Moody's stabilizes Covenant Physician view

Moody's Investors Service said it changed the outlook to stable from negative and affirmed Covenant Physician Partners' corporate family rating at B3, probability of default rating at B3-PD, senior secured first-lien bank credit facility at B2 and senior secured second-lien bank credit facility at Caa2.

“The revised outlook to stable reflects Moody's expectation that the acquisition of Marietta will increase scale and support operating performance despite prolonging deleveraging. Moody's believes that the business has stabilized as Covenant volumes seem to be approaching 100% of pre-covid levels excluding focus locations,” the agency said in a press release.

Moody's said it forecasts a gradual improvement in credit metrics over the next two years and expects Covenant to de-lever below 8x by the end of 2022.

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