S&P rates Covenant Surgical loans B-, CCC

S&P said it affirmed its B- issuer credit rating on Covenant Surgical Partners Inc.

S&P assigned a B- issue-level rating to the proposed senior secured debt consisting of a new $35 million revolving credit facility and new $250 million first-lien term loan. The recovery rating is 3, indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default.

S&P also assigned a CCC issue-level rating to the proposed $100 million second-lien term loan. The recovery rating is 6, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default.

The outlook is stable.

“Our rating affirmation reflects our view that Covenant revenue will grow at a faster pace than the industry average as acquisitions supplement organic growth,” S&P said in a news release.

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