Moody's assigns ScionHealth, loan B2

Moody's Investors Service said it assigned B2 corporate family and B2-PD probability of default ratings to Knight Health Holdings LLC (ScionHealth). The agency also gave a B2 rating to the planned $450 million senior secured term loan B. The outlook is stable.

ScionHealth will acquire Kindred Healthcare LLC's long term acute care business and 16 short-term acute care markets from LifePoint Health Inc.

The company will use a $450 million asset-based lending facility, with about $100 million drawn at close, a $450 million term loan B, $360 million of cash equity, including $350 million of class B equity, contributed by LifePoint, and $10 million of class A equity from Apollo and management. Management expects the deal to close by the end of 2021.

“The B2 corporate family rating reflects ScionHealth's moderate financial leverage, ongoing reimbursement pressures and low organic growth outlook for the overall business. Moody's calculates pro forma leverage to be approximately 4.5x for FYE 2021, which Moody's forecasts to gradually decline to 4.4x FYE 2022,” the agency said in a press release.

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