S&P ups Ardent debt, rates loan B-

S&P said it affirmed its B corporate credit rating on Ardent Legacy Holdings Inc.

The outlook is stable.

At the same time, the agency raised the issue-level rating on Ardent's first-lien senior secured debt to BB- from B and revised the recovery rating to 1 from 3, indicating expectations for very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default.

In addition, S&P assigned a B- issue-level rating and 5 recovery rating to Ardent's proposed $300 million unsecured term loan. The 5 recovery rating indicates an expectation for modest (10%-30%; rounded estimate: 25%) recovery.

Ardent is issuing the $300 million term loan to finance its acquisition of a majority stake in East Texas Medical Center.

“The transaction, coupled with its late-2017 acquisition of St. Francis Hospital in Kansas, increases the company's scale by over 40%, but also results in higher leverage, and significantly weighs on margins and free cash flow generation for 2018,” the agency said in a news release.

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