Moody’s might cut Envision Healthcare

Moody’s Investors Service said it placed the ratings for Envision Healthcare Corp. on review for downgrade, including the B1 corporate family rating, B1-PD probability of default rating and all debt instrument ratings.

The outlook, which was previously stable, is also on review.

The agency said the action follows the announcement that KKR will acquire Envision in an all-cash transaction valued at about $9.9 billion.

Moody's said it affirmed Envision's SGL-1 speculative grade liquidity rating due to the company's strong existing cash balance, ample revolver availability and good free cash flow. The agency said the SGL-1 rating does not reflect Envision's post-LBO liquidity.

Moody's said the review will focus on the go-forward capital structure and resulting leverage, coverage and cash flow generating capabilities.

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