S&P lifts U.S. Renal, rates notes, loans

S&P said it assigned CCC+ ratings to U.S. Renal Care Inc.’s new $100 million revolver, $1.49 billion first-lien term loan and $121 million first-lien notes, issued by USRC, the parent entity. The recovery ratings are 4 (30%-50%; rounded estimate: 30%).

The agency concurrently gave B+ issue-level rating to the new $50 million revolver and B- issue-level rating to the outstanding $300 million first-lien term loan, issued by unrestricted subsidiaries Dialysis Holdco LLC and USRC South Texas LP. The respective recovery ratings are 1+ (100%) and 2 (70%-90%; rounded estimate: 85%).

Finally, S&P said it raised USRC’s issuer rating to CCC+ from B.

“While the nearly $490 million debt reduction and now improving business conditions are improving margins and leverage, we still expect cash flow deficits for the next few years, suggesting the capital structure may still be unsustainable long term absent a stronger than expected operational turnaround. However, we believe USRC has sufficient liquidity to fund these deficits for more than one year,” S&P said in a press release.

The outlook is stable.

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