S&P assigns APP Holdco, loans B-

S&P said it assigned preliminary B- ratings to APP Holdco LLC, the parent of American Physician Partners LLC, and its planned $60 million secured revolving credit facility and a $520 million secured term loan. The preliminary recovery rating on the loans is 3.

“APP's business risk profile reflects its limited scale, exposure to out-of-network contracts, and high customer concentration. These risks are somewhat offset by strong retention of both physicians and customer health systems. APP's business is focused on the highly fragmented and competitive emergency department physician staffing business, generating about 88% of revenues from emergency department physician staffing solutions, with the rest coming from hospital management services,” S&P said in a press release.

The company plans to use the new term loan to refinance its $472 million of debt.

The outlook is negative, reflecting the potential for a downgrade if the refinancing does not close as expected, which elevates the potential for a near-term default, the agency said.

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