TEXT-S&P: CHG Healthcare Services ratings are unchanged
Nov 13 - Standard & Poor's Ratings Services said today that its issue-level and recovery ratings on Salt Lake City-based health care staffing provider CHG Healthcare Services Inc. are unchanged after $25 million was shifted from the second-lien to the first-lien term loan. The first-lien term loan, now $475 million, and $100 million revolver are rated 'B', with a recovery rating of '3', indicating our expectation for meaningful (50% to 70%) recovery in the event of principal default. The $190 million second-lien term loan is rated 'CCC+', with a recovery rating of '6', indicating our expectation for negligible (0 to 10%) recovery in the event of principal default. We rate CHG Healthcare Services Inc.'s corporate credit 'B'; the rating outlook is stable. Our ratings on CHG Healthcare reflect its "weak" business risk profile, highlighted by its operating concentration in the highly competitive health care staffing industry. This is partly offset by the company's revenue growth of its locum tenens business, which provides some stability against the variability of demand and supply from its allied health and travel nurse segment. The ratings also reflects CHG's "highly leveraged" financial risk profile, which takes into account our expectation of pro forma adjusted debt leverage well over 7x following the leverage buyout by its sponsors LGP and Ares. RELATED CRITERIA AND RESEARCH -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012 -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008 RATINGS LIST CHG Healthcare Services Inc. Corporate credit rating B/Stable/-- $475 mil. first-lien term loan B Recovery rating 3 $100 mil. Revolver B Recovery rating 3 $190 mil. second-lien term loan CCC+ Recovery rating 6 Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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