Moody's rates MultiPlan loan add-on B2

Moody's Investors Service said it assigned a B2 rating to the proposed $360 million add-on senior secured term loan C due 2013 of MultiPlan, Inc. and affirmed the company's B2 corporate family rating, the B2 rating on its existing senior secured facility and the Caa1 rating on the company's senior subordinated notes.

The outlook is stable.

These rating actions follow the company's announcement that it signed a definitive agreement to acquire Private Healthcare Systems, Inc. for a total transaction value of $365 million. MultiPlan plans to finance the acquisition with the proceeds from the new $360 million term loan.

The agency said the affirmation of the B2 corporate family rating reflects its view that the existing cash flow of Private Healthcare, the anticipated potential cost synergies and the increased scale, product diversification and covered lives of the combined company substantially offset the significant increase in debt leverage to finance the acquisition.

The B2 ratings for the senior secured credit facilities reflect the security and guarantee by all assets of MultiPlan and its subsidiaries, Moody's added.

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