S&P trims AMT TopCo

S&P said it lowered its ratings on AMT TopCo LLC and its debt to CCC from CCC+.

“AMT's post-acute business is experiencing significant challenges that are pressuring earnings and liquidity. We expect revenue from AMT's post-acute business will decline by over 30% year over year in the second half of 2023, stemming from loss of market share, closure of customer facilities, and employee turnover. AMT has lost over 1,000 facility relationships in 2023, far outpacing its new customers,” S&P said in a statement.

The agency noted AMT’s $40 million revolver is fully drawn. “We believe the company will need to reduce its balance to below $14 million by the end of the quarter to avoid triggering and violating its springing 4.75x maximum secured net leverage covenant. We believe the company likely needs a cash infusion from its sponsors or an amendment to its credit agreements to avoid a covenant breach within the next 12 months.”

The outlook is negative.

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