Moody’s rates Aveanna second-lien loan Caa2

Moody's Investors Service said it affirmed Aveanna Healthcare LLC's B3 corporate family rating and B3-PD probability of default rating.

Concurrently, Moody's affirmed the B2 senior secured first-lien bank credit facilities ratings and assigned a Caa2 rating to the senior secured second-lien term loan.

In addition, Moody's revised the outlook to stable from negative.

The proceeds from the issuance of incremental first-lien debt and second-lien term loan along with additional sponsor equity will be used to acquire Maxim Health Services, Inc., extinguish current debt obligations, as well as pay fees and expenses associated with the transaction, which is expected to close in the second half of 2019.

“The change of outlook to stable from negative reflects Moody's expectation that organic revenue growth will remain solid and that Aveanna will recognize cost synergies related to the Maxim acquisition, but that financial leverage will remain very high,” Vladimir Ronin, Moody's lead analyst for the company, said in a news release.

“While the acquisition of Maxim will meaningfully enhance Aveanna's scale and further diversify its national footprint, it also exposes the company to significant business and integration risks.”

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