Research Update: Quincy Health LLC Downgraded To 'SD' On Credit Amendment; Term Loan Rating Lowered To 'D'

On Sept. 27, 2023, U.S.-based hospital and outpatient services provider Quincy Health LLC amended its $625 million term loan to allow for payment-in-kind (PIK) in place of cash for its scheduled October 2023 interest payment. The company's asset-based lending (ABL) facility (unrated) was not affected. Given Quincy's cash flow deficits and lack of liquidity, we view this transaction as done out of distress. Moreover, we believe the PIK amendment fee and PIK interest election fees are not sufficient compensation in this context and that lenders have therefore received less than originally promised. We view this transaction as tantamount to a default. As a result, S&P Global Ratings lowered its issuer credit rating on the company to 'SD' (selective default) from

...Downgraded; Outlook Action To From Quincy Health LLC Issuer Credit Rating ##/-- ###/Negative/-- Quorum Health Corp. Senior Secured D ### Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such...

Research Update