Moody’s rates Navicure B3; facilities B2, Caa2

Moody's Investors Service said it assigned Navicure, Inc. a B3 corporate family rating, a B3-PD probability of default rating and B2 ratings to a proposed $50 million first-lien revolving credit facility and $435 million first-lien term loan.

The agency also assigned a Caa2 rating to a proposed $185 million second-lien term loan.

Proceeds from the term loan facilities will be used, along with cash equity proceeds from management and sponsor Bain Capital, to effect Navicure's purchase of ZirMed, pay off $95 million of net Navicure debt and cover transaction fees and expenses.

The outlook is stable.

Moody’s said the B3 corporate family rating reflects Navicure's small scale, exceptionally high pro-forma debt-to-EBITDA leverage, and integration risks as the healthcare revenue cycle management provider takes on, with private equity backing, ZirMed, an industry player less profitable and 50% larger than itself.

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