Research Update: HealthChannels Intermediate HoldCo LLC Downgraded To 'CCC' From 'B-'; Outlook Revised To Negative

While U.S.-based HealthChannels Intermediate HoldCo LLC has increased bill and wage rates in 2022, the company continues to experience challenging operating conditions, resulting in projected minimal cash flow generation. We believe this may cause the company to have difficulty refinancing its term loan. The company recently repurchased a small amount of its $385 million ($357.6 million as of December 2022) senior secured first-lien term loan due April 2025 in two open market transactions. We expect the company to repurchase more debt below par, which we would likely consider distressed given operating trends, trading levels, and the cumulative value of the repurchases. As a result, we lowered our issuer credit rating on HealthChannels and our rating on the company's first-lien debt

...- While U.S.-based HealthChannels Intermediate HoldCo LLC has increased bill and wage rates in 2022, the company continues to experience challenging operating conditions, resulting in projected minimal cash flow generation. We believe this may cause the company to have difficulty refinancing its term loan. - The company recently repurchased a small amount of its $385 million ($357.6 million as of December 2022) senior secured first-lien term loan due April 2025 in two open market transactions. We expect the company to repurchase more debt below par, which we would likely consider distressed given operating trends, trading levels, and the cumulative value of the repurchases. - As a result, we lowered our issuer credit rating on HealthChannels and our rating on the company's first-lien debt to '###' from 'B-'; the first-lien recovery rating remains '3'. We also revised the outlook to negative from stable. - Our negative outlook reflects our view that expected revenue and EBITDA declines in...

Research Update