Moody’s rates Select Medical debt B3

Moody's Investors Service said it affirmed the existing ratings of Select Medical Holdings Corp., including the B1 corporate family rating and B1-PD probability of default rating.

Moody's also affirmed the ratings of Select Medical Corp., including the Ba2 senior secured rating and B3 unsecured rating.

The agency also affirmed the Ba2 rating on Select's newly upsized term loan.

Moody's also assigned a B3 rating to Select's new unsecured debt.

The speculative grade liquidity rating of SGL-3 was unchanged.

The outlook is stable.

Proceeds from the incremental term loan B issuance and additional unsecured debt will be lent to Concentra via an intercompany note to repay the $1.24 billion Concentra term loan due 2022.

Select currently owns a 50.1% stake in Concentra and will acquire the remaining stake in the company over the next three years.

Moody's said it views the current transaction as leverage neutral at the consolidated Select/Concentra level.

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