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S&P ups Surgical Care, rates loan B+, notes B-
Standard & Poor's said it raised its corporate credit rating on Surgical Care Affiliates Inc. to B+ from B.
The outlook is stable.
At the same time, the agency assigned a B+ issue-level rating to the company's proposed $600 million first-lien credit facility, the same level as the corporate credit rating. The recovery rating on this facility is 3, indicating an expectation of meaningful (50% to 70%; on the low end of the scale) recovery for lenders in the event of a payment default.
The new facility consists of a $250 million revolving credit facility and a $350 million term loan B.
In addition, the company plans on issuing $350 million of unsecured notes. S&P assigned a B- issue-level rating to these notes, two notches below the corporate credit rating. The recovery rating on the notes is 6, indicating an expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default.
"The upgrade reflects our expectation that the company will maintain leverage between 4x and 5x, despite the moderate initial increase in debt following the proposed transaction and its sponsor control," S&P credit analyst Tulip Lim said in a news release.
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