S&P downgrades Team Health

S&P said it lowered the corporate credit rating on Team Health Holdings Inc. to B+ from BB- and placed the rating on CreditWatch with negative implications.

The agency also said it lowered the rating on Team Health's senior secured debt to B+ from BB- to reflect the lower corporate credit rating.

The recovery rating on this debt is 4, indicating 30% to 50% expected default recovery.

S&P also said it lowered the rating on the company's unsecured debt to B- from B.

The recovery rating on this debt is 6, indicating 0 to 10% expected default recovery.

The downgrades follow news that the company is being acquired by financial sponsor Blackstone for $6.1 billion, the agency explained.

Based on regulatory filings, S&P said it believes that pro forma leverage will be more than 7x. This is a sharp departure from the prior expectation that the company was committed to de-leveraging, the agency noted, and that leverage would decline to less than 5x over the next few quarters.

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