S&P rates Confluent loans B-

S&P said it gave B- issue and 4 recovery ratings to Confluent Health LLC’s new $465 million secured term loan, $100 million delayed-draw term loan and $100 million revolving credit facility. The agency also affirmed Confluent’s B- issuer rating.

The proceeds are expected to be used to fully repay the $275 million secured term loan, also rated B- with a 4 recovery rating, and to fund planned acquisitions.

“We view the proposed transaction as credit neutral. Although the transactions raise leverage, this is offset by improving operating trends, increasing scale of the business, and our expectation that the company will generate $20 million in discretionary cash flow in 2022. Although Confluent remains small relative to the physical therapy peers we rate, we expect the company will more than double in size by the end of 2022 compared with 2020,” S&P said in a press release.

The outlook is stable.

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