S&P rates Cano Health, facility B

S&P said it gave B ratings to Cano Health (Intermediate Holdings LLC or Primary Care) and its senior secured credit facility. The recovery rating is 3.

Cano agreed to merge with Jaws Acquisition Corp. in a special purpose acquisition company transaction. “We are putting all of the ratings of Primary Care on CreditWatch with positive implications, pending the close of the SPAC transaction,” the agency said in a press release.

Subsidiary Cano Health LLC is syndicating a $685 million senior secured credit facility, consisting of a $30 million five-year revolver (undrawn at close), a $480 million seven-year first-lien term loan, and a $175 million seven-year first-lien delayed-draw term loan.

“At transaction close, we would likely upgrade Primary Care two notches based on its influx of cash from the business consolidation and a concurrent equity issuance, proceeds of which will be partially used to significantly reduce debt leverage and provide upwards of $535 million in cash for future acquisitions. We would also likely raise the senior secured credit rating on Cano Health's senior secured credit facility two notches,” S&P said in a press release.

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