Moody’s lifts Option Care Health

Moody’s Investors Service said it upgraded Option Care Health, Inc.’s corporate family rating to B2 from B3. Moody’s also upgraded its probability of default rating to B2-PD from B3-PD.

Moody’s affirmed the senior secured credit facility, as increased by the proposed fungible add-on, at B2 and the speculative grade rating remains SGL-1. Concurrently, Moody’s revised the outlook to stable from positive.

“The upgrade reflects Moody’s view that Option Care’s leverage and credit metrics have improved significantly since last year’s merger with BioScrip and will be sustained at more moderate levels. The company repaid a portion of debt from a stock offering in late 2020 and Moody’s estimates debt/EBITDA has improved to approximately 5.3x, Moody’s said in a press release.

Option Health Care is seeking a $250 million incremental first-lien term loan, which will be used to repay its second-lien notes. The repayment is expected to save about $11 million of annual interest.

The first-lien credit facility’s affirmation reflects the one-notch upgrade of its corporate family rating and the planned repayment in full of the company’s second-lien credit facilities. “The first-lien rating is the same as the corporate family rating as it represents the preponderance of debt in the company’s capital structure,” the agency said.

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