S&P rates AmSurg CCC, loans B, B-, CCC

S&P said it assigned AmSurg LLC a CCC issuer rating. The agency also gave B issue and 1+ recovery ratings to the company’s $300 million super senior revolver, B- and 1 recovery ratings to the $1.1 billion first-lien term loan, and CCC and 4 recovery ratings to the $1.35 billion second-lien term loan.

AmSurg is a subsidiary of Envision Healthcare Corp. and capped the issuer’s rating in line with its parent. “This reflects our view that a default at Envision could trigger a default at AmSurg and that AmSurg's funding somewhat depends on Envision's financial performance,” the agency said in a press release.

“We consider AmSurg's capital structure unsustainable, reflecting our forecast that it will generate adjusted debt to EBITDA of about 12x and near break-even discretionary cash flow over the next couple of years. Our forecast for adjusted credit measures at AmSurg incorporates high adjusted debt of about $2.7 billion and our expectation for low-single-digit percent revenue growth and relatively stable adjusted EBITDA margins,” S&P added.

The outlook is negative reflecting the possibility of a default or distressed exchange over the next 12 months, S&P said.

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