Moody’s assigns Script Relief CFR, loan B2

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Script Relief LLC and a B2 (LGD 3) rating to its proposed $205 million senior secured first-lien term loan.

The outlook is stable.

Proceeds will be used to fund a $200 million dividend to its owners and to pay fees and expenses. ScriptRelief is a joint venture between Twenty Star LLC (58% ownership) and Catamaran Corp. (Ba2, under review for upgrade, 42% ownership). Separately, UnitedHealth Group Inc. (A3, negative) is acquiring Catamaran. The transaction is expected to close in May.

Moody’ said the B2 corporate family rating reflects ScriptRelief's high business risk given its narrow focus on providing pharmacy discount cards for customers to purchase prescription drugs at retail pharmacies at discounted prices on drugs that are listed on its partner's – Catamaran's national formulary.

The rating also reflects ScriptRelief's small scale, and overall undifferentiated services in a very fragmented and an increasingly competitive market, which Moody's believes has low barriers to entry.

The rating is also constrained by very short history as an operating entity and its meaningful customer and drug concentration, the agency said.

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