S&P rates PharMerica loans B, CCC+

S&P said it assigned its B corporate credit rating to PharMerica Corp. The outlook is stable.

At the same time, S&P assigned a B issue-level rating and 3 recovery rating to the company's first-lien credit facility. The 3 recovery rating indicates expectations for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a default.

In addition, S&P assigned a CCC+ issue-level rating and 6 recovery rating to the company's second-lien term loan. The 6 recovery rating indicates expectations for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a default.

“The rating on PharMerica reflects our expectation that the company will achieve meaningful synergies through a new purchasing agreement negotiated as part of this transaction, while managing industry headwinds of reimbursement pressure and declining utilization at post-acute facilities. We also expect that working capital, which has absorbed significant cash flows in the past two years, will be better managed going forward,” S&P said in a news release.

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