Moody’s assigns AdaptHealth Ba3, notes B1

Moody’s Investors Service said it assigned a first-time Ba3 corporate family rating and Ba3-PD probability of default rating to AdaptHealth LLC, a subsidiary of AdaptHealth Corp. Moody’s also assigned a B1 rating to AdaptHealth’s offering of $300 million of senior unsecured bonds as well as an SGL-1 speculative grade liquidity rating.

The B1 rating reflects their structural subordination to the secured debt in the company’s capital structure, comprised of a $175 million unrated revolving credit facility and the $232 million term loan, the agency said.

The bonds benefit from loss absorption provided by about $144 million of unrated debt issued by AdaptHealth LLC’s indirect parent company, which does not have any guarantee from operating entities and is structurally subordinated to the proposed bond, Moody’s said.

Proceeds and a new unrated $232 million term loan will be used to refinance debt, a portion of which was used to fund recent acquisitions.

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