S&P gives B- to New Millennium CCR, loan

S&P said it assigned its B- corporate credit rating to New Millennium Holdco Inc.

The outlook is stable.

At the same time, the agency assigned its B- issue-level rating and 4 recovery rating to New Millennium's first-lien term loan, indicating expectations for average (30%-50%, at the higher end of the range) recovery for lenders in the event of payment default. Millennium Health LLC is a co-borrower of the loan.

New Millennium Holdco was formed in December 2015 when predecessor entity Millennium Health LLC emerged from bankruptcy protection. The company's bankruptcy filing was precipitated by a $256 million payment to the U.S. Department of Justice to settle allegations of Medicare billing irregularities, as well as reimbursement and policy changes by commercial payers that led to sharp declines in net revenue per specimen tested.

"Our assessment of Millennium's business risk reflects the company's narrow focus on the clinical toxicology testing industry, with a concentration on pain management, treatment, and addiction facilities, and exposure to reimbursement risk from both government and commercial payors," S&P credit analyst Shannan Murphy said in a news release.

It also considers Millennium's industry leading market position and its substantial scale, which the agency said it believes will allow the company to generate some operating efficiencies to offset declining reimbursement.

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