Moody's upgrades Heartland Dental

Moody's Investors Service said it upgraded the ratings of Heartland Dental, LLC, including the corporate family rating to B3 from Caa1, the probability of default rating to B3-PD from Caa1-PD, the first-lien senior secured debt rating to B2 from B3 and the senior unsecured notes to Caa2 from Caa3.

The upgrade reflects Heartland's return of patient volumes to near pre-pandemic levels and reduced debt/EBITDA to around 7x for the 12 months ended Dec. 31, 2020. At the same time, Heartland has improved liquidity with $245 million cash balance as of Dec. 31, 2020, and an undrawn $135 million revolver. Heartland's liquidity was bolstered from Cares Act funding, reduction in variable costs, a $200 million add-on term loan and a $122 million equity raise in August 2020. Moody's considers the equity raise, which came from both owner dentists and the private equity sponsor, to be a positive governance factor,” the agency said in a press release.

The outlook is stable.

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