S&P raises Zelis ratings

S&P said it raised its ratings for Zelis Holdings LP, its $200 million revolver due 2026 and its $2.05 billion first-lien term loan due 2026 to B+ from B. The agency kept the loans’ recovery ratings unchanged at 3 (50%-70%; rounded estimate: 50%).

“We expect total revenue to grow by 23%-24% in 2023 and debt to EBITDA and EBITDA interest coverage to be approximately 4.5x and 3.5x, respectively. These results would reflect performance at or above our expectation for 2023 and represent a meaningful reduction in leverage following the company's 2019 combination with RedCard, which we viewed as transformational.

“That deal, combined with Zelis' more recent but meaningfully smaller acquisitions through 2022, improved its market share across its reportable segments and diversified its business lines,” S&P said in a press release.

The outlook is stable.

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