S&P rates ASP Napa, loans B

S&P said it assigned B ratings to ASP NAPA Intermediate Holdings LLC and its planned $80 million senior secured revolving facility and $610 million first-lien term loan. The recovery rating is 3 (50%-70%, rounded estimate: 55%).

Concurrently, the agency withdrew the CCC+ issuer credit rating on ASP NAPA Intermediate Holdings Inc.

“We project low-to-mid-single-digit organic revenue growth, with additional growth from acquisitions in 2023 and beyond, and EBITDA margin in the 8%-9% range. We believe growth will be driven by volume increases as well as commercial rate increases, supplemented by acquisitions. Most of its costs are variable in the form of clinician compensation. Legacy ASP NAPA completed most of the integration (80% costs already incurred in 2021) of American Anesthesiology since the acquisition in May 2020, with the remainder expected to be completed in 2022,” S&P said in a press release.

ASP NAPA is consolidating American Anesthesiology, previously acquired by ASP NAPA in May 2020 from Mednax Inc., into its anesthesia operations and plans to refinance $555 million in debt, which includes a $20 million revolving credit facility, $313 million first-lien term loan outstanding on legacy ASP NAPA, and $76 million asset-based loan outstanding on American Anesthesiology, pay $15 million in transaction fees and add cash onto the balance sheet.

The outlook is stable.

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