Moody’s cuts ATI Holdings

Moody’s Investors Service said it downgraded ATI Holdings Acquisition, Inc.’s corporate family rating to Caa1 from B3, its probability of default rating to Caa1-PD from B3-PD and its senior secured bank credit facility ratings to B3 from B2.

“The downgrade of the CFR to Caa1 reflects expected weakening of liquidity over the coming quarters due to the coronavirus pandemic as well as the rising refinancing risk as ATI’s revolver expires in May 2021. The potential for prolonged credit market disruption for highly leveraged companies increases refinancing risk as well as the risk that the company could pursue a transaction that Moody’s deems to be a distressed exchange, and hence a default under Moody’s definition,” the agency said in a press release.

Moody’s changed the outlook to negative from stable. “The change of outlook reflects Moody’s view that physical therapy companies like ATI will experience a significant drop in volumes over the coming weeks due to declines in demand and appointments,” the agency said.

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