Ontario, Calif.-based Prime Healthcare Services plans to issue $700 million of senior unsecured notes and intends to use the proceeds of the bond offering for various items, including to refinance an existing team loan and fund a number of previously announced acquisitions.
Moody's Investors Service has assigned a "B3" rating to Prime's proposed offering. The rating agency also assigned a "B2" Corporate Family Rating and a "B2-PD" Probability of Default Rating to Prime.
The "B2" Corporate Family Rating was based on a number of factors, including Moody's expectation that Prime will operate with considerable financial leverage and that improvement in credit metrics over the near term will rely on Prime's ability to improve operating results at newly acquired hospitals.
"The ratings reflect the still significant concentration of operations in California and considerable reliance on only a few facilities for the majority of the company earnings," said Moody's.
Prime currently has a stable outlook.
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