Moody’s downgrades Opal, loans, notes

Moody's Investors Service said it downgraded Opal Acquisition Inc.'s corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD.

Opal is the indirect parent of One Call Medical, Inc.

The agency also downgraded the company's first-lien senior secured revolving credit facility and term loan to B2 (LGD 3) from B1 (LGD 3) and senior unsecured notes to Caa3 (LGD 5) from Caa2 (LGD 5).

The outlook is negative.

Moody’s said the downgrade reflects its expectation that Opal's financial leverage will remain high over the next year. For the year ended 2015, debt/EBITDA was very high at 8.6 times. The agency expects leverage reduction to be hampered by weak earnings growth as states push to lower reimbursement rates. Thus, fee stagnation or compression will constrain the company's deleveraging abilities.

In addition, Moody's recognizes the potential for increased operational disruptions as the company focuses on integrating its six business units into a single operating platform.

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