Moody’s might drop ATI Holdings

Moody's Investors Service said it placed the ratings of ATI Holdings, Inc. (ATI Physical Therapy) under review for downgrade, including the B2 corporate family rating, B2-PD probability of default rating and the B1 instrument ratings on its senior secured credit facilities.

The review was prompted by the March 29 announcement that Advent International entered into a definitive agreement to acquire ATI Physical Therapy.

Although financing details have not been provided, Moody's said it expects that financial leverage will increase as a result of the acquisition of the company by Advent International.

The review will focus primarily on the financial leverage and the capital structure that will result from the sale to Advent International, as well as ongoing operating trends at ATI Physical Therapy. Moody's will also evaluate current and projected operating performance, as well as the proposed ownership and governance structure.

The agency expects to withdraw the existing credit facilities ratings upon repayment as part of the transaction.

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