Research Update: SVP Holdings LLC's $150 Million Incremental Debt Add-On Affirmed At 'B-'; Outlook Stable

Birmingham, Ala.-based veterinary practice management company SVP Holdings LLC (d.b.a Southern Veterinary Partners) is issuing a new fungible $150 million incremental first-lien term loan, using the proceeds to fund the company's ongoing expansion strategy. We forecast an extension of the company's currently successful expansion program, with increasing scale and operational efficiencies supporting steady EBITDA margins and S&P Global Ratings-adjusted leverage around the low-10x range for the rest of 2023 and falling into the 9x range in 2024. We affirmed our 'B-' issuer credit rating on SVP Holdings and our 'B-' issue-level rating on its first-lien debt (including the proposed incremental add-on) with a recovery rating of '3' and a rounded recovery estimate of 55% (lowered from our previous estimate of

...- Birmingham, Ala.-based veterinary practice management company SVP Holdings LLC (d.b.a Southern Veterinary Partners) is issuing a new fungible $150 million incremental first-lien term loan, using the proceeds to fund the company's ongoing expansion strategy. - We forecast an extension of the company's currently successful expansion program, with increasing scale and operational efficiencies supporting steady EBITDA margins and S&P Global Ratings-adjusted leverage around the low-10x range for the rest of 2023 and falling into the 9x range in 2024. - We affirmed our 'B-' issuer credit rating on SVP Holdings and our 'B-' issue-level rating on its first-lien debt (including the proposed incremental add-on) with a recovery rating of '3' and a rounded recovery estimate of 55% (lowered from our previous estimate of 60%). We also affirm the issue-level ratings on the company's second-lien debt of '###' and recovery rating of '6' (rounded estimate of 0% remains unchanged). - The stable outlook...

Research Update