Moody's rates Pediatric Associates, loans B2

Moody's Investors Service said it assigned first-time ratings to Pediatric Associates Holding Co., LLC, including a B2 corporate family rating, a B2-PD probability of default rating and B2 ratings to the planned first-lien senior secured credit facilities.

“The B2 CFR reflects the company's moderately high financial leverage, with Moody's-adjusted debt/EBITDA around 4.5 times pro forma for the proposed transaction. The rating is also constrained by the company's modest scale and significant concentration in two states, Florida and Texas. Further, Moody's believes Pediatric Associates will continue to actively expand through acquisitions that Moody's expects will be funded with a mix of excess cash and additional financial debt. As a result, Moody's expects adjusted debt/EBITDA will remain in a range of 4-5x over the next 12-18 months,” the agency said in a press release.

Pediatric Associates plans to raise a $100 million senior secured first-lien revolver and a $600 million senior secured first-lien term loan. The proceeds will be used to refinance Pediatric Associates' indebtedness and pay related fees and expenses.

The outlook is stable.

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