Moody’s cuts Paradigm first-lien rating; rates loans B3, Caa2

Moody's Investors Service said it affirmed the ratings of Outcomes Group Holdings, Inc., parent company of Paradigm Acquisition Corp., including the B3 corporate family rating, the B3-PD probability of default rating and the Caa2 second-lien senior secured rating.

At the same time, Moody's downgraded the first-lien senior secured rating to B3 from B2 reflecting the higher quantum of first-lien debt within the new capital structure.

Moody's also assigned a B3 rating to the company's proposed incremental first-lien senior secured term loan, and a Caa2 rating to the company's incremental second-lien senior secured term loan.

The proceeds from the credit facilities will fund a shareholder dividend, repay all outstanding amount of the revolver, and pay transaction fees and expenses.

The outlook is stable.

“The ratings affirmation reflects Paradigm's strong operating performance, including during the coronavirus pandemic, and ample cash flow generation,” the agency said in a news release.

“While leverage will increase to 6.5x pro forma for the proposed debt-funded dividend and acquisition of HomeCare Connect, Moody's expects earnings growth and debt repayment that will allow leverage to improve to below 6.0x within 12-18 months.”

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