Research Update: Buccaneer Intermediate Holdco Ltd. 'B-' Rating Affirmed; Outlook Stable; Debt Rated

Buccaneer Intermediate Holdco Ltd. (Signant Health) is refinancing its debt with a new $80 million revolving credit facility (undrawn at close), $850 million first-lien term loan, and $130 million delayed-draw term loan (expected to be drawn in the near term to fund an acquisition). We expect leverage above 9x for the next two years, burdened by restructuring costs, and that the company will remain acquisitive, which will keep leverage elevated. We also expect a cash flow deficit in fiscal 2024 (ending March 31), followed by about $15 million of cash flow in fiscal 2025. We affirmed our 'B-' issuer credit rating on Signant. The outlook is stable. We also assigned a 'B-' issue-level rating and '3' recovery rating to the

...- Buccaneer Intermediate Holdco Ltd. (Signant Health) is refinancing its debt with a new $80 million revolving credit facility (undrawn at close), $850 million first-lien term loan, and $130 million delayed-draw term loan (expected to be drawn in the near term to fund an acquisition). - We expect leverage above 9x for the next two years, burdened by restructuring costs, and that the company will remain acquisitive, which will keep leverage elevated. We also expect a cash flow deficit in fiscal 2024 (ending March 31), followed by about $15 million of cash flow in fiscal 2025. - We affirmed our 'B-' issuer credit rating on Signant. The outlook is stable. - We also assigned a 'B-' issue-level rating and '3' recovery rating to the company's proposed debt. The '3' recovery rating (50%-70%; rounded estimate: 50%) reflects our expectation for meaningful recovery in the event of default. - The stable outlook reflects our expectation for increased demand from the pharmaceutical industry and alleviated...

Research Update