Research Update: MED ParentCo L.P. Proposed First-Lien Debt Rated 'B-'; Ratings Affirmed On Refinanced Capital Structure; Outlook Stable

MED ParentCo L.P. plans to issue a new $1.4 billion first-lien term loan maturing in April 2031 and $425 million of payment in kind (PIK) preferred equity to refinance its existing first- and second-lien term loans. The company will also upsize its revolver to $150 million and extend the maturity to April 2029. We have affirmed our 'B-' issuer credit rating with a stable outlook. At the same time, we assigned our 'B-' issue-level rating and '3' recovery rating to the proposed first-lien debt. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. The stable outlook on MED reflects our view that its credit metrics and operating margins

...- MED ParentCo L.P. plans to issue a new $1.4 billion first-lien term loan maturing in April 2031 and $425 million of payment in kind (PIK) preferred equity to refinance its existing first- and second-lien term loans. - The company will also upsize its revolver to $150 million and extend the maturity to April 2029. - We have affirmed our 'B-' issuer credit rating with a stable outlook. - At the same time, we assigned our 'B-' issue-level rating and '3' recovery rating to the proposed first-lien debt. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. - The stable outlook on MED reflects our view that its credit metrics and operating margins will continue to improve over the next 12 months due to integration of past acquisitions and improved EBITDA generation....

Research Update