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Moody's rates Renal Advantage loans Ba3
Moody's Investors Service said it assigned a B2 corporate family and probability of default rating to Renal Advantage Holdings, Inc., along with a Ba3 (LGD 2, 29%) rating to the company's proposed senior secured credit facilities, consisting of a $60 million revolving credit facility and a $245 million term loan.
The outlook is stable.
Moody's said it understands the proceeds will be used to refinance the company's existing term loan, fund the near term maturity of a portion of the payment-in-kind seller notes and pay a dividend of up to $80 million to shareholders.
The ratings reflect the considerable financial leverage of the company, which is expected to increase as a result of the proposed dividend and refinancing, Moody's said.
The ratings also reflect risks associated with the company's focus on the dialysis services marketplace and its high concentration of revenues from government-based programs, the agency said.
The ratings also consider the relatively stable business profile characterized by increasing incidences of end stage renal disease and the medical necessity of the service provided, Moody's added.
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