Moody's cuts Envision Healthcare

Moody's Investors Service said it downgraded Envision Healthcare Corp.’s corporate family rating to Caa3 from Caa2, the probability of default rating to Caa3-PD/LD from Caa2-PD and the ratings on the senior secured revolving credit facility and term loan to Caa3 from Caa1.

The B1 rating on the asset-based lending facility and Ca rating on the unsecured notes are unchanged. Moody's also appended an /LD designation to Envision's PDR to reflect a limited default resulting from its recently completed debt exchange. The /LD will be removed after three business days.

The rating action follows the April 29, transaction where its subsidiary, Amsurg, LLC, issued $1.3 billion of super senior debt and $1.3 billion of second-lien debt. Envision used the proceeds to buy a portion of its first-lien term loan B, incremental term loan and senior unsecured notes at below par.

“Moody's considered this transaction to be a distressed exchange, which is a default under the rating agency's definition,” the agency said in a press release.

The outlook remains stable.

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