S&P gives B- to ERC Finance loan

S&P said it assigned its B- issue-level rating and 3 recovery rating to ERC Finance LLC's new delayed-draw term loan. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default.

S&P said the B- issuer credit rating on ERC Topco Holdings LLC reflects the company’s market position as the largest pure-play eating disorder treatment chain in the United States, which is offset by its narrow operating focus in a specialized and highly fragmented market.

“The rating also reflects our expectation that ERC's adjusted leverage will remain high and it will incur free cash flow deficits for 2019 as it invests in expansion,” S&P said in a news release.

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