Moody’s rates Acadia loan Ba2, notes B3

Moody's Investors Service said it confirmed the ratings of Acadia Healthcare Co., Inc., including the B1 corporate family rating and B1-PD probability of default rating.

The agency also assigned a Ba2 (LGD 2) rating to the company's proposed $955 million senior secured term loan and a B3 (LGD 5) rating to the proposed offering of $390 senior unsecured notes.

The outlook is stable.

Proceeds from the new term loan B and unsecured notes will be used, along with proceeds from a previously completed equity offering, to fund the acquisition of Priory Group No 3 plc (B2 stable).

"Acadia's pro forma adjusted debt to EBITDA will increase to a very high 5.9 times, before considering the benefit of synergies of the Priory and CRC Health Group acquisitions," Moody’s senior vice president Dean Diaz said in a news release.

"However, a combination of EBITDA growth and stable cash flow will allow for debt repayment that will contribute to a rapid reduction in leverage over the next 12 to 18 months."

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