Moody’s ups Ardent loan, rates loan B3

Moody's Investors Service said it affirmed Ardent Legacy Acquisitions, Inc.'s corporate family rating of B2 and the probability of default rating of B2-PD.

At the same time, the agency upgraded the existing senior secured term loan rating to Ba3 from B1 and assigned a B3 rating to the company's proposed $300 million senior unsecured term loan.

The outlook was changed to negative from stable.

Proceeds from the new debt facility will be used, along with an equity contribution from the company's owners, to facilitate the acquisition of East Texas Medical Center Regional Healthcare System (ETMC; B3 negative) via a joint venture structure with the University of Texas System, Texas (Aaa stable). Ardent will be the majority JV owner after the close of the transaction.

“The upgrade on the existing senior secured term loan rating to Ba3 reflects the benefit of loss absorption in a hypothetical distressed scenario provided by the new unsecured debt that is being added to the capital structure,” Moody’s said in a news release.

“Further, the secured term loan will benefit from a substantial increase in the collateral package through the pledge of the ETMC hospitals as well as Ardent's Lovelace system in New Mexico, which is in the process of being pledged.”

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