Moody's rates Team Health loan Ba3

Moody's Investors Service said it assigned a Ba3 (LGD3, 47%) rating to Team Health, Inc.'s proposed $575 million senior secured credit facility, consisting of a $165 million revolver expiring 2016, a $110 million term loan A due 2016 and a $300 million term loan B due 2018.

Moody's also affirmed the Ba3 corporate family and probability of default ratings of Team Finance LLC. Team Health and Team Finance are subsidiaries of Team Health Holdings, Inc. Moody's also changed the outlook to positive from stable and affirmed the company's speculative-grade liquidity rating at SGL-1.

The proceeds of the new credit facility will be used to refinance the existing debt of Team Finance.

Team Health's ratings reflect the expectation that the company will continue to operate with a modest level of leverage and strong interest expense coverage as well as the benefit of the company's strong competitive position in a highly fragmented industry and stable cash flow generation, the agency said.

However, risks around reimbursement and exposure to uninsured individuals could pressure revenue and earnings growth in the near to medium term, the agency added.

The positive outlook reflects the expectation that credit metrics will continue to improve through earnings growth from existing business as well as acquisitions, Moody's said.

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