S&P boosts Red Ventures

S&P said it raised its ratings on Red Ventures HoldCo LP and its first-lien secured debt to BB- from B+.

Red Ventures combined its Healthline and HealthGrades businesses into a 50/50 joint venture with UnitedHealth Group Optum to form Red Ventures Optum Health. Red Ventures received gross proceeds of $2 billion and used $1.3 billion for debt repayment.

“After repaying $1.3 billion in debt using asset sale proceeds, Red Ventures' leverage will be below 3x for the first time since 2016, representing a substantial change in the company's leverage profile. Leverage was 5.8x at the end of 2021 due to debt-financed acquisitions, and acquisition spending has totaled $2.5 billion over the last three years, most of it debt funded,” S&P said in a press release.

The agency added, “We believe Red Ventures' leverage likely would spike in a recession but expect it will remain below our 4x leverage threshold associated with the BB- rating.”

The outlook is stable.

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