Moody's cuts Surgery Center

Moody's Investors Service said it downgraded ratings of Surgery Center Holdings, Inc. (Surgery Partners) and placed the ratings under review for further downgrade. Moody's downgraded the corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD and the first-lien senior secured debt rating to B2 from B1. Moody's placed these ratings on review for further downgrade. The unsecured notes, rated Caa2, were also placed on review for downgrade. Additionally, Moody's downgraded the speculative grade liquidity rating to SGL-3 from SGL-2.

On March 18, the Centers for Medicare & Medicaid Services advised that all elective surgeries, non-essential medical, surgical and dental procedures be delayed in order to increase capacity and resources to fight the coronavirus outbreak. The Centers for Disease Control and Prevention, several governors and others are advising the same.

Based on the guidance to limit non-essential medical and surgical procedures, Moody's believes ambulatory surgery centers, like those owned by Surgery Partners, will experience a significant drop in volumes over the coming weeks, and the timing for recovery is uncertain.

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