Moody's trims Aveanna

Moody's Investors Service said it downgraded Aveanna Healthcare LLC’s corporate family rating to B3 from B2, the probability of default rating to B3-PD from B2-PD and Aveanna's senior secured second-lien term loan to Caa2 from Caa1.

Concurrently, Moody's affirmed the ratings of Aveanna's senior secured first-lien revolving credit facility, term loan and delayed-draw term loan at B2. There is no change to the speculative grade liquidity rating at SGL-2, signifying good liquidity.

“The downgrade of Aveanna's ratings reflects Moody's expectation for prolonged high financial leverage resulting from weaker-than-expected earnings. Based on the mid-point of Aveanna's fiscal year 2022 guidance, Moody's forecasts debt to EBITDA in the high seven times range. Further, Moody's expects that leverage will decline to the high six times range in fiscal year 2023. The weaker-than-expected EBITDA is predominantly driven by persistent nursing labor shortages and increased wage pressures,” the agency said in a press release.

The outlook remains stable.

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