Moody's rates Universal Health loans Ba2

Moody's Investors Service said it assigned Ba2 corporate family and probability of default ratings to Universal Health Services, Inc., along with a Ba2 (LGD3, 43%) rating to its proposed senior secured credit facility, consisting of an $800 million revolver, $1 billion term loan A and a $1.55 billion term loan B.

The company's senior notes, rated Baa3, remain on review for possible downgrade.

The outlook is stable.

Psychiatric Solutions, Inc.'s senior secured revolving credit facility rating of Ba2 (LGD2, 25%), senior secured term loan due 2012 of Ba2 (LGD2, 25%) and senior subordinated notes due 2015 of B3 (LGD5, 81%) are likely to be withdrawn.

The new ratings reflect the significant increase in leverage incurred to complete the $3.1 billion acquisition of Psychiatric Solutions, Moody's said.

The ratings also consider the combined company's standing following the transaction as the largest provider of inpatient behavioral health services in a relatively fragmented market, the agency said.

The agency said it expects the company can effectively integrate the operations of the Psychiatric Solutions facilities without significant disruption and realize synergies associated with the elimination of redundant functions.

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