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Moody’s ups Ciox, assigns facility B3
Moody’s Investors Service said it upgraded the ratings for CT Technologies Intermediate Holdings, Inc. (Ciox Health), including the corporate family rating to B3 from Caa2 and the probability of default rating to B3-PD from Caa2-PD. Simultaneously, Moody’s assigned a B3 rating to the company’s proposed senior secured first-lien credit facilities, consisting of a $50 million revolver due 2025, and a $670 million term loan due 2025. The agency also changed the outlook to positive from stable.
“The upgrade of Ciox Health’s CFR to B3 reflects significant improvement in operating performance over the last two years, lower debt leverage, and greater free cash flow. Importantly, this transaction addresses refinancing risk, which had weighed heavily on the rating,” said Moody’s lead analyst Vladimir Ronin in a press release.
Proceeds along with cash on hand will fund the refinancing of the current capital structure and pay related transaction fees and expenses.
The change in outlook reflects Moody’s expectation that Ciox Health will benefit from high single-digit earnings growth and a further improvement in profitability, which will support its ability to reduce debt/EBITDA towards 5x, over the next 12-18 months, the agency said.
The Caa1 rating on Ciox’s first-lien senior secured facility will be withdrawn upon closing of the transaction and repayment, Moody’s said.
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