Moody’s gives Cano, facilities B3

Moody’s Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to Cano Health, LLC. Simultaneously, Moody’s assigned B3 ratings to the company’s senior secured first-lien credit facilities, comprised of a $30 million revolving credit facility, $480 million term loan, and $175 million delayed-draw term loan.

Proceeds will be used to repay debt, fund a $100 million shareholder distribution, pay related fees and expenses, working capital and general corporate purposes. The delayed-draw term loan will primarily be used to fund acquisitions or deferred acquisition consideration.

“The B3 CFR reflects Moody’s expectation that Cano will operate with high financial leverage and aggressive financial policies. Pro forma for the debt financing, debt to EBITDA is around seven times. While planned acquisitions will add scale, there is integration risk and execution risk given the acquisitions will be expanding Cano’s footprint into new geographies,” Moody’s said in a press release.

Moody’s assigned a positive outlook. The outlook reflects Moody’s view Cano will experience rapid growth and reduce its high geographic and customer concentration risk over the next 12-18 months, the agency said.

“Further, the positive rating outlook reflects Cano Health’s pending business combination with special purpose acquisition company (SPAC) Jaws Acquisition Corp., which the company expects will close in late Q1 2021/early Q2 2021. If completed in its currently contemplated form, this transaction would facilitate significant deleveraging and add a minimum of $300 million of cash to the balance sheet, that would be a credit positive,” Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.