S&P gives WD Wolverine loans B, CCC+

S&P said it assigned its B corporate credit rating to pharmacy benefit management servicer WD Wolverine Holdings LLC. The rating outlook is stable.

At the same time, the agency assigned its B issue-level rating to WD Wolverine's proposed first-lien credit facility and assigned a CCC+ issue-level rating to its second-lien credit facility. The recovery rating on the first-lien debt is 3, indicating expectations for meaningful (50%-70%; at the high end of the range) recovery in the event of payment default. The recovery rating on the second-lien debt is 6, indicating expectations for negligible (0%-10%) recovery in the event of payment default.

"WD Wolverine Holdings LLC is an integrated pharmacy benefit manager (PBM) that contracts primarily with small to midsize self-insured employers, unions, municipals, and providers in the U.S.," S&P credit analyst James Uko said in a news release.

The company currently maintains a network of about 67,000 retail pharmacies and wholly owned mail and specialty pharmacies nationwide. The company covers 1 million lives and processes 6 million prescriptions annually.

S&P said the stable outlook reflects its expectation that the company will generate double-digit organic revenue growth, maintain high-single-digit margins and produce positive cash flow.

However, the agency believes the company's leverage will remain above 5 times over the next two years given its financial sponsor owner that will shape a financial policy that prioritizes shareholder returns over debt reduction.

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