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Moody's: Rural/Metro outlook positive
Moody's Investors Service said it assigned Rural/Metro Operating Co., LLC, a wholly owned subsidiary of Rural/Metro Corp., a provisional Ba3 (LGD2, 24%) rating to the proposed $150 million term loan and $40 million revolver which will include a $25 million sub-limit for letters of credit.
The agency affirmed Rural/Metro's B2 corporate family rating and senior secured revolving credit facility and term loans at Ba2 (LGD1, 9%) and Rural/Metro Corp.'s 12¾% senior discount notes due 2016 at Caa1 (LGD5, 88%).
The positive outlook reflects reduced refinancing risk as a result of the proposed transaction and the expectation that leverage and interest coverage will show further improvements as Rural/Metro continues to reduce uncompensated care, increase average patient charge and make repayments on the term loan, according to the agency.
Moody's said it placed the B2 (LGD4, 50%) rating on the 9 7/8% senior subordinated notes under review for downgrade due to the proposed changes in the capital structure.
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