Moody's gives Matria Healthcare loans B1, B3

Moody's Investors Service said it affirmed Matria Healthcare, Inc.'s B1 corporate family rating and assigned ratings to the company's proposed first and second-lien credit facilities.

Assigned ratings include the company's $30 million senior secured first-lien revolver due 2011 at B1, $245 million senior secured first-lien term loan B due 2012 at B1, $125 million senior secured first-lien term loan C due 2007 at B1 and $85 million senior secured second-lien term loan due 2012 at B3.

The outlook has been changed to negative from stable.

Despite the significant increase to financial leverage as a result of Matria's pending $445 million acquisition of CorSolutions Medical, Inc., the ratings affirmation reflects an expectation of relatively low integration risk and rapid debt reduction in the near term, the agency said.

Moody's noted the ratings also acknowledge solid organic growth, improving margins and scale, and sharper focus on its core business pro forma for the intended acquisition and the company-announced plan for divesting Matria's Facet and Dia Real businesses.

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