Moody’s rates R1 RCM, loans Ba2

Moody's Investors Service said it assigned ratings to R1 RCM Inc., including a Ba2 corporate family rating and Ba2 instrument ratings to the company's senior secured first-lien credit facilities.

The facilities consist of a $600 million revolver due 2026 being upsized from $450 million, a $700 million ($691 million outstanding) term loan A due 2026, a $500 million term loan A due 2027 and a $540 million term loan B due 2029.

Moody's also assigned an SGL-1 speculative grade liquidity rating, reflecting the company's very good liquidity profile.

“The B3 CFR assigned to R1 reflects the company's quickly growing, nearly $2 billion revenue scale, a more diversified ownership structure as a result of the Cloudmed purchase, and high initial, Moody's adjusted debt-to-EBITDA leverage of 4.9 times, pro-forma as of year-end 2021. Moody's expects opening leverage will moderate briskly, to about 3.6 times by the end of this year, more in keeping with many other services industry issuers also rated at the Ba2 CFR category,” the agency said in a press release.

New-term-loan proceeds plus $3.23 billion of R1 common equity are slated to be used to help fund the acquisition of Cloudmed, including the repayment of all of Cloudmed's $857 million of net debt, to meet transaction fees and to allocate cash to R1's balance sheet. Moody’s expects the deal to close in the second quarter.

The outlook is stable.

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