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S&P assigns ADMI, loans B; notes CCC
Standard & Poor's said it assigned its B corporate credit rating to ADMI Corp., the parent company of Aspen Dental Management Inc.
The outlook is stable.
At the same time, the agency assigned its B senior secured debt and 3 recovery rating to ADMI's $415 million senior secured facility, consisting of a $35 million revolving credit agreement due 2020 and a $380 million term loan B due 2022. The 3 recovery rating indicates an expectation for meaningful (50% to 70%, at the lower end of the range) recovery of principal in the event of payment default.
In addition, S&P assigned its CCC issue-level rating to the $150 million senior unsecured notes due 2023 and 6 recovery rating. The 6 recovery rating indicates expectations of negligible (0% to 10%) recovery in the event of a payment default.
The ratings on ADMI are essentially unchanged from the ratings on Aspen Dental Management Inc. ADMI is the parent holding company of Aspen Dental, which is being recapitalized by another private equity firm.
"Our assessment of ADMI's business risk profile as 'weak' reflects its especially narrow focus on dental management services and the challenges of maintaining double-digit growth from a larger base, as it strives to continue to aggressively expand via de novo office openings and grow revenues faster than the growth of the U.S. dental services industry," S&P credit analyst Arthur Wong said in a news release.
As part of the recapitalization, ADMI is refinancing the debt, and leverage will slightly increase.
"However, we view the new capital structure as consistent with our assessment of a '"highly leveraged" financial risk profile," Wong added in the release.
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