Moody’s cuts Compassus first-lien ratings

Moody’s Investors Service said it downgraded FC Compassus, LLC’s senior secured first-lien bank credit facilities to B2 from B1. Moody’s also affirmed the company’s B2 corporate family rating and B2-PD probability of default rating.

The actions follow the announcement that Compassus will secure a $150 million incremental first-lien term loan. Part of the proceeds, along with $47 million of cash, will be used to fully repay its $82 million of unrated subordinated notes due 2028.

Compassus will earmark the remaining proceeds to fund future acquisitions or shareholder distributions and pay the related call premium, fees and expenses.

“The downgrade of the senior secured first-lien credit facility ratings to B2 reflects the elimination of loss absorption previously provided by subordinated notes. The first-lien debt, which includes a revolving credit facility and the upsized term loan, will represent the preponderance of the company’s obligations following the proposed transaction,” Moody’s said in a press release.

The outlook is stable.

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