Fitch rates Sedgwick CMS loan B

Fitch Ratings said it assigned a B issuer default rating to Sedgwick CMS Holdings Inc. and a B rating with a recovery rating of 4 to the company's $340 million senior secured credit facility, which includes a $300 million term loan and a $40 million revolver.

The outlook is stable.

Fidelity National Financial acquired Sedgwick, a third-party administrator, for $635 million. The senior secured credit facility will be the sole responsibility of Sedgwick and will not be guaranteed by Fidelity, Fitch said.

The company is expected to produce $400 million in total revenue during 2005. The $340 million in senior secured debt places a heavy leverage burden on Sedgwick as measured by a pro forma year-end 2005 debt to EBITDA of 5.8x. Further, EBITDA coverage of interest expense is expected to remain below 3x for 2006, which is considered relatively thin coverage.

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