S&P rates Virence loans B

S&P said it affirmed the B issuer credit rating on Virence Intermediate Holdings LLC.

The agency also said it assigned a B rating to the company's proposed first-lien credit facility, which includes a $400 million revolver and $3.66 billion term loan.

The recovery rating is 3, indicating 65% expected default recovery.

Private equity firms Veritas Capital and Evergreen Coast Capital are acquiring athenahealth Inc. and merging it with Virence Intermediate, which was formerly known as VVC-WFM Intermediate Holdings LLC, in a transaction totaling $6.8 billion.

Adjusted leverage increases significantly to 10x for the full year in 2019, up from previous expectations of 7.5x, S&P said.

The deterioration in credit metrics is offset by business improvements that come from greater scale, good market reputation and brand recognition from the athenahealth name, which the combined company will operate under, the agency explained.

The stable outlook reflects an expectation that the integration will be successful and the company will grow revenue at a high single-digit rate, maintain margins and generate significant free cash flow, S&P said.

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