Fitch rates R1 RCM loan BBB-

Fitch Ratings said it rated R1 RCM Inc.’s planned $540 million term loan BBB-/RR1. The agency also assigned the company a BB issuer rating.

“Fitch expects R1 to benefit from underlying secular trends in U.S. health care spending. The Centers for Medicare and Medicaid Services (CMS) forecasts national health expenditure growth of 5.4% per annum through 2028 due to longstanding trends in medical procedure/drug cost and utilization growth,” Fitch said in a press release.

R1 plans to acquire Cloudmed in a deal valued at $4.1 billion, to be funded through an incremental $500 million first-lien term loan A, the $540 million first-lien term loan B, a $150 million upsize to the revolving credit facility with no additional draw, and the balance funded through equity.

“Fitch believes the acquisition bolsters the company's end-to-end revenue cycle management (RCM) solutions, adds critical capabilities to address growing needs for revenue maximization by health care providers, facilitates access to the large hospital system client segment and provides opportunities for cross selling across the combined client base,” the agency said.

The outlook is stable.

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