Moody’s rates Mehilainen loans B2, Caa2

Moody’s Investors Service said it assigned a first time B3 corporate family rating and a B3-PD probability of default rating to Terveys-ja hoivapalvelut Suomi Yhtyma Oy (Mehilainen).

The agency also assigned B2 ratings to the €760 million first-lien term loan and to the €125 million revolving credit facility, as well as a Caa2 rating to the €200 million second-lien term loan.

The outlook is stable.

Proceeds from the loans along with €981 million of equity will be used to finance the acquisition of Mehilainen Group by funds managed by CVC Capital Partners, LocalTapiola, Varma, Ilmarinen and management.

Moody’s said the corporate family rating is supported by the company’s leadership position in Finland's privately provided health care and social care market which exhibits favorable trends in terms of growth and no evidence of cost pressure due to shortage of medical staff.

Conversely, the corporate family rating is constrained by a high starting leverage, the company's concentration to Finland only and therefore exposure to its regulatory risks and risk of future debt-financed acquisitions.

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