Moody's slashes Cano, rates loan Caa2

Moody's Investors Service said it downgraded the ratings of Cano Health, LLC including the first-lien senior secured credit facilities to Caa2 from Caa1, the ratings of the senior unsecured notes to Ca from Caa3, the corporate family rating to Caa3 to Caa1 and the probability of default rating to Caa3-PD from Caa1-PD. Moody's also assigned a Caa2 rating to Cano's new $150 million senior secured term loan. The speculative grade liquidity rating remains SGL-4.

“The ratings downgrade reflects Moody's view that Cano's capital structure is becoming increasingly unsustainable and the probability of a default, by way of a distressed exchange is high. Cano has experienced a significant erosion in operating performance and profitability in 2022 which Moody's expects will continue throughout 2023 and 2024.

“Despite the cash added to the balance sheet and repayment of the revolver using the new $150 million first lien term loan, Moody's forecasts Cano will continue to have negative free cash flow,” the agency said in a press release.

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