Moody’s rates Forefront loans B2

Moody’s Investors Service said it assigned B2 ratings to the senior secured first-lien credit facilities, comprised of a $95 million revolving credit facility, $535 million first-lien term loan and $100 million delayed-draw first-lien term loan to be borrowed by Dermatology Intermediate Holdings III, Inc. (Forefront Dermatology).

The agency also assigned a B2 corporate family rating and a B2-PD probability of default rating. The outlook is stable.

“The B2 CFR reflects Moody's expectation that Forefront Dermatology will operate with moderately high financial leverage of roughly 6.4x pro forma Dec. 31, 2021. The rating also reflects the risk associated with the company's rapid expansion strategy as it grows, through a combination of new clinic openings and acquisitions. The rating is also constrained by the low barriers to entry in the dermatology space given the highly fragmented market,” the agency said in a press release.

Proceeds from the loans combined with $835 million of new equity and $100 million of rollover equity will be used to fund the Partners Group acquisition of Forefront Dermatology, pay related fees and expenses and for working capital and general corporate purposes.

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