Moody’s downgrades Team Health

Moody’s Investors Service said it downgraded Team Health Holdings, Inc.’s corporate family rating to Caa2 from B3 and its probability of default rating to Caa2-PD from B3-PD. Moody’s also downgraded Team Health’s senior secured term loan and revolving credit facility’s ratings to Caa1 from B2 and unsecured notes’ rating to Ca from Caa2.

“The downgrade of Team Health’s ratings reflects an expectation of a severe decline in revenue and cash flow in the coming weeks due to reduction in emergency room services demand and postponement of elective procedures amid the continuing Covid-19 outbreak,” said the agency in a press release.

Also, Team Health’s high leverage (debt/EBITDA of above 8 times as of Dec. 31), and its profitability is likely to remain under pressure due to its dispute with UnitedHealth Group, Moody’s said.

The outlook remains negative.

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