S&P: U.S. Renal unaffected

Standard & Poor’s said its B corporate credit rating on U.S. Renal Care Inc. is unchanged by the proposed $75 million add-on to its first-lien term loan.

The company will use proceeds of the add-on coupled with some balance sheet cash to fund two acquisitions.

The B rating on the first-lien senior debt and CCC+ rating on the second-lien secured debt are unchanged. The recovery rating on the first-lien debt remains 3, reflecting an expectation for meaningful (50%-70%) recovery in the event of a default, and the recovery rating on the second-lien debt remains 6, reflecting an expectation for negligible (0%-10%) recovery in the event of a default.

S&P said the ratings on U.S. Renal Care reflect S&P’s view of the company’s narrow business focus and reimbursement risk. The ratings also reflect the company’s financial risk profile with leverage (adjusted debt to EBITDAR less net income attributable to non-controlling interests) expected to remain above 6x over the next year.

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