S&P cuts CDRH Parent

S&P said it downgraded the ratings on CDRH Parent Inc. and its first-lien term loan to CCC- from CCC+ and the issue-level rating on its second-lien term loan to C from CCC-. The 4 recovery rating (rounded estimate: 40%) on the first-lien term loan and 6 recovery rating (rounded estimate: 0%) on the second-lien term loan remain unchanged. CDRH does business as Healogics Inc.

“The downgrade reflects our view that Healogics will struggle to significantly improve its operating and financial performance, eliminate its cash flow deficits, and service its very high debt burden, which leads us to believe that its current capital structure is unsustainable. The company relies on its revolver capacity to meet its current and future obligations and will maintain a slim cushion under its 6.75x maximum secured net leverage covenant in 2020. We expect Healogics' EBITDA to be insufficient to cover its interest expense and capital expenditure in 2019 and 2020,” said S&P in a press release.

The outlook is negative.

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