Zelis Holdings L.P. (d/b/a Zelis)

The stable outlook reflects S&P Global Ratings' expectation that Zelis Holdings L.P.'s (d/b/a Zelis) differentiated end-to-end cost-containment and payment-solutions business model will continue to support positive operating performance over the next 12 months, with revenue growth between 15% and 20% due to increased cross-selling and a highly visible contracted revenue backlog and EBITDA margins between 39% and 41% (net margins of 45%-47%). We believe this will result in adjusted leverage of 5.0x-5.5x by year-end 2020 and EBITDA interest coverage above 2x over this time period. We would consider lowering the rating during the next 12 months if the company raises debt or its business deteriorates such that adjusted leverage is above 7x or EBITDA interest coverage falls below 2x. This

...Zelis Holdings L.P. (d/b/a Zelis) provides the industry with market-leading technology to price, pay, and explain health care claims. RedCard functions as an enablement company that bridges health care payer, provider, and consumer communications. The Zelis combination with RedCard supports the integration of health care management and payments to a customer base of 700 payers and 1.5 million providers nationwide. Capital-markets activity has weakened credit-quality measures. In conjunction with the merger with RedCard and refinance of Zelis' capital structure in September 2019, leverage was 7.0x. We expect the company to deleverage to between 5x-5.5x by year-end 2020 given our expectation for substantial EBITDA growth and required first-lien debt amortization....

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