S&P gives B to Iasis Healthcare loan

S&P said it assigned its B rating to Iasis Healthcare LLC's proposed $867 million term loan B due 2021 (which includes a $100 million cash paydown to extending lenders that elect to participate in a pro rata share of paydown). The recovery rating is 3, indicating expectations for meaningful (50%-70%; rounded estimate: 65%) recovery to debtholders in the event of payment default.

The company is issuing the new debt to refinance existing secured debt, which carried the same rating. The new debt extends the maturity to be in line with the company's revolver.

Extending term loan B lenders have the option to elect to receive their pro rata share of a $100 million cash paydown.

S&P said its ratings on parent Iasis Healthcare Corp. and Iasis Healthcare LLC, including the B corporate credit rating, are not affected.

“Our B corporate credit rating and negative rating outlook on Iasis continues to reflect our expectation that the company is likely to materially improve profitability next year, which should allow it to refinance the senior notes before they become a current maturity in May 2018,” S&P said in a news release.

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