S&P puts Tivity on watch

S&P said it placed all its ratings for Tivity Health Inc., including its B+ senior secured debt rating, on CreditWatch with negative implications.

The placement follows the announcement Stone Point Capital agreed to buy Tivity. The deal is expected to close on or before July 1.

“The CreditWatch placement reflects the elevated likelihood that we will downgrade Tivity upon the close of the transaction given our belief that its credit measures could materially weaken under its financial-sponsor owner. In our view, private-equity owned companies typically adopt aggressive financial policies that favor their shareholders over their creditors. Tivity's future capital structure under its new owner is currently unknown,” S&P said in a press release.

The agency said it would likely lower Tivity’s ratings at least a notch. “We intend to resolve the CreditWatch after we receive the final details around the company's capital structure, business strategy, and financial policies under its new owner.”

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