraded the probability-of-default rating to Ba3 from Ba2.

The outlook is positive.

Proceeds will be used to retire the company's senior secured term loan B and senior subordinated notes. Moody's said it does not expect KCI to draw significantly on their revolver over the next 12 months because of its strong cash flow.

The positive outlook reflects expanding free cash flow and reduced outstanding debt, which help improve Kinetic's financial flexibility and credit metrics, the agency said.

Moody's said the probability-of-default rating reflects the change to an all first-lien bank capital structure with affirmative financial covenants.

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