Moody’s rates Correct Care loans B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to CCS-CMGC Holdings, Inc. (Correct Care Solutions).

The agency also assigned a B2 rating to the company's proposed first-lien senior secured credit facilities, including a $500 million senior secured first-lien term loan and a $65 million senior secured first-lien revolver.

At the same time, Moody's assigned a Caa2 rating to the company's proposed $110 million secured second-lien term loan.

The outlook is stable.

HIG Capital entered into a definitive agreement to acquire Correct Care from its existing owners Audax Group, GTCR Private Equity and Frazier Healthcare Partners. Correct Care will be merged with Correctional Medical Group Cos. following the closing of the leveraged buyout of the company.

All of Correct Care’s outstanding debt will be repaid with these proceeds.

The agency said the corporate family rating broadly reflects an expectation that the company will operate with high financial leverage and modest interest coverage.

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