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Moody’s downgrades MMM
Moody’s Investors Service said it downgraded MMM Holdings, LLC’s senior secured debt rating and corporate family rating to Caa1 from B2.
The agency also said it downgraded the insurance financial strength rating of MMM’s regulated insurance subsidiary MMM Healthcare, LLC to Ba3 from Ba2.
The downgrades follow MMM Healthcare’s decision not to make its Sept. 30 principal payment due under its credit facility, Moody’s said.
The company is in the process of renegotiating the terms of its credit facility and has entered into a forbearance agreement with the creditors, which expires Oct. 31, the agency said.
The outlook remains negative.
The downgrade and negative outlook reflect the missed principal payment and the uncertainty of the ongoing negotiations with creditors, Moody’s said, along with uncertainty about the company’s ability to meet the required NAIC risk-based capital ratio of 200% of authorized control level.
These credit issues were the result of a combination of several adverse financial developments during 2014 and 2015, the agency said.
The company lost about 46,000 Medicare Advantage members in 2014 due to product cuts prompted by decreased government reimbursements, Moody’s said.
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