Moody’s applies B1 to CHG facility

Moody's Investors Service said it affirmed CHG Healthcare Services Inc.'s B2 corporate family rating and B2-PD probability of default rating.

Additionally, the agency assigned a B1 rating to the proposed first-lien credit facility, which includes a $75 million revolver and a $990 million first lien term loan.

The outlook is stable.

Proceeds from the term loan, a $300 million second-lien note (unrated) and some cash will be used to pay a $525 million dividend to shareholders and refinance existing debt. Moody's expects that the ratings on the existing debt will be withdrawn upon repayment.

"The B2 corporate family rating reflects the company's highly aggressive financial policies, as demonstrated by three large dividends in under four years," Moody's analyst Todd Robinson said in a news release.

"Pro forma for the proposed dividend recap transaction, debt to EBITDA is high for the rating category at 6.5 times, but Moody's expects rapid deleveraging through strong earnings growth and some debt repayment."

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