S&P assigns Medical Depot loans B, CCC+ ratings

S&P said it assigned its B corporate credit rating to Medical Depot Holdings Inc. The outlook is stable.

At the same time, S&P assigned a B issue-level rating and a 3 recovery rating to Medical Depot's first-lien secured debt. The 3 recovery rating indicates expectations for meaningful (50%-70%, at the higher half of the range) recovery in the event of a default. S&P assigned a CCC+ issue-level rating and a 6 recovery rating to Medical Depot's second-lien secured debt. The 6 recovery rating indicates expectations for negligible (0%-10%) in a default.

CD&R Reign Merger Sub Inc. is the borrower of the debt.

“Medical Depot is a global manufacturer of generally very low-tech medical equipment, including durable medical products that support patient care primarily in the home setting,” said S&P’s Elan Nat. “Our assessment of business risk as vulnerable reflects the company's limited scale, low margins, and the limited barriers to entry in this fragmented and commodity-like product market.”

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