Moody's ups American Medical loan

Moody's Investors Service said it affirmed the Ba3 corporate family and probability of default ratings of American Medical Systems Holdings, Inc.

The agency also said it upgraded the first-lien senior secured revolver and term loan to Baa3 due to changes in the capital structure, as the company has repaid a significant portion of its senior secured term loan.

The rating on its $65 million senior secured revolver due 2012 to Baa3 (LGD 1, 7%) from Ba1 (LGD 2, 18%), $59 million (originally $365 million) senior secured term loan B due 2012 to Baa3 (LGD 1, 7%) from Ba1 (LGD 2, 18%) and $62 million (outstanding as of July 3) convertible senior subordinated notes due 2036 to B1 (LGD 4, 63%) from B1 (LGD 5, 74%).

The rating on the 3¼% convertible senior subordinated notes remains at B1 and the speculative grade liquidity rating remains SGL-1, reflecting an expectation for strong liquidity over the near-term.

The outlook is stable.

The ratings are supported by the company's moderate leverage and strong interest coverage and cash flow-to-debt metrics, Moody's said.

The ratings also are supported by the company's leading positions in most of its niche markets and its track record of innovation in men's and women's pelvic health, the agency said.

The ratings are constrained by the company's limited size, both on an absolute basis and relative to its competitors, Moody's added.

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