S&P lifts Signify Health

S&P said it raised its ratings for Signify Health Inc., its revolver and first-lien term loan to B+ from B. The 3 recovery ratings on the loans indicating meaningful (50%-70%; rounded estimate: 50%) recovery in default is unchanged.

The company plans to wind down its episodes of care services (ECS) segment, which accounted for about 21% revenue in 2021, following the Centers for Medicare & Medicaid Services adverse reimbursement change.

“The upgrade to B+ reflects Signify's track record of maintaining debt leverage comfortably below 5x, since its IPO in February 2021. Our expectations for leverage to remain below 5x is reinforced by the company's substantial balance sheet cash (which we ignore in our measure of adjusted debt leverage, on the assumption it will likely be used for acquisitions) and our expectations for higher profitability in 2023 and beyond, following the company's exit from the unprofitable ECS segments,” S&P said in a press release.

The outlook is stable.

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