Moody’s gives Matrix CFR, loans B2

Moody's Investors Service said it assigned credit ratings to Community Care Health Network, LLC (doing business as Matrix Medical Network), including a B2 corporate family rating, a B3-PD probability of default rating and B2 ratings on a proposed $10 million first-lien revolving credit facility and $238 million first-lien term loan.

Roughly $243 million of proceeds from the credit facilities, $187 million of cash common equity from sponsor Frazier Healthcare Partners and $125 million of rolled over equity from Providence Service Corp., will be used to effect a stock subscription agreement whereby Frazier will purchase a 60% interest in Providence Service’s Matrix business unit.

The agreement values Matrix at about $538 million, or about 10 times its expected 2016 EBITDA.

The outlook is stable.

Moody’s said the B2 corporate family rating takes into account Matrix's high, 4.8 times debt-to-EBITDA leverage (on a Moody's-adjusted basis) and small, narrowly focused $220 million revenue base that is driven by the company's ability to drive efficiencies in providing health risk assessments for its Medicare Advantage insurance company customers.

The ratings are supported by the company’s good, first-mover market position, by demand characteristics for health risk assessments, whose annual use is supported by the Affordable Care Act, and by demographic and legislative trends that are currently in its favor, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.