Fitch assigns R1 RCM loan BBB-

Fitch Ratings said it assigned BBB-/RR1 ratings to R1 RCM Inc.'s planned incremental senior secured term loan B due 2029.

Fitch said it also affirmed R1 RCM's BBB- senior secured loan rating, its long-term issuer default rating at BB and revised the outlook to stable from positive.

R1 RCM will use the loan along with a partial draw on the revolver to fund the acquisition of Acclara. Under the terms of the acquisition agreement, R1 will acquire Acclara for $675 million in cash and warrants to purchase 12.2 million shares of R1 stock at a strike price of $10.52, including a three-year lock-up.

“Following the Acclara transaction, Fitch forecasts proforma gross leverage increases to 3.9x in FY23, which is above Fitch's negative sensitivity leverage threshold of 3.5x. However, leverage is expected to decline to 2.5x by FY25 through a combination of EBITDA growth, 5% scheduled amortization rate on the term loan A, partial realization of cost synergies from the Acclara acquisition and voluntary debt paydowns,” the agency said in a press release.

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