Moody's eyes Summit Health for upgrade

Moody's Investors Service said it placed the ratings of WP CityMD Bidco LLC (Summit Health) on review for upgrade. The ratings on review include the B1 corporate family rating, B1-PD probability of default rating and the B1 ratings on the first-lien senior secured credit facilities. The outlook is revised to ratings under review from stable.

On Monday, VillageMD reported it agreed to buy Summit Health in a deal valued at about $8.9 billion.

VillageMD’s majority investor Walgreens Boots Alliance Inc. will invest $3.5 billion through a mix of debt and equity to support the acquisition. The acquisition is expected to close in the first quarter of 2023. The transaction is still subject to shareholders and regulatory approvals.

The review reflects the expectation that if the acquisition is completed, a larger, more diversified public company will own Summit Health. The review for upgrade also mirrors Summit Health's strong stand-alone performance and the favorable fundamental outlook for the business, Moody’s said.

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