S&P cuts EyeCare, rates loan B-

S&P said it lowered its ratings for EyeCare Partners LLC and its first-lien debt to B- from B and assigned a B- rating to its incremental $225 million term loan. The agency also downgraded the issue-level rating on the second-lien facilities to CCC from CCC+. The recovery ratings on first- and second-lien debt are unchanged at 3 and 6, respectively.

“The downgrade reflects our expectation for increased operating costs and growth spending to result in discretionary cash flow deficits and high adjusted leverage of more than 10x over the next two years. During 2021, EyeCare Partners' EBITDA and free cash flow generation were significantly weaker than our previous expectations. Operating cash flow was negative, and leverage (adjusted debt to EBITDA) was above 10x,” S&P said in a press release.

EyeCare Partners plans to use the new loan to fund acquisitions and repay $110 million of its revolver borrowings.

The outlook is stable.

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