S&P rates Encompass notes B+

S&P assigned its B+ issue-level rating and 5 recovery rating to Encompass Health Corp.'s proposed $400 million of senior unsecured notes due 2031. The 5 recovery rating, the same rating on the company's existing senior unsecured debt, indicates expectations for modest (10%-30%; rounded estimate: 25%) recovery in the event of a payment default.

The company intends to use the proceeds, and $300 million of cash on hand, to refinance its 5¾% senior unsecured notes due 2024.

“We view this transaction as slightly credit positive because it will reduce Encompass' leverage and interest expense and improve its debt maturity profile,” S&P said in a press release.

All of S&P’s other ratings on the company, including the BB- issuer credit rating, remain unchanged, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.