Research Update: Quincy Health LLC Assigned 'B-' Rating Following Subsidiary's Emergence From Chapter 11 Bankruptcy; Outlook Stable

On July 7, 2020, Quorum Health Corp. emerged from Chapter 11 bankruptcy and reorganized to become a wholly owned subsidiary of Quincy Health LLC, a newly formed limited liability company. The new capital structure consists of a four-year asset based loan (ABL) of up to $162.5 million and a five-year $732.2 million term loan. S&P Global Ratings expects adjusted debt-to-EBITDA leverage of 5.3x in 2021 and 5.1x in 2022. We are assigning a 'B-' issuer credit rating to Quincy Health. At the same time, we are assigning our 'B-' issue-level and '3' recovery ratings to the company's senior secured debt, indicating our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a default. Our stable outlook reflects

...- On July 7, 2020, Quorum Health Corp. emerged from Chapter 11 bankruptcy and reorganized to become a wholly owned subsidiary of Quincy Health LLC, a newly formed limited liability company. - The new capital structure consists of a four-year asset based loan (ABL) of up to $162.5 million and a five-year $732.2 million term loan. - S&P Global Ratings expects adjusted debt-to-EBITDA leverage of 5.3x in 2021 and 5.1x in 2022. - We are assigning a 'B-' issuer credit rating to Quincy Health. At the same time, we are assigning our 'B-' issue-level and '3' recovery ratings to the company's senior secured debt, indicating our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a default. - Our stable outlook reflects our belief that the company's new capital structure is manageable and its liquidity position will be adequate over the next 12 months. The outlook also incorporates our expectation that Quincy will steadily improve revenues and cash flow generation...

Research Update