Moody's rates Virence loans B2

Moody's Investors Service said it affirmed VVC Holding Corp.'s B3 corporate family rating and B3-PD probability of default rating following news the company will acquire athenahealth, Inc.

Upon the completion of the transaction, VVC Holding and athenahealth will be co-borrowers for proposed credit facilities and guaranteed by parent company, Virence Intermediate Holdings LLC.

Moody's also said it assigned B2 ratings to the proposed $400 million senior secured revolving credit facility and $3.66 billion senior secured first lien term loan.

Virence also has a proposed $800 million senior secured second-lien term loan, which is unrated.

The outlook is stable.

The proceeds, along with balance sheet cash, new cash and preferred equity, will be used to fund the acquisition, Moody's said.

The ratings reflect the combined company's very high financial leverage with a debt-to-EBITDA ratio of about 10x, Moody's said.

The ratings are constrained by the significant risks associated with integrating the two companies and achieving sizable cost synergies, estimated at more than $150 million, the agency said.

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