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S&P rates AAC Holdings loan B-
S&P said it assigned a B- corporate credit rating on AAC Holdings Inc., which operates as American Addiction Centers.
The agency also said it assigned a B- rating to the company's senior secured credit facility, which consists of a $55 million revolving credit facility due 2022 and $210 million term loan B due 2023.
The recovery rating is 3, indicating 50% to 70% expected default recovery.
The outlook is positive.
The ratings reflect AAC's narrow focus on substance abuse treatment, an industry viewed as fragmented and competitive, S&P said.
The ratings also consider the company's limited track record of operating at its current scale, leverage expected to be sustained at between 4x and 5x, the agency said, and some uncertainty around the company's ability to generate positive discretionary cash flow.
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