Research Update: France-Based Nursing Homes Operator Colisee Group Downgraded To 'B-' From 'B' On Increased Debt; Outlook Stable

France-based nursing homes operator Colisee Group accelerated its external growth strategy in first-quarter 2021, with nine acquisitions in France and Spain funded entirely by drawings under its revolving credit facility (RCF); its other debt (including mainly real estate debt) also increased to around €110 million as of end-March 2021 from €25 million in September 2020. The company is now proposing a €150 million add-on to its existing €875 million term loan to pay down its RCF. Although Colisee's operating performance was trending toward our base-case scenario, supported by gradual recovery of occupancy rates especially since March 2021, the recent increase in leverage reduces prospects for the S&P Global Ratings-adjusted debt-to-EBITDA ratio to fall below the 7x target by 2022. We

...- France-based nursing homes operator Colisee Group accelerated its external growth strategy in first-quarter 2021, with nine acquisitions in France and Spain funded entirely by drawings under its revolving credit facility (RCF); its other debt (including mainly real estate debt) also increased to around 110 million as of end-March 2021 from 25 million in September 2020. - The company is now proposing a 150 million add-on to its existing 875 million term loan to pay down its RCF. - Although Colisee's operating performance was trending toward our base-case scenario, supported by gradual recovery of occupancy rates especially since March 2021, the recent increase in leverage reduces prospects for the S&P Global Ratings-adjusted debt-to-EBITDA ratio to fall below the 7x target by 2022. - We therefore lowered our long-term issuer credit rating and issue rating on the company's 1.025 billion term loan B (including the proposed 150 million add-on) to 'B-' from 'B'. - The stable outlook reflects...

Research Update