S&P gives MedData, loans B-

S&P said it gave B- ratings to FH MD Parent Inc. (MedData), which was carved out from Mednax Inc. in 2019 and bought by Frazier Healthcare Partners and Edgewater Funds, and its planned loans. The loans’ recovery ratings is 3. The recovery rating indicates an expectation of meaningful (50%-70%; rounded estimate: 55%) recovery in default.

The company plans to secure a $30 million revolver and a $230 million new senior secured term loan to refinance its term loan and acquire DECO Recovery Management LLC.

“We expect a highly leveraged financial risk profile, with debt to EBITDA of about 7.5x and 5.5x in 2021 and 2022, respectively, and FOCF of about 10% in 2022. Our assessment of the company's financial risk incorporates its financial-sponsor ownership and that it will more likely remain highly leveraged because we expect it will likely pursue debt-funded acquisitions. We expect cash flow to improve in 2021 from top line growth, lower nonrecurring expenses, and some cost synergies,” S&P said in a press release.

The outlook is stable.

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