Moody’s ups Cotoviti loans

Moody’s Investors Service said it upgraded Verscend Holding Corp.’s (Cotiviti) first-lien debt ratings to B2 from B3.

The debt includes a $300 million revolving facility and a term loan upsized to $3.69 billion from $3.14 billion.

Loan proceeds and an unrated $275 million second-lien term loan, $150 million of preferred equity and $128 million of Cotiviti balance sheet cash will be used to acquire, with backing from Cotiviti’s private equity owner Veritas Capital, certain assets from HMS.

This transaction introduces $275 million of second-lien debt, which adds instrument-ratings support to Cotiviti’s first-lien debt, and Cotiviti’s stronger overall credit profile compel the upgrade of the first-lien debt to B2, following the agency’s loss given default framework, Moody’s said.

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