Moody’s rates Capella loan Ba2

Moody's Investors Service said it assigned a Ba2 rating to Capella Healthcare, Inc.'s proposed $100 million senior secured term loan.

Concurrently, the agency affirmed Capella’s B2 corporate family rating, B2-PD probability of default rating and the B3 rating on its $500 million 9¼% senior unsecured notes.

The outlook is stable.

Proceeds from the proposed term loan will be used to fund the proposed acquisition of Carolina Pines Regional Medical Center and its related outpatient services for $75 million from Community Health Systems, Inc., repay $21 million of borrowings on the company's asset-based revolving credit facility and pay related fees and expenses.

The company's ABL revolver was drawn in July 2014 to purchase the company's Muskogee Community Hospital capital lease.

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