S&P rates Team loans B-, CCC

S&P said it assigned Team Services Group’s (RMS Holding Co., LLC) first-lien credit facilities a B- with a 3 recovery rating and a CCC rating and 6 recovery rating to its second-lien credit facility.

The agency also assigned the company a B- issuer rating. “The rating reflects Team’s high leverage – in excess of 6x in 2020 and 2021, mainly due to continued acquisitions. It also reflects the company’s minimal cash flow generation, small scale, and competitive, fragmented market, which has low barriers to entry and reimbursement risk,” S&P said in a press release.

The outlook is stable. “The stable outlook reflects our expectation that Team’s double-digit percentage revenue growth will continue through a combination of organic and acquisition-related growth as well as improving EBITDA margins. At the same time, we expect the company’s aggressive debt-financed growth strategy will cause it to sustain leverage above 6x through 2021,” S&P said.

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