Moody's rates DCMH B3, loans B1, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating to DCMH Acquisition2, Inc., which is the acquisition vehicle being used to acquire Managed Health Care Associates, Inc. by Diamond Castle Holdings, LLC.

Concurrently, Moody's said it assigned a B3 probability of default rating, ratings on the proposed credit facilities that include a B1 (LGD2/29%) rating on a proposed $15 million senior secured revolver due 2013, B1 (LGD2/29%) rating on a proposed $155 million senior secured term loan B due 2014, and a Caa2 (LGD5/83%) rating on a proposed $95 million second-lien term loan due 2015,and a stable outlook, noting that proceeds from the proposed credit facilities will be used to finance the acquisition and general corporate purposes.

According to the agency, the B3 corporate family rating is a function of Managed Health Care's very small size relative to the Moody's rated universe, the substantial amount of total unadjusted debt at roughly $250 million and the significant interest expense relative to cash flow.

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