Moody's rates MedCath loan B2

Moody's Investors Service said it assigned a B2 rating to MedCath Holdings Corp.'s proposed $200 million credit facilities and a B2 senior implied rating. Moody's also assigned a Caa1 senior unsecured issuer rating and a Caa1 rating to MedCath's $150 million senior unsecured notes.

The outlook is stable.

Moody's rates MedCath's $100 million senior secured revolving credit facility due 2009 at B2, its $100 million senior secured term loan due 2011 at B2, its senior implied at B2, its senior unsecured guaranteed issuer rating at Caa1, its $150 million senior secured term loan due 2011 at Caa1 and its speculative grade liquidity rating at SGL-3.

Moody's said the ratings reflect uncertainty surrounding specialty hospital industry prospects as a result of the moratorium placed on new hospital development by the Medicare Drug Improvement and Modernization Act of 2003, the company's relatively high leverage, the complex capital structure and the limited value of guarantees of subsidiaries, the risk associated with the ramp-up of newly opened facilities and their contribution to revenue and cash flow, the potential for a reduced number of cardiac procedures as a result of the evolution of drug-eluting stents and higher expenses for these products and the expectation of increased competition from acute care hospitals seeking to increase its market share of higher margin cardiac procedures.

Pro forma for the proposed transaction for the 12 months ended March 31, Debt to EBITDA adjusted for minority interest is forecasted to be 5.2 x, while adjusted debt to EBITDAR is projected to be 5.3x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.