Moody’s lacerates HealthChannels

Moody's Investors Service said it downgraded HealthChannels Intermediate Holdco, LLC’s probability of default rating to D-PD from Caa1-PD.

Concurrently, Moody's cut the corporate family rating to Caa3 from Caa1, the senior secured first-lien term loan rating to Caa3 from Caa1 and changed the outlook to stable from negative.

“Moody's downgraded the PDR to D-PD as the rating agency considers recent term loan repurchases at a deep discount to par as a distressed exchange and therefore a default under Moody's definitions. Moody's will upgrade HealthChannels PDR to Caa3-PD in three business days,” the agency said in a press release.

On a year-to-date basis through Sept. 30, HealthChannels has bought back about $19 million of its senior secured term loan, the company is mandated to repay 1% or about $3.5 million annually.

Moody’s warned the potential for another default remains high.

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