Moody's could cut U.S. Renal loans

Moody's Investors Service said it placed the ratings of U.S. Renal Care, Inc. under review for downgrade, including the company's B2 corporate family rating and B2-PD probability of default rating.

The B1 rating on the company's $60 million senior secured revolver due 2017, B1 rating on its $305 million first-lien term loan due 2019 and Caa1 rating on the $120 million second-lien term loan due 2020 were all placed on review for downgrade.

The action follows the June 25 announcement that U.S. Renal signed a definitive agreement to acquire Ambulatory Services of America, Inc.

Moody's said the review for downgrade reflects U.S. Renal's leverage, which is high for the current rating at 6.1 times as of March 31, and which could potentially increase further with the acquisition of Ambulatory Services.

Moody's said it recognizes that Ambulatory Services will double U.S. Renal's dialysis patients and provide a modest level of geographic diversification, although at this time it is unclear how the acquisition will be funded or the finale makeup of the capital structure.

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