Moody’s ups Zelis, rates loans B1

Moody's Investors Service said it upgraded Zelis Payments Buyer, Inc.'s corporate family rating to B1 from B2, probability of default rating to B1-PD from B2-PD, and the ratings on the backed senior secured first lien term loans B and backed senior secured first-lien revolving credit facility to B1 from B2. Concurrently, the agency assigned B1 ratings to the planned $1.984 billion backed senior secured first-lien term loan B due 2029 and proposed $200 million backed senior secured first-lien revolving credit facility due 2029.

The ratings on the outstanding backed term loans and backed senior revolver due 2026 will be withdrawn at the close of the transactions. The agency said it revised the outlook to stable from positive.

“The ratings upgrade reflects significant deleveraging in recent quarters and Moody's expectation that momentum will continue based on the company's current pipeline. Moody's expects debt to EBITDA, which was 4.5x at Sept. 30, 2023, to end 2023 at approximately 4x and trend into the mid-3x range over the next 12 to 18 months.

“Moody's expects that liquidity will remain very good, with continued strong free cash flow generation. Additionally, at the close of the proposed term loan and revolving credit facility transactions, there will be no material debt maturities until 2029,” the agency said in a press release.

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