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S&P gives Dialysis loans B, CCC+
Standard & Poor's said it assigned its B corporate credit rating to Dialysis Newco.
The outlook is stable.
At the same time, the agency assigned its B credit rating to Dialysis Newco's $40 million revolving credit agreement and $360 million first-lien term loan B. The recovery rating on this debt is 3, indicating an expectation for meaningful (50% to 70%) recovery of principal in the event of payment default.
S&P assigned its CCC+ credit rating to Dialysis Newco's $160 million second-lien term loan. The recovery rating on this debt is 6, indicating an expectation for negligible (0%-10%) recovery of principal in the event of payment default.
"The ratings on Dialysis Newco reflect its 'weak' business risk profile and 'highly leveraged' financial risk profile. Key credit factors considered in our business risk assessment include its narrow business focus on dialysis services, heavy reliance on Medicare, minimal market share in an industry dominated by two companies, and facilities with characteristics that we view as somewhat less favorable relative to those of its peers," S&P credit analyst David Peknay said in a news release.
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