Moody's rates Renal loans Ba3

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings to Renal Advantage Holdings, Inc. and a Ba3 (LGD2, 27%) rating to the company's proposed credit facility, consisting of a $50 million revolving credit facility and a $350 million term loan.

The outlook is stable.

Proceeds of the facility, along with $206 million of unrated subordinated mezzanine debt and an equity contribution from KRG Capital Partners, LLC, Bain Capital Ventures, LLC and others, will be used to purchase the company from shareholders and refinance the company's debt.

Renal Advantage's B2 rating reflects the expectation that the company will operate with a considerable amount of financial leverage following the transaction, the agency said.

Renal Advantage will have the highest pro forma adjusted leverage of the rated peer group of dialysis providers, estimated at about 6.3 times at Sept. 30, 2010, including management's anticipated synergies, the agency noted.

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