Moody’s eyes Magellan Health for trim

Moody’s Investors Service said it placed the ratings of Magellan Health, Inc. under review for downgrade. The ratings placed under review include the Ba1 corporate family rating, the Ba1-PD probability of default rating and the Ba1 (LGD 4) rating on Magellan’s senior unsecured notes. The speculative grade liquidity rating is unchanged at SGL-1.

“The rating review is prompted by Magellan’s decision to sell its Magellan Complete Care business for $850 million. Despite an influx of cash, the divestiture has certain negative credit implications related to reduced scale and diversity. Magellan Complete Care represented approximately 38% of the company’s 2019 revenue. Despite certain cost control challenges in Magellan Complete Care, the Ba1 rating gave considerable weight to Magellan’s broad product offerings spanning numerous healthcare areas, ranging from behavioral health to the comprehensive care management of complex patients in Magellan Complete Care,” Moody’s said in a press release.

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