Moody’s gives MPH B2, facilities Ba3, notes B3

Moody’s Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to MPH Acquisition Holdings LLC (Multiplan) following the merger of its parent company with Churchill Capital III on Oct. 8.

Moody’s also assigned a Ba3 rating to the proposed senior secured first-lien credit facilities, including a $450 million revolver and $2.47 billion term loan, and a B3 rating to the proposed $1.2 billion of senior unsecured notes. Moody’s also assigned a speculative grade liquidity rating of SGL-1, signifying very good liquidity.

“Multiplan’s B2 corporate family rating reflects its high leverage, despite the planned debt reduction in conjunction with the merger with Churchill Capital” said Jean-Yves Coupin, a Moody’s vice president and senior analyst, in a press release. “However, debt/EBITDA will improve towards 6x over the next 12 to 18 months driven by cost-saving initiatives and the recovery of medical procedure volumes following pandemic related pressures.”

Proceeds with $700 million of excess cash will be used to fully retire debt, including a $2.71 billion term loan G, $1.56 billion of senior notes, and pay related fees and expenses. Once repaid, Moody’s will withdraw the ratings on these instruments. Concurrently, Moody’s withdrew the ratings of Polaris Intermediate Corp.

Moody’s revised the outlook to stable from under review.

This concludes the review for upgrade started on July 13 after the announcement of the merger with Churchill Capital and planned refinancing of its capital structure, Moody’s said.

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