Moody’s rates Kindred Healthcare B2, loan B3

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Kindred Healthcare LLC, the borrower that will encompass the hospital and rehabilitation operations being carved out of Kindred Healthcare, Inc. (B2 direction uncertain).

The agency also assigned a B3 to the proposed first-lien senior secured term loan.

The outlook is stable.

Term loan proceeds, along with borrowings from a new asset-based lending (ABL) facility (unrated) and about $275 million of new equity, will be used to facilitate the acquisition of Kindred LLC by private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe (WCAS).

Moody’s said the B2 corporate family rating reflects Kindred LLC's high financial leverage in the context of ongoing reimbursement pressures and low growth outlook for the overall business.

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