S&P gives Solis Mammography B-

S&P said it gave B- ratings to WDT Acquisition Corp. (Solis Mammography) and its senior secured debt. The debt’s recovery rating is 3, indicating meaningful (50%-70%; rounded estimate: 55%) recovery in default. The first-lien debt consists of a $25 million revolver due 2026, a $300 million term loan due 2028 and a $50 million delayed-draw term loan due 2028.

The agency also assigned CCC issue-level and 6 recovery ratings to its $100 million second-lien term loan due 2029, indicating negligible (0%-10%; rounded estimate: 0%) recovery in default.

“The company generates about $100 million in annual revenue, or about $225 million on a consolidated basis including its joint ventures' (JV) revenue, putting it on the smaller side relative to rated health care services peers. We also view geographic concentration as a risk because over 70% of its facilities are located in Texas (60%) and Washington D.C. (10%),” S&P said in a press release.

The new financing will be used to refinance Solis’ capital structure and buy back its preferred shares.

The outlook is stable, reflecting a forecast for steady sales and cash flow growth, along with improving margins and expansion of joint ventures, the agency said.

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