Moody’s revises Covenant Physician view to negative

Moody’s Investors Service said it changed the outlook to negative from under review and confirmed Covenant Physician Partners Inc.’ ratings.

Moody’s confirmed Covenant’s B3 corporate family rating, B3-PD probability of default rating, B2 senior secured first-lien bank credit facility, and Caa2 senior secured second-lien bank credit facility.

This rating action concludes the review of Covenant’s ratings started on March 24.

“The change of outlook to negative reflects Moody’s expectation that the company’s leverage – which was already high before the pandemic – will remain elevated above 8x given reduced elective procedures due to the coronavirus. Moody’s expects that there will be a significant erosion of operating performance in the second and third quarters that will cause leverage to rise and liquidity to weaken,” said the agency in a press release.

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