Moody's downgrades HealthChannels

Moody's Investors Service said it downgraded HealthChannels Intermediate Holdco, LLC’s ratings, including the corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD and senior secured revolving credit facility and senior secured term loan rating to Caa1 from B3. Moody's revised the outlook to negative from stable.

“The ratings downgrade reflects lingering structural headwinds that have negatively impacted the business since the beginning of the coronavirus pandemic. HealthChannels' revenues have declined by approximately 35% since 2019 to about $250 million and Moody's expects revenues will continue to remain at or near these levels over the next 12 to 18 months. In addition, Moody's expects that Health Channels EBITDA will remain pressured such that gross debt to EBITDA will remain above seven times in the next 12 to 18 months,” the agency said in a press release.

Moody’s warned the HealthChannels’ capital structure may become increasingly unsustainable, resulting in a higher risk of a distressed exchange or default and curtailing the company’s ability to refinance.

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