Moody's ups Surgery Center loan to B1, rates loan Caa2

Moody's Investors Service said it rated Surgery Center Holdings, Inc.'s proposed $70 million incremental second-lien term loan due 2020 at Caa2.

Concurrently, the agency raised Surgery Partners' first-lien senior secured credit facilities rating to B1 from B2.

The B3 corporate family rating, B3-PD probability of default rating and Caa2 existing second-lien senior secured term loan rating were affirmed.

The outlook is stable.

Proceeds from the incremental second-lien term loan, along with $8 million of balance sheet cash, will be used to pay a $73 million dividend to shareholders and cover transaction fees and expenses.

Moody's said it raised Surgery Partners senior secured first-lien term loan rating to reflect changes in the debt capital structure, namely the additional $70 million junior second-lien debt that is subordinated to the senior secured first-lien term loan and provides added cushion to the existing senior secured first-lien term loan in accordance with Moody's loss given default methodology.

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