Moody’s rates Physician Partners B2

Moody’s Investors Service said it gave B2 ratings to Physician Partners LLC and its senior secured first-lien credit facilities, comprised of a $50 million revolving credit facility, and $600 million first-lien term loan. The agency also assigned a B2-PD probability of default rating.

“The B2 CFR reflects Moody's expectation that Physician Partners will operate with moderately high financial leverage of roughly 5x and significant concentration in Florida. That said, density in Florida offers members a strong network of physicians that allows Physician Partners to provide quality care to its members. The rating also considers Physician Partner's track record of solid organic growth, seasoned executive team and favorable industry dynamics,” the agency said in a press release.

However, Physician Partners has moderately high leverage with pro forma adjusted debt to EBITDA of around five times, and moderate scale. “The CFR is also constrained by the company's significant geographic concentration, given that a significant majority of its business is generated in Florida,” Moody’s said.

The proceeds, $500 million of new equity and $1.6 billion of rollover equity will be used to fund the Kinderhook Industries purchase of Physician Partners, pay related fees and expenses and for working capital and general corporate purposes.

The outlook is stable.

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