Fitch gives Owens & Minor loan BB, notes BB-

Fitch Ratings said it gave BB/RR1 secured debt ratings to Owens & Minor Inc.’s and its subsidiaries’ new $300 million revolving credit facility due 2026 and a BB- issuer default rating to Byram Healthcare Centers, Inc. Fitch also assigned BB-/RR4 senior unsecured debt ratings to Owens & Minor’s proposed sale of $500 million of senior unsecured notes due 2029.

The note proceeds are expected to be used to pay the outstanding balance on the company’s term loan B. Fitch will withdraw the ratings on the current revolving credit facility and term loan B once they are repaid.

The agency also upgraded Owens & Minor’s and its subsidiaries’ IDRs to BB- from B and the companies’ senior secured debt to BB/RR1 from BB-/RR2.

“The upgrade reflects the material reduction in OMI’s debt achieved through the combination of growth in FCF, asset sales and proceeds from the sale of common stock. In addition, the upgrade and stable outlook incorporate Fitch’s expectation that operating performance and cash flow generation will improve beyond 2021 because of improved productivity, sustained demand for personal protective equipment, and steady resumption of elective procedures to pre-pandemic levels,” Fitch said in a press release.

OMI also plans to increase the borrowing limit of its accounts receivable securitization program to $450 million from $325 million

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